LONDON, Nov. 10, 2015 /CNW/ - SDX Energy Inc. ("SDX") (TSX VENTURE: SDX) is pleased to provide an update on its activities at its South Disouq asset located onshore Nile Delta Egypt.
SDX has signed a contract with Geofisyka Torun for the acquisition of 300km2 of 3D seismic data. The seismic programme is expected to take approximately 8 months to acquire and reprocess. The data obtained with this programme will be used to identify and select a prime prospect in this concession with a view to drilling a high impact exploration well in December 2016.
The South Disouq concession, which SDX operates with 55% working interest was acquired in a 2013 EGAS bid round and lies 65 km north of Cairo within the prolific Abu Madi-Baltim trend which has produced a number of large discoveries, both onshore and offshore, in recent years with circa 6.4 TCF and 100 Mmboe of recoverable volume discovered to date. Preliminary interpretation to date by SDX and its partner IPR indicates a trendology of this belt into South Disouq.
The gross cost of the seismic acquisition programme is expected to be approximately $11m. The cost of the acquisition programme will be covered respectively by each partner according to working interest ($6m net to SDX), after which SDX will be fully carried on the exploration well.
Commenting on this update, Paul Welch, CEO, said:
"The commencement of this programme represents the start of a highly active and potentially transformational period of operational activity for SDX. Between now and the end of 2016, we have the opportunity to drill up to 3 high impact exploration wells across our balanced portfolio whilst also focussing on increasing production from our low cost producing assets onshore Egypt.
We are very excited about the potential of the South Disouq concession given the number of significant discoveries made along the trend and anticipate that this 3D seismic programme will prove that this prolific trend extends into our block, thereby significantly de-risking our exploration well currently planned for late 2016.
We are also pleased to be acquiring this survey against current industry backdrop as we were able to obtain this seismic programme at a reduced cost when compared with the figure originally budgeted."
SDX is an international exploration, production and development company, headquartered in London, England, UK, with a principal focus on Egypt. In Egypt, SDX has an interest in two production concessions: NW Gemsa and West Gharib both located in the Eastern desert. SDX's portfolio also consists of South Ramadan, a development asset in the Gulf of Suez; South Disouq, an exploration asset in the Nile Delta; and West Bakassi, an exploration block in Cameroon within the prolific Niger Delta Basin.
The determination of oil and natural gas reserves involves the preparation of estimates that have an inherent degree of associated uncertainty. Categories of proved, probable and possible reserves have been established to reflect the level of these uncertainties and to provide an indication of the probability of recovery. The estimation and classification of reserves requires the application of professional judgment combined with geological and engineering knowledge to assess whether or not specific reserves classification criteria have been satisfied. Knowledge of concepts including uncertainty and risk, probability and statistics, and deterministic and probabilistic estimation methods is required to properly use and apply reserves definitions.
The recovery and reserve estimates of oil reserves provided herein are estimates only. Actual reserves may be greater than or less than the estimates provided herein.
Terms related to reserves classifications referred to herein are based on definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and are in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.
"Proved reserves" are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
"Probable reserves" are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
The qualitative certainty levels referred to in the definitions above are applicable to "individual reserves entities", which refers to the lowest level at which reserves calculations are performed, and to "reported reserves", which refers to the highest level sum of individual entity estimates for which reserves estimates are presented. Reported reserves should target the following levels of certainty under a specific set of economic conditions:
- at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves. This category of reserves can also be denoted as 1P; and
- at least a 50 percent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus probable reserves. This category of reserves can also be denoted as 2P.
Additional clarification of certainty levels associated with reserves estimates and the effect of aggregation is provided in the COGE Handbook. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation.
Use of the term "boe" may be misleading, particularly if used in isolation. A "boe" conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Certain volumes provided in this news release represent a pro forma arithmetic sum of multiple estimates of proved plus probable reserves, which statistical principles indicate may be misleading as to volumes that may actually be recovered. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing probabilities of recovery associated with each class as explained in the annual oil and gas disclosure filings of SDX (available on www.sedar.com) and the effects of arithmetic aggregation. Factors that could affect the accuracy of the reported pro forma aggregated reserves estimates include company level differences in evaluation effective dates, reservoir characteristics and pricing assumptions.
Reserves information in this press release are based on the independent reserves evaluation of Ryder Scott Company Canada dated February 19, 2015 of the crude oil, natural gas liquids and natural gas reserves of Sea Dragon Energy Inc. as at December 31, 2014 and the independent reserves evaluation of Sproule Associates Ltd. dated December 31, 2014 evaluating Madison's crude oil, natural gas liquids and natural gas reserves between October 2014 and January 2015.
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact should be viewed as forward-looking statements. In particular, statements concerning the Parties, the Transaction, the anticipated synergies that will result from the Transaction and the key characteristics of the combined entity and should be viewed as forward-looking statements.
The forward-looking statements contained in this document are based on certain assumptions and although management considers these assumptions to be reasonable based on information currently available to them, undue reliance should not be placed on the forward-looking statements because SDX can give no assurances that they may prove to be correct. This includes, but is not limited to, assumptions related to, among other things: commodity prices and interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; future production rates; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services.
By their very nature, forward-looking statements are subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Such risks and other factors include, but are not limited to political, social and other risks inherent in daily operations for each of the Parties, risks associated with the industries in which the Parties operate in general, such as: operational risks; delays or changes in plans with respect to growth projects or capital expenditures; costs and expenses; health, safety and environmental risks; commodity price, interest rate and exchange rate fluctuations; environmental risks; competition; failure to realize the anticipated benefits of the Transaction and to successfully integrate the Parties; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws and environmental regulations. Readers are cautioned that the foregoing list of risk factors is not exhaustive and are advised to reference SDX's Annual Information Form for the year ended December 31, 2014 for a description of additional risks and uncertainties associated with SDX's business, including its exploration activities, which can be found on SDX's SEDAR profile at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and SDX does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
THIS PRESS RELEASE SHOULD NOT BE CONSIDERED A COMPREHENSIVE SUMMARY OF THE TRANSACTION. ADDITIONAL INFORMATION IS AVAILABLE ON SDX'S SEDAR PROFILE.
INVESTORS ARE CAUTIONED THAT, EXCEPT AS DISCLOSED IN DOCUMENTS FILED BY SDX IN CONNECTION WITH THE TRANSACTION, ANY INFORMATION RELEASED OR RECEIVED WITH RESPECT TO THE TRANSACTION MAY NOT BE ACCURATE OR COMPLETE AND SHOULD NOT BE RELIED UPON.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.
SOURCE SDX Energy Inc.
For further information: SDX Energy Inc., Paul Welch, President and Chief Executive Officer, Tel (London Head Office): +44 203 219 5640; Buchanan (PR), Ben Romney/Madeleine Seacombe, Tel: +44 207 466 5000