SDX Energy announces it is set to accelerate drilling in Morocco after permit extensions

Courtney Goldsmith
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SDX's shares are up over 20 per cent in the last fortnight (Source: Getty)

North Africa-focused oil and gas firm SDX Energy today said its exploration permits in Morocco were renewed, allowing it to drill new wells this year.

The London-based firm will drill two exploration wells at its Lalla Mimouna site in the second half of 2017, where its contract has been renewed until March 2018.

Its Sebou permit has been renewed for eight years, and SDX has committed to drilling three exploration wells within the first four-year period. If drilling is successful, the sites will provide additional production capacity and reserves.

This is more good news for the Alternative Investment Market-listed company which, earlier this month, found gas at its well in Egypt's Nile Delta.

Sam Wahab, oil and gas researcher at Cantor Fitzgerald, said SDX's share price is set to rise as drilling activity accelerates.

Wahab said:

We have been encouraged by the pace of operational progress SDX has demonstrated over the past 12 months, and investors can look forward to a period of significant drilling activity providing share price catalysts that set the company apart from its Aim-listed constituents in our view.

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Chief executive Paul Welch said: "The Lalla Mimouna and Sebou concessions in Morocco provide us with the potential to further grow the business as we seek to get the most out of the opportunity that exists in Morocco’s local gas market.

"The remainder of the year is set to be a period of high activity in Morocco, with a total of seven wells to be drilled. This will continue to build on the solid progress made to date for SDX in delivering high margin growth across the portfolio."

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