Sdx Energy Share Discussion Threads

[darola] 28/3/2018 12:33

Price not responding yet, but you'd have thought a few would buy in on anticipation of the upcoming news. And in contrast, I have no idea why anybody would sell at this stage, if you've come this far the probable good news in a few more weeks has to be worth waiting for.

[shakeypremis] 28/3/2018 10:25

Yes, that is the key to Morocco, having reserves that can produce for a significant length of time.

[haideralifool] 28/3/2018 09:06

I think that Edison summed up the situation in Morocco when they referred to there being "compartmentalised gas pockets". More specifically they said (from memory) that each well has been 0.8 and 2 bcf.

And if you go back to the latest prelims IIRC they say that the first 3 drills in this campaign only replaced the gas they had produced in the last financial year.

I hope this is a technically accurate conclusion but as I see it, Morocco is indeed very profitable, but the question is for how long?

The LM wells may help, going after the deep gas etc. may help also. But I think that question mark currently accounts for the market being nonplussed.

[shakeypremis] 28/3/2018 08:47

They don't add volume but they are very profitable, given SDX's working interest, zero tax and high gas sales prices in Morocco if SDX can fill the pipeline they will generate more revenue and profit from Morocco than 100mmscf/d in Egypt. So who cares about volume when the object is to make money!

[tournesol] 28/3/2018 07:58

HAF

I seem to remember PW bigging up the positive contribution that the Moroccan wells would make. Or am I misremembering?

[haideralifool] 27/3/2018 23:26

Thanks for the link. There's been a fixation with the profit margins in Morocco, at last PW explains why the success may not have moved the share price meter: 'Morocco wells are important to us but don't add volume potential', at 23.15.

[robbiekeane] 27/3/2018 15:55

From about 20mins 20 seconds
Full drilling programme ahead
Fully funded

all good news

[ifthecapfits] 26/3/2018 11:31

Jeez. Whats it going to take for this to be let go...

[neo26] 26/3/2018 09:26

CapsNot with the current wells they may later this year..

[neo26] 26/3/2018 09:25

This is why Morocco asset is great..Way better margins, steady income minimum 5 years..

[ifthecapfits] 26/3/2018 09:22

Are they going for oil at South D (need to go deeper for this from memory) or is it just the gas?

[shakeypremis] 26/3/2018 09:07

Haider, I think Jimmy's numbers are wrong, this was my response;

"Your numbers aren't correct Jimmy00, SDX will only receive circa 27.5% of the gross revenue generated from the South Disouq licenses. This is due to the fiscal regime in Egypt. The Egyptian government will take 50% of the production from the field without giving SDX or their partner a penny for it, that then leaves 50% of the production for SDX and IPR.

100% x 0.5 (state cut) = 50%
50% x 0.55 (SDX Working Interest) = 27.5%

Then the state will want tax on the profits SDX generate from that 27.5% stake.

Let's be very conservative and say SD can only produce at 50mmscf/d and the price the Egyptian government give SDX is $2.65 (hopefully it'll be higher than this, but as I say I am trying to be conservative).

50,000mscf/d @ $2.65/mscf = $132,500/d revenue gross
$132,500 x 0.275 (SDX's cut) = $36,400/d revenue to SDX
$36,400 x 300 (the field won't produce all day every day 24/7 for a year, 300 is probably too low but again I am being conservative) = $10,931,250 revenue to SDX per year

At 100mmsf/d that obviously doubles to $21,862,000 revenue. What profit SDX will generate from that is unknown but will likely be the majority of this number.

So you can see that SDX really do need to hit 100mmscf/d in order for South Disouq to pay off significantly thanks to the thieving Egyptian government.

Hopefully they do hit 100mmscf/d and hopefully they get significantly more than $2.65/mscf."

[neo26] 26/3/2018 08:31

If yunus hits then its interesting

[haideralifool] 26/3/2018 07:50

jimmy00 over on LSE has the following numbers:

"The costs associated with gas production are $7m a year at SD. At a potential $4 an mcf thats $200K/day revenue at low rates or $400K revenue at higher rates mentioned in the RNS. Or $60m or $120m a year revenue, so at 55% thats $33m or $66m a year revenue to SDX alone. Thats before any unexpected upside, and Paul is always conservative!"

Now the brokers are assuming $2.50 for Egyptian gas and there's the small matter of 40% tax. So I'd make his low rate figure of $33m more like $12m.

[hiddendepths] 26/3/2018 07:14

On to the big stuff! This could get the share price back on the charge. Tempted to add.

kreature - maybe you're moving at double time?

[captain james t kirk] 26/3/2018 07:10

Tick tock :)

[kreature] 25/3/2018 18:05

Was there something wrong with the podcast recording machine? Seems to be at half speed ?

[novicetrade68] 25/3/2018 16:16

Maybe it's for real this time, fingers crossed, there have been a few false dawns.

[robbiekeane] 25/3/2018 09:29

This is looking more of a bargain each week that passes. I may have to top up!!!

[lauders] 25/3/2018 00:21

Let's hope for a positive result in another 11-16 days or so:

“Success in LNB-1 will open up a large section of new acreage for development in the Gharb Basin, potentially allowing us to expand our overall production footprint in Morocco. We look forward to updating our stakeholders on the result in due course,” he added.

[lauders] 24/3/2018 04:17

Of course Malcy is also still bullish on SDX so it is not just PW who says "buy".

SDX Energy

Finals from SDX this morning which merely serve to confirm what a good year it was and how well 2018 has started. Understandably they concentrate on reserves, as one should, their WI of 2P reserves was 13.5 mmboe, up 45%, a very creditable performance with their existing business and the Circle acquisition delivering well. With revenues up 204% to $39.2m, on production up to 3,237 boepd up 171%, the 100% success with the drill bit last year came through to the bottom line.

And there is plenty of drilling excitement still to come, two more exploration wells will complete the Moroccan campaign, for the time being only, I am sure. Then attention focuses on South Disouq where we can expect two exploration wells and two appraisal wells with first production likely 2H this year. At NW Gemsa there were successful workovers and at Meseda two successful exploration wells plus of course the recently announced success at Rabul-5.

SDX had $30.6m of cash on the balance sheet as at 28 February this year partly as a result of favourable receivables incoming which is a big result and so SDX is fully funded for all operational needs and of course any potential acquisition opportunities that may arise. SDX remains amongst the most solid plays within the bucket list for its low cost, high margin offering and significant upside potential.

[royaloak] 23/3/2018 22:45

I agree, that's why I leave my Canadian $'s in the account so if I buy in Canada I only buy using these, and sell them in $'s also. Of course I am subject to currency fluctuations so that is a risk.

[thegreatgeraldo] 23/3/2018 17:35

royaloak,

Fair enough, not sure what my broker would want as his cut on the FX front, but there's no way I'd get anywhere near 1.86 to match the London price of 50p