Cairo-based Pico Oil has announced it has encountered oil pay at its well located in the South Ramadan offshore concession in Egypt’s Gulf of Suez.

Egypt’s General Petroleum Company (GPC) owns 50 per cent of the concession, while Pico Oil holds 37.5 per cent and operatorship of the concession. UK-headquartered SDX Energy is a 12.75 per cent equity owner in the concession.

SDX Energy said the SRM-3 well at South Ramadan reached a target depth of 15,635 feet and the operator had reported encountering 75 feet of net conventional oil pay in the Matulla section (primary target), 20 feet of net conventional oil pay in the Brown Limestone formation, and a further 15 feet of net conventional oil pay in the Sudr section.

The well will be completed in the Matulla section and then tested to establish whether it will flow at a commercial rate.

In addition, at the South Disouq concession, where SDX holds a 55 per cent working interest and is the operator, the development lease application submitted by SDX and its partner has been approved by the relevant authorities, and construction of the pipeline and central facility has started.

First production from the licence remains on track to start towards the end of the first half of 2019, with SDX expecting to achieve a gross plateau production rate of conventional natural gas of between 50 to 60 million cubic feet a day.

The 3D seismic acquisition programme spanning 170 square kilometres at South Disouq is 50 per cent complete and expected to conclude in early February.

The seismic data will then be processed and interpreted by the end of the third quarter of 2019, with drilling on the licence set to resume shortly after.