WTI (Aug)  $95.78 -52c, Brent (Sept) $99.10 -47c, Diff -$3.32 +5c

USNG (Sept) $6.64 +4c, UKNG (Aug) 235.0p -35.0p, TTF €171.395 -€7.60

Oil price

Oil is quiet ahead of Sleepy Joe’s meetings with MbS later today, expect nothing, even if I did have spare capacity I wouldn’t shove it out now…Whatever the market thinks about Covid, inflation, recession, US rates etc I would be surprised to see any significant weakness and before long the Hedgies will be starting to get twitchy and buy back their recent sales.

SDX Energy

SDX has provided an update on the testing of its gas discovery at the MA-1X well that targeted the Mohsen prospect, within the Exploration Extension Area of South Disouq.

The MA-1X (SDX WI: 67%) discovery, announced on 8 June, is currently in the process of being tested.  As expected, the well test showed good flow rates of c. 8.0 MMscf/d commensurate with the high quality Kafr El Sheikh Formation reservoir around the well bore, which has an average porosity of 31.9%.  However, the well-head pressure decline observed over a three-day production test was higher than expected, which could indicate that a lower volume of gas is connected to the MA-1X well bore compared to pre-drill estimates.  Whilst this does not change the Company’s estimate of overall gas in place in the discovery, it may indicate that there is a change in facies closer than expected to the MA-1X well bore that could be compartmentalising the gas to some extent.  The Company is currently undertaking a pressure build up test and will obtain the relevant data from down hole gauges early next week, the results of which will be available in the coming weeks. Additionally, the existing 3D seismic data around the discovery will be reprocessed and re-interpreted. The final results of this work are expected to be available in three months’ time and will inform the requirements to commercialise the discovery, which may necessitate more wells than the two wells initially estimated to produce the gas.

Mark Reid, CEO of SDX, commented:

“The higher-than-expected pressure decline from the MA-1X test is a surprise and inconsistent with what we have seen in our analogous Ibn Yunus wells.  We will work closely with our partners over the next three months interpreting the test results and reprocessing and re-interpreting the existing 3D seismic over the discovery.  At the end of this process, we will update the market as to the proposed commercialisation strategy for the discovery which may mean that an additional well or wells  could be required to produce out this discovery.”

SDX also announced the completion of drilling at the MSD-23 infill development well on the Meseda field in its West Gharib concession, Egypt (SDX: 50% working interest). MSD-23 encountered the primary top Asl Formation reservoir at 3,909 feet MD (3,112 feet TVDSS) and reached a TD of 4,449 feet MD on 10 July. The well encountered 131.5 feet of good-quality, net oil pay sandstone, with an average porosity of 24.1% in the Asl Formation reservoir. The net pay was split across 3 separate sand units, with the upper-most sand covering 7 feet of net pay with 27.4% porosity. This upper oil-bearing sand is at virgin pressure meaning that it has not been depleted by any surrounding wells and it also represents an unanticipated upside as it was not included in pre-drill estimates.  MSD-23 will now be tied-in to the existing facilities and flow tested. 

MSD-23 is the fifth well in a fully funded, 13-well development campaign on the Meseda and Rabul oil fields in the West Gharib concession, Egyptian Eastern Desert. Operations at the third well, MSD-20, are expected to recommence later this month following the replacement of a rig which had experienced operational issues. The development drilling campaign is aimed at growing  gross production to c.3,500 – 4,000 bbl/d by early 2023.

The rig will now move to the next well in the campaign.

Mark Reid, CEO of SDX, commented:

“The logs from MSD-23 indicate an excellent result with the virgin pressure upper sand of particular interest. The well will now be connected to our infrastructure and flow tested and we will update the market on the results of this in the coming weeks. With MSD-23 coming online we expect to increase gross production to 2,300 – 2,400 bbl/d and we are anticipating further increasing production through the completion of operations at MSD-20 and the drilling of the eight remaining wells in the campaign over the next year. I look forward to updating the market further as the campaign progresses.”

Given the corporate situation well results are pretty irrelevant right now but this is a bad news, good news situation but unlikely to need to change the terms of the bid.  

And finally…

Another big weekend of sport coming up, starting with the rugby where after a South wash two weeks ago the Northern Hemisphere countries all got their own back last saturday leaving it all square across the board. The All Blacks v Ireland is at 08:05, Wallabies v England (10:55), Springboks v Wales (16:05) and The Pumas v Scotland (20:10).

The 2nd ODI between England and India yesterday ended with a win for the home side and Surrey’s Reece Topley took 6-24 in a victory few expected after the drubbing I saw at The Oval on Tuesday. The final match in the series is on Sunday at 11:00 hours from Old Trafford.

The best cricket action will actually be tomorrow at Edgbaston where the T20 finals day takes place. How Surrey aren’t there is difficult to believe but the day starts with the Roses match followed by the cider boys derby between Hampshire and Somerset, both winners play the final in the evening.

Tonight sees the dead rubber between England and Northern Ireland in the Womens Euros as the former are already through and the latter can’t even with a win.

Racing is at Newmarket and Newbury, punters who complain about small fields will be grumbling as at Newbury there is a race with no runners at all. It turns out that it is a strike by racehorse trainers complaining about paltry prize money, a first world problem methinks….

And of course the golf where St Andrews is playing fast and loose, overnight leader Cam Young is 8 shots under par and behind him is Rory McIlroy 6 under.