SDX Energy Unlocks Gas Riches in Morocco's KSR-21 Well

Monday 29 April 2024 - 16:00

SDX Energy, a London-listed energy company, has commenced gas production at its highly anticipated KSR-21 well in Morocco's Gharb Basin. This significant development follows the company's successful acquisition of government approval, marking a pivotal moment in SDX Energy's strategic expansion into the Moroccan energy sector.

The announcement, made on Monday, signals a new chapter in SDX Energy's operations in North Africa, where the company has been gaining traction in recent months. With the KSR-21 well already integrated into the existing infrastructure, the start of gas production was a natural step once regulatory approval was obtained.

This achievement comes on the heels of SDX Energy's recent divestment of its West Gharib interests in Egypt, a deal that generated $6.6 million. The company plans to use these funds to enhance its cash-generating activities in Morocco, underscoring its commitment to the region.

SDX Energy's strategic direction aligns with a broader shift toward renewable and hybrid energy production, an initiative unveiled in November of last year. Morocco, with its abundant natural resources and favorable business environment, has become a focal point for the company's diversification efforts.

SDX Energy's presence in Morocco has grown significantly, with several recent milestones highlighting the company's dedication to the region. Earlier this month, SDX Energy began drilling operations at the Beni Malek-2 well (BMK-2) in the Gharb Basin, further strengthening its exploration activities.

The company's strategy goes beyond exploration. In January 2024, SDX Energy extended a prepayment deal with CITIC Dicastal subsidiary Dika Morocco Africa (DMA), ensuring a steady gas supply for the first quarter of the year. This partnership solidifies SDX Energy's reputation as a reliable energy provider.

With a 75% working interest across its Moroccan portfolio—including the Sebou Central, Gharb Occidental, Moulay Bouchta Ouest, and Lalla Mimouna Sud exploration permits—SDX Energy is well-positioned to capitalize on the region's potential. The company also manages a range of exploitation concessions with active production wells, diversifying its revenue streams.

Moreover, SDX Energy benefits from selling gas from its Moroccan assets to eight customers at contracted prices ranging from $10 to $12 per thousand cubic feet (Mcf), demonstrating the strong demand for energy resources in the region.

As SDX Energy continues to harness the gas potential of the KSR-21 well, its strategic vision and commitment to Morocco's energy sector position the company as a significant player in the country's growing energy landscape. With a diversified portfolio and a focus on innovation, SDX Energy is set to drive Morocco's energy transformation while delivering substantial value to its stakeholders.