Sdx Energy Share Discussion Threads

[tournesol] 02/10/2017 08:05

Gloucester Rugby

The way to respect other posters is by taking the time to enter into discussion. And by avoiding ad hominem responses.

Stick to the point.

[gloucester rugby] 02/10/2017 07:22

Mr T. One thing I really hate is arrogance. I think Griffin,s post was pretty accurate. All he said was that it is pretty useless basing a valuation on long term Oil prices. Infact SDX is in such a transition phase where production is very likely to double over the next 6 to 9 months that using static factors applicable to a full listing company is largely irrelevant. Disagree but have some respect.

[brasso3] 02/10/2017 06:45

Tournesol

Good post.

[tournesol] 02/10/2017 00:28

Griffin

Wrong, wrong, wrong.

P/E ratios are irrelevant for valuation of oil companies.

The value of the co is the value of the oil in the ground. Its reserves, resources and prospects can all be valued by applying an appropriate unit value, adjusted to take account of the position of the asset in its life cycle and by applying a risk factor (typically termed a CoS or chance of success).

When oil is produced and sold the co receives cash but loses some of its assets. The P/E ratio reflects the cash received but not the asset depletion.

Consider 2 identical companies each with 100 million barrels of oil in reserves. One produces 10 million barrels a year, the other produces 20 million bbls. The latter will have a P/E ratio which looks twice as good as the former. Is it worth twice as much? No of course not. It will exhaust its reserves in 5 years compared with the expected life of 10 years for the former.

Consider the exploration acreage of the 2 companies and their drilling plans and you will realise immediately that the P/E ratios of the 2 companies are not the centre of gravity of the comparison.

[tli8jaguar] 01/10/2017 11:33

Absolutely brilliant Griffin81.

Thirdly and most significantly, businesses are not static. No good company will generate material levels of profit or cash, only to simply sit on it for the next 10 years doing nothing productive until it goes bust

Bowleven fits the description.

[saucepan] 01/10/2017 11:12

Excellent post Griffin81; thank you.

[griffin81] 01/10/2017 10:46

Having reviewed the Edison report I once again find myself frustrated with their analysis on a number of levels. Firstly, long term future assumptions are always highly subjective and therefore invariably incorrect. Their view of the oil price in 2027 will be as accurate as mine, to base a current NAV over such a timescale is precarious at best, meaningless at worst. The market is significantly more short term than this. Based on management performance for the last 12 months, the track record indicates the business will have been built up, consolidated and sold off well before then.Secondly, if your going to make an assumption about how a company will execute its commercial strategy, for example commercialising any gas discovery at Kelvin, don't assume, instead leave the bloody office and actually ask them. Thirdly and most significantly, businesses are not static. No good company will generate material levels of profit or cash, only to simply sit on it for the next 10 years doing nothing productive until it goes bust. Which is the premise of this full NAV assessment. SDX has upcoming new 2D and 3D seismic work, unexplored licences, potential for oil and potential acquisitions in addition to all the other productive options a good company will employ to drive shareholder returns. Hence a P/E analysis is more applicable to SDX as a smaller, high margin and fast growing business than a static NAV analysis. Whilst I believe the following numbers are conservative (time will tell), to suggest in the report the company will generate 2018 revenues of $51.7m, net cash of $33.6m and PBT of $18.3m but then equate this to a Market Cap based on a 64p NAV of only c.£120m would deliver a P/E value which is so low it's just nonsense. It concerns me less experienced investors will take this static analysis and conclude 64p is all SDX is worth, it isn't, share prices in good companies are based on a mixture of performance and potential. It's a good job Edison were not my advisors during my M&A days, otherwise I would have never benefited from any of the business I acquired.

[the drewster] 29/9/2017 15:49

Full NAV 64p

They need further drilling success to move forward.

[darola] 29/9/2017 15:09

Edison note out.

‪

[9tintin] 29/9/2017 09:43

Bid/offer all over the place this morning'

Able to buy at 52.25p and sell at 52.3p - work that one out.

Needless to say took another 10k shares.

Difficult to tell just how many of the trades today were actually sells, as the price hasn't moved.

news soon ??

tintin

[the drewster] 28/9/2017 10:02

news can always go one of two ways basem1 ... some a very risk averse as the econmomy sails straight for very choppy waters.

[basem1] 28/9/2017 09:19

Some meaty selling over the last few days which they've needed to fill orders. I'm actually surprised just how much selling there has been with the upcoming newsflow. ??

[darola] 26/9/2017 11:24

Price dropping but there's not much stock. Can't get a quote for £10k at the offer.

Edit: took my money at 54.25, but have not moved the offer up.

[ifthecapfits] 25/9/2017 16:59

Oil on a RIP. Iraq (Kurdistan)/Venezuela/Iran - all could be switched off soon.....then watch POO fly!

[thegreatgeraldo] 22/9/2017 19:22

Looking at the graph of SP/Time above, one could pluck out any number of historic "resistance levels".

[the drewster] 22/9/2017 19:12

On my charting software

[the drewster] 22/9/2017 18:57

Historically a support and thus resistance level.

[thegreatgeraldo] 22/9/2017 16:54

54's history though!!! Does 55 have any relevance, other than being a round number?

[the drewster] 22/9/2017 14:42

55 test failed (this time)

[neo26] 22/9/2017 14:16

griffin

these will be very small finds currently they are producing 5mmcf, there target after drilling all 9 wells is 50% increase, so 7.5mmcfd. I think it will be around 10mmcfd.

But its easy money considering they have all the pipeline in place and fantastic $10 per mcf. No tax to pay for the first 10 years.

The biggie is South Disouq, they need to get going with this one...

[griffin81] 22/9/2017 10:37

I'm expecting an RNS next week to confirm target depth has been reached. PW did state each drill campaign in Morocco would take about 7 days, not including the follow-on testing

[parob] 22/9/2017 07:09

Technicals looking really good:

[vanmorrison60] 21/9/2017 19:51

To All Concerned: please ignore the rantings of tombul. He comes over from the Canadian board every once in a while to spew his vitriol. Never says anything credible or substantial. He clearly has an axe to grind.