SDX Energy abandons Moroccan well after drilling disappointment

Oil and gas explorer SDX Energy has abandoned its ELQ-1 well on the Gharb Centre permit in Northern Morocco and will move onto another prospect nearby.

Drilling to a depth of 1,484 metres encountered just 22.6 net metres of reservoir interval and two metres of marginal net conventional gas pay, leading SDX's management to the opinion that the intervals were not commercially sufficient for it to complete the well. SDX will plug the well and then move the drilling rig to the nearby ONZ-7 development location.

Elsewhere, SDX was granted a four-month extension to 22 July at its Lalla Mimouna permit, allowing it sufficient time to evaluate the results of its upcoming exploration drilling campaign, expected to take place in March. The AIM-listed outfit has connected the KSR-16 well to the sales line, with flow testing expected to commence later in January.

Paul Welch, president and chief executive of SDX, said, "Despite the result at ELQ-1, we remain very upbeat about the remainder of our Moroccan drilling campaign, which has already yielded discoveries from the first three of this nine well campaign."

"It is important to note that this well is also the only one in the current program drilled using legacy low-resolution 3D data, acquired from the previous operator. It was an important test that has strengthened our belief in the need to acquire high-resolution 3D seismic data, that we have successfully used in our first three wells, across all of our concessions of interest."

As of 0920 GMT, shares had dropped 4.81% to 51.50p.