SDX Energy exits Cameroon exploration venture

"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 Paul Welch, SDX Energy chief executive.

SDX Energy Plc (LON:SDX) has revealed it is withdrawing from the Bakassi West project, offshore Cameroon.

The partners in the venture had asked the Cameroon authorities for an extension to the current exploration phase, to allow further analysis following the Manatee-1 well.

Dana Petroleum, the project operator, wanted an extra year to complete analysis after Manatee-1 encountered a 26 metre gas bearing section but well bore conditions did not allow for a full suite of logging to be undertaken.

Analysis of the well’s lower intervals was inclusive, SDX noted.

The Cameroon authorities, however, have denied the extension request and have instead asked the partners to enter the next exploration phase which would mean commitments to drill another well.

"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 Paul Welch, SDX chief executive.

“The Bakassi West concession was acquired by SDX in October 2015 as a result of a merger between Sea Dragon Energy and Madison PetroGas.

“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."