SDX Energy Inc (LON:SDX) has announced results from the Ibn Yunus-1 well at South Disouq, Egypt (SDX 55%). Ibn Yunus-1 is the second consecutive gas discovery at South Disouq (after SD-1X) and encountered 100.8 net meters of conventional pay in the Abu Madi horizon, with average porosity of 28.5%. The well came in on prognosis but with a reservoir thickness and quality above pre-drill expectations. We expect to de-risk Ibn Yunus on flow testing; however, indicatively moving to an 80% chance of success (equivalent to our risking for SD-1X) from 32% would add 4.4p/share to our RENAV in our 90bcf recoverable case. We recently published a detailed update on our view of the group valuation, which stands at a core NAV of 58.3p/share and RENAV of 65.6p/share.
The Ibn Yunus-1 well opens up the Abu Madi Baltim trend beyond the SD-1X discovery area and likely de-risks the Kelvin prospect, which displays a similar seismic inversion response but to the south of SD-1X. Management estimates a combined volume across Ibn Yunus-1 and Kelvin of 150bcf unrisked and with total play potential of c 2.5tcf unrisked.
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