Egyptian natural gas prospects improving

The company in June announced the discovery of natural gas at a site in the South Disouq license dubbed SD-4X. On Monday, SDX said flow tests were carried out with few interruptions or complications.

"We intend to connect this well to infrastructure located adjacent to our SD-1X discovery over the coming months," Paul Welch, President and CEO of SDX, said in a statement. "We are targeting a late fourth quarter 2018 start-up of production in South Disouq and this well test result provides us with additional confidence to deliver on our planned plateau rate of 50 million standard cubic feet per day of conventional natural gas."

Natural gas accounts for the bulk of the Egyptian energy mix and the country's emerging prospects are important for arresting declines that began at the early part of the decade.

The Central Bank of Egypt said gross domestic product in September, the last full month for which it published data, grew by about 5.7 percent. Natural gas contributed 0.6 percent to that.

The bank said improvements in the industrial sector were led primarily by natural gas extraction.

Welch said his company was well funded with zero debt and on pace to double its production from its North African portfolio by the end of the year.

SDX posted revenue on March 31 of $11 million, up 35 percent from the same period last year. The company in 2017 paid $28.1 million to take over the Egyptian and Moroccan businesses of Circle Oil.