June 14 (UPI) -- Results from a drilling operation announced Thursday in the Gulf of Suez could dictate the next steps for oil exploitation, regionally-focused SDX Energy said.
SDX announced the start of an appraisal well, designated SRM-3, at the South Ramadan basin in the Egyptian waters of the Gulf of Suez. Drilling should last up to 90 days.
"The SRM-3 well is the last remaining commitment well on the South Ramadan concession," the company stated. "Based upon the results of this well the company will decide how best to optimize its position in the license."
The company is well funded with zero debt and on pace to double its production from its North African portfolio by the end of the year. A relatively minor producer, SDX focuses primarily on Egypt and Morocco, both emerging basins in North Africa.
In a report last month, SDX said its portfolio in Egypt posted minor, but consistent, gains. Last year, it paid $28.1 million to take over the Egyptian and Moroccan businesses of Circle Oil, a Ireland-based explorer.
The South Ramadan concession is located between the Ramadan field, with an estimated 550 million barrels of oil, and the Morgan field, with an estimated 1.5 million barrels of oil.
SDX posted revenue to March 31 of $11 million, up 35 percent from the same period last year. It realized $59.34 per barrel for oil, up 33 percent year-on-year.
Egyptian natural gas prospects improved in February when BP announced gas was being produced from its Atoll basin offshore Egypt, seven months ahead of schedule, less than two years after the initial discovery and 33 percent under the initial cost estimate.