Result of Kelvin-1X Exploration Well in Egypt

SDX Energy Inc. (SDX), announces that the Kelvin-1X exploration well at South Disouq, Egypt (SDX 55% working interest and operator) has been drilled to a total depth of 8075 feet, encountering 606 net feet of high quality reservoir interval in the Abu-Madi formation with an average porosity of 21%. However, the sands had low gas saturation and were not deemed to be commercial.

The well will now be plugged and abandoned, and the rig will move to the site of the next drilling location on the South Disouq licence, the SD-4X appraisal well.

Following the April 2017 SD-1X discovery on South Disouq, SDX targeted two near-field prospects, Ibn Yunus, where the Company has recently announced a significant discovery, and Kelvin. The Kelvin-1X well was located structurally updip of the SD-1X discovery and thought to potentially be connected to the original SD-1X structure by a continuous gas bearing section. However, the identified layer appears to be separated from the original discovery and contains gas with non-commercial saturations. The Company is now focused on completing the development at SD-1X and bringing both discoveries on stream as quickly as possible, with first gas prior to year-end 2018.

Paul Welch, President and CEO of SDX, commented:
"The results of the Kelvin-1X well are not commercial and will not contribute to the initial production in this first phase of the development at South Disouq. However, today’s news follows the positive results from previous drilling activity in the concession where our first two wells were commercial discoveries. The Kelvin-1X location was an ambitious step-out from the crest of the identified structure where we were exploring for a larger stratigraphic portion of the identified trap. Further potential exists within the current structure but in a location that could not be reached by side-tracking the well from the Kelvin-1X location. As a result, we have decided to move forward drilling the appraisal well locations in the original SD-1X structure so as not to delay the start of production targeted for the end of the year. After we have completed the appraisal drilling and established initial production we plan to commence a further exploration programme that will target both the remaining potential in the Kelvin structure along with the deeper oil potential within the block. We have had a very good run of drilling success lately and it is unfortunate that Kelvin-1X hasn’t worked out. However, we are looking forward to drilling two appraisal wells on the SD-1X structure and reporting on these in due course."

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