SDX Energy Plc (LON:SDX) shares rose on Friday as the firm said it has kicked off the drilling of the Salah (SD-6X) well at the South Disouq project in Egypt.
The well will be drilled down to a depth of 9,000 feet and it is expected to complete in late March or early April.
The exploration well is targeting an estimated 71bn cubic feet of gas. Its primary targets are in the Kafr el Sheikh and Abu Madi formations, which are already producing in other areas of South Disouq.
Salah will be followed by the Sobhi (SD-12X) well, targeting 33bn cubic feet in the Kafr el Sheikh formation.
"Salah and Sohbi are very exciting wells for the company with the potential to more than double the reserves to be processed through the South Disouq gas processing facilities,” said Mark Reid, SDX chief executive.
“We now have three rigs drilling simultaneously in Egypt and Morocco and I look forward to providing further updates on these campaigns in due course."
If successful, SDX will need to build tie-ins across the short distance – 8kms and 5.8kms respectively – to the South Disouq central processing facility, at an estimated cost of US$2.5mln.
SDX noted that, subject to results, to fully develop the 71bn resource at Salah two further new wells would likely be needed, while at Sohbi one further well would be needed to fully develop the 33bn resource.
In afternoon trading, SDX shares were 2.3% higher at 22.50p.