Sdx Energy Share Discussion Threads

[11_percent] 18/9/2017 07:58

At least they got started on time.

[ieh fan] 18/9/2017 07:55

Hooray. Spudding.

[the drewster] 17/9/2017 20:50

Where is the clearest information regarding the Egypt trade receivables taken on as part of the Circle deal?

[thegreatgeraldo] 17/9/2017 14:29

gr,

There's a world of difference between the price of gas & the netback!! Presumably the terms for SD are currently under discussion

How can you say the seismic was "spot on"? At least we know why the flowtest results weren't published.

What's happened to your $100 mill free cashflow?

Captain,

I'm always happier when BoDs talk about working interest

[the drewster] 17/9/2017 13:59

Even at "just" $25m cash flow, there seems a gulf between business delivery and enterprise value.

Clearly the market is pricing in considerable risk, so hopefully the management risk management, and subsequent communication about how each is no longer a risk, will see the shares"factors" higher.

[captain james t kirk] 16/9/2017 07:41

tgg
I'm not splitting hairs but why doesn't he just state the more accurate figure
ie almost 5mmscf/d and emphasise that it's gross.
I'm never comfortable when there's not clarity.

[gloucester rugby] 16/9/2017 06:57

The g g. It is my understanding that the fiscal terms for existing producing fields is indeed $1 per mmscf,(forgot what the term applied ) but new production is at market rates. PW has intimated in recent interviews that production from SD will be priced at around $3 to $4 mmscf.

The recent CPR was conservative and it is believed that the SD thickens in the flanks. I suspect the eventual volume will be somewhere between PW,s optimism and the conservatism of the CPR. Having said that a huge mitigation is the superb flow rate. The seismic was absolutely spot on. I acknowledge your points and we should have a fair idea by 1st qtr 18, both with the completion of the 2 SD producing wells and the GSA. My calcs are $25m free cash from the first 2/3 producing wells. We shall see!

[thegreatgeraldo] 15/9/2017 20:47

Captain Kirk,

Clearly the 6mmscfd from Morocco is gross production, which nets SDX 750boepd, more in line with H1 production

[thegreatgeraldo] 15/9/2017 20:40

Current Egyptian netbacks (as per interims) are $1mmscf, so 45mmscfd equates to roughly $15 mill pa

As for their seismic interpretation, AFTER SD-1X, they thought they had one system. Now we hear from an excited malcy that Kelvin may give us 150bcf if successful. Quite what happened to the discovered "10 mmbbls" of condensate mentioned at the AGM remains to be seen.

PW wouldn't be the first to get carried away with seismic, but earlier in the year SD-1X was targeting 600bcf or so. I'd have been mightily impressed if he'd fessed up that re-interpretation of seismic, post SD-1X, had led them to a rather more modest concluson. Still plenty to play for, of course.

[gloucester rugby] 15/9/2017 20:13

My calculation is that net production currently stands at 4,000 BOPDE, and with the anticipated workovers should be around 4,500 BOPDE by end of 4th qtr. Assuming successful Moroccan campaign and increase to 10,000 mmscf/d net 7,500 SDX should equate to another 250BOPDE, so give or take around 5,000. A successful 1st stage SD campaign producing 40-50mmscf/d net to SDX should equate to 4,000 BOPDE at $4. again if 2nd stage drilling successful company looking at 80-100mmscf/d by end of 2nd qtr 2018. Which will equate to a gross company production BOPDE of 12,000 + . Of course this assumes success with the drillbit, but after SD there is a huge amount of confidence. Seismic indicates significant thickening on the flanks and significant uplift in volumes required to support the level of production. If it is indeed one system then everything is off the table. Let alone oil in the deeper region. All this with a conservative company developing assets from cash reserves and no debt.

[thegreatgeraldo] 15/9/2017 18:59

Yup, 639boepd from Morocco for the first 6 months of the year according to the interims. So current Moroccan production is up around two thirds compared with the first half.

[captain james t kirk] 15/9/2017 17:40

gloucester
I just had a look at the interview that you posted on 6th September.
In that PW states that current Morocco gas production is 6000 mmscf/d and the upcoming campaign should take that up to 10,000 mmscf/d.
To anyone, am I missing something here. In the 1st qtr and half year results, I calculate Morocco gas production at around 3500 mmscf/d on the pro forma basis.

The relevant comment starts at about 1min 45 secs.

[thegreatgeraldo] 15/9/2017 16:14

Like the sound of $100 mullion of free cashflow - got a breakdown of of which assets are providing that?

[gloucester rugby] 15/9/2017 15:52

Really interesting posts. I think JP is being very cautious. He wants to grow the company within its capital constraints and protect against some of the issues other explorers have of drilling beyond their means and then having to dilute enmasse. I have asked Mark re Morocco and bringing forward development plans in the light of the huge Margin. Mark said that the company have already brought forward Moroccan plans as originally looking to drill in 18. Having said that the company has added two additional exploration wells to the programme, part funded by the recent placement. I also think that the company are simply being prudent. They have a 3 to 5 year goal to produce 25 to 30k bopde and I genuinely think that SD and its potential has taken the company by surprise and could be a monster, both in terms of volume and flow rate. Unlike other explorers SD has infrastructure in place and hence low capex to get into production. I would however like to see an additional appointment on the exploration/technical side as I think the company needs boosting at the management level as PW has many balls to juggle at the moment and I suspect that is why there is a delay with workovers. All will come good in the next 6 months. I don,t think many companies offer such downside protection combined with imminent tripling of production. $100m free cash flow 2018/19.

[cashandcard] 15/9/2017 15:10

cjtk,


I think there are so many revolving pieces to the puzzle, the remainder may well come from new surveys/exploration/development and/or third party operators selling gas using SDX's pipeline.


Cash

[thegreatgeraldo] 15/9/2017 14:56

No disputing it's nice business, just cautioning against getting carried away!

Still hacked off about the SD-1X debacle & still scratching my head over the delay in getting new ESPs installed at Meseda.

[captain james t kirk] 15/9/2017 14:50

My concern continues to be the facts changing in short order. As you state it leads to confusion.
They are currently producing around 3-3500 mmscft/d pro forma from Morocco and as tgg states, if they discover their nearly 11 bcf of unrisked potential during the drilling campaign, then that could add another 5000 mmscft/d not allowing for depletion, over a 5 year period. That doesn't even half fill the pipeline.
However at currently $10 per mcft and potentially $12 per mcft, it's very nice business to have.

[neo26] 15/9/2017 14:01

cjtk

thats not what pw is saying now, this is why i am a bit confused.

If the current production last 5 years then its done its job in funding our SD project by then we will be extracting loads of gas from sd..

imho

[thegreatgeraldo] 15/9/2017 13:08

Current Moroccan drilling campaign is targetting just under 11bcf.... just about enough to supply 5mmscfd over a 5 year contract. To get close to filling the pipeline, they need bigger targets or a lot more wells.

[captain james t kirk] 15/9/2017 12:36

Regarding Morocco, did not PW in an previous interview, state that they want to get the gas pipeline up to full potential within the next two years equating to 24 mmcfd.
They wanted to double it in 2017 to 10-12 mmcufd and then double again in 2018.

[cashandcard] 15/9/2017 12:23

neo,


Keep in mind current production in Morocco is declining so I think they'll be looking to replace those dwindling reserves. The increment to that is decent given that agreed sales prices are increasing.


Cash

[neo26] 15/9/2017 12:20

CashI understand that but they are drilling 9 wells and hoping for 3mmcfd increment, that's a two/three year target too not from these well also.That confused me alittle , I was hoping to see a double in production from drilling these wells but that doesn't seem to be case according to PW.I believe SD will be company maker and Morocco assets providing the cash flow to do it.

[someuwin] 15/9/2017 12:00

Bought a few more.

[cashandcard] 15/9/2017 11:43

neo,


The deposits they are going after in Morocco are very small. Akin to nodding-donkey/stripper wells in texas, tapping into tiny deposits. Small production sold at market-leading prices can be very economic.


Cash