Sdx Energy Share Discussion Threads

[shakeypremis] 23/3/2019 16:04

The other companies they invest in are all much bigger and produce much more revenue and profits so one would assume they see a very bright future for SDX.

There was also another company in the UK called 'MEA ENERGY ADVISORY UK LLP ', which was renamed to 'WAHA CAPITAL INTERNATIONAL LLP' in October 2018, a few months after 'MEA Energy Investments Limited' was renamed to 'SDX SPV Ltd'.

While I still think the delist is being done to facilitate Waha being able to purchase more SDX shares I am now thinking it less likely that a takeover move is afoot.

hxxps://beta.companieshouse.gov.uk/company/OC413379

[shakeypremis] 23/3/2019 16:04

"Waha Private Equity will seek to achieve long-term capital appreciation by acquiring majority or significant minority stakes across growth sectors primarily in the MENA region."

From the presentation I linked below. This encourages me to some extent as it appears after looking at Waha for a while that they aren't in the business of taking over companies. Although they still possibly might with a view to sell it on at a later date.

[shakeypremis] 23/3/2019 16:03

Stuff I've dug up today on the largest shareholder;

I've been doing some digging around and it looks like MEA Energy Investments Ltd (now SDX SPV Ltd) is some kind of investment vehicle for Waha Capital who are an investment company based in Abu-Dhabi, who as of 2017, had some £2.3B of assets.

hxxps://www.wahacapital.ae/docs/default-source/default-document-library/fy-2017-investor-presentation-feb-18627a5ec39b1f643a8bfaff00004bf08c.pdf?sfvrsn=0

Michael Raynes definitely works for them in some capacity and even has an email address with them; [e-mail]

Now it's clear that Waha aren't going to run the company but they might well be interested in taking it private to fully reap the cashflow SDX is likely to produce in the future. They could also simply just want a bigger stake in SDX. They look to have bought their entire stake of 19.4% in 2017. I bet these guys will be buying more through SDX SPV Ltd once the delist is complete. Now we just have to hope the SPV is just for holding the shares and not a vehicle to take the company private.

[ll0ydy] 23/3/2019 14:50

I personally like the way Paul hinted at a acquisition in 2019. BP deal back on. Wishful thinking maybe.

[shakeypremis] 23/3/2019 11:26

Matchmade, what? You mean like South Disouq... lol *faceplam*

[matchmade] 22/3/2019 18:34

I noted PW's comment on CNG, but he didn't seem to hold much store by it in terms of sales any time soon..

[shakeypremis] 22/3/2019 17:04

Morocco Side Business

Despite my annoyance and misgivings about the delays in Egypt I did manage to notice through my frustration that Squelch mentioned that in Morocco, aside from their piped gas business which we all know about, they are also looking at selling CNG (compressed natural gas) to other customers. Presumably this stuff will be bottled or sold via tankers? Interesting, perhaps they have more gas than they can get customers for at the moment or perhaps this CNG side business has similarly favourable or even better economics than the current Morocco activities. Anyone else pick up on this? Of course Squelch was light on the detail. They seem to do that a lot. Not announcing things. Makes you think they don't want the share price rising...

[shakeypremis] 22/3/2019 16:58

Because they are paying him! lol. He won't take them to task in any meaningful way. Despite the delays and possible shenanigans going on here I still think SDX is very much undervalued but they need to get SD sodding well online and quickly. If the drilling programme in Egypt is half as successful as previous ones this company will quickly be making nearly it's entire current market cap in cash every year (if you take in to account Morocco).

[the drewster] 22/3/2019 16:26

Feb 2017, when Malcy added SDX to the Bucket List, they were above this price, and apart from the recent dip, anyone invested in the interim is underwater - why did Malcy not pick him up on this?

[itsriskythat] 22/3/2019 16:22

Watching the "Malcy Show" with Paul Welch ...

I was told how exciting these Egyptian and Moroccan businesses are, because Malcy used the word "exciting" in every other sentence. It was a shame that Paul's body language and tone of voice didn't echo Malcy's excitement. It is a "Show" which unfortunately has been repeated every quarter.

I'm afraid that actions will speak louder than words in the next quarter. I made a small profit on SDX in 2018, but only through selling in August.

[matchmade] 22/3/2019 15:48

Where's your evidence that drilling costs later this year will be 'huge'? Current capex is mostly for one-off pipeline and processing facilities, which SDX will then contol, either to the Egyptian grid or from well all the way direct to customer in Morocco.

[dsmith57] 22/3/2019 15:30

Just listened to Welch's Malcy interview. Total contempt for small shareholders. He seems to think that everyone has made money. Deluded arrogance. S. Disouq better be good because it seems that drilling costs will again be huge this year. Going round in circles.

[matchmade] 22/3/2019 15:10

Do the discoveries in Morocco really cost a fortune? PW claimed they pay for themselves in a year (less with the new more efficient exploration rig) and the low cost of production at about 10% of sales receipts makes them very profitable. What's been lacking is sales volume in Morocco, but with new customers joining and SD coming on stream, adding $20 million of sales (mostly pre-tax profit due to low production cost), SDX is going to become very cash-generative over the next year.

Yes, all extra earnings have been going on capex, but most of that's been pipeline-related, so once built, that's it and new discoveries can be added very quickly without the need for much new capex.

With new fixed gas contracts for five years now in place, the profits should really start to roll in now. I say wait another year before giving in.

[thegreatgeraldo] 22/3/2019 14:58

Nope, "all" the Moroccan discoveries aren't "pretty small fry". & the wells are very cheap....

[hiddendepths] 22/3/2019 14:50

Thanks for the link to to Malcy's interview with Paul. Here is malcy's analysis of the situation. I must say I agree with him and think the knockers on here are missing the point... but what's new. Delays are commonspread (I know!) in this industry and generally worse in Africa. It doesn't usually affect the investment case - indeed, I was expecting such a delay on SD and it didn't stop me investing. People are so short term these days - I wonder if the whole concept of investment is fading away. Anyway, over to Malcy!

Full year results from SDX this morning and whilst almost all the data was already known they were a very impressive set of numbers. Net revenue was up 37% to $53.7m and more importantly netbacks were up to $41.7m ($28.9m). Cash was down slightly to $17.4m ($25.8m) but that figure is also good given the $44m invested by the company last year. Production was 3,574 boed last year but will double this year with the bringing on of South Disouq where the central processing facility, the 10km pipeline and the four well tie-ins are complete and ready to start production of 50-60 MMscf/d in the middle of this year.

In Morocco business is going extremely well, SDX has picked up three new customers recently and are expecting two more this month, the Peugeot factory should go fully operational in May thus making suppliers, who also take SDX gas keen to deliver. The target of production by the year end of 9-11 MMscf/d may therefore be achieved earlier than expected and with new customers paying towards the top of the $10-11+ range the economics look stunning. More importantly, SDX has announced that it is restarting its drilling programme in Morocco with a 12 well programme in the autumn of which three may be in this year.

The drilling campaign in Morocco, along with a number of exploration and infill wells in Egypt are all funded internally by SDX coming from existing cash balances and free cash flow which is helped by a 36% fall in receivables during the course of the year. With South Disouq coming on-stream in the middle of the year and the Morocco campaign scheduled for 3Q 2019 the stage is set for SDX to flourish and they are plenty cheap enough at the moment so upside progress of a substantial nature should be made.

[the drewster] 22/3/2019 14:24

A bit disingenuous saying all shareholders made money. Anyone buying from February 2017 is underwater.

[kaos3] 22/3/2019 13:54

they have good communication with both big shareholders. consulting them on business, getting opinions ...

you could be right as they are almost admitting sdx being partially tun by them

[shakeypremis] 22/3/2019 13:44

It's becoming comical and bordering on unbelievable. Are they intentionally stalling to allow the two main shareholders to take this over easily after delist or at the very least buy up cheap shares before SD comes online.

[swindon41] 22/3/2019 13:39

SD now on stream H2 and not H1? Appreciate Egyptian timescales etc but PW credibility looking questionable imho. Am long SDX as this is a solid cash generating fully funded businesses, but disappointed in timescales slipping again and again on their major new asset. Doh!

[haideralifool] 22/3/2019 12:53

TSX listing supposed to cost $500k to $750k annually

[thomasthetank1] 22/3/2019 11:10

All - please see below a link to an interview of Paul Welch, CEO of SDX Energy, and Malcolm Graham-Wood, Malcy's blog, on Core Finance TV.

[ifthecapfits] 22/3/2019 09:52

lol - every village has one.

[hiddendepths] 22/3/2019 09:33

Brilliant and insightful analysis PJJ71.

[pjj71] 22/3/2019 08:23

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