SDX Energy Inc. announced Thursday its withdrawal from the Bakassi West concession in Cameroon, following the completion of drilling activities on the Manatee-1X well, located in shallow water in the Rio Del Rey Basin.
The company held a 35 percent working interest (38.89 percent paying interest) in the concession, which was operated by Dana Petroleum. Dana had requested a one-year extension to complete the analysis of the results of the well, which intersected 85 feet of gas bearing section of varying quality throughout the wellbore.
Wellbore conditions did not allow the acquisition of a full suite of logging tools in the deeper sections of the hole and made the analysis of the lower intervals in the well inconclusive. Authorities did not grant the operator’s proposal of a one year extension and instead asked the company to enter into the second exploration period, which required an additional well commitment. As a result, SDX declined to continue to move forward with the project.
FirstEnergy revealed that market reaction to SDX’s decision to exit the Cameroon concession was “neutral”.
“The decision to avoid an additional well commitment here is sensible in our view,” said FirstEnergy in a brief research note sent to Rigzone.
“The Bakassi West concession is not a core asset to our business and we do not believe it would have been prudent to continue investing in it,” said SDX Energy CEO Paul Welch in a company statement.
“Whilst the concession was an exciting opportunity, it was fundamentally non-core, and our subsequent exit allows the company to focus all of our efforts on growing our high margin production business in our core assets across Egypt. We are continuing to move forward as planned with our operations in Egypt and I look forward to reporting on our progress in subsequent updates,” he added.
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