Sdx Energy Share Discussion Threads

[ashkv] 18/8/2021 14:44

· The OYF-3, KSR-17 and KSR-18 wells were all commercial successes, with OYF-3 and KSR-17 already connected and producing into the Company's infrastructure, with KSR-18 to be tested and connected shortly. Management estimates that 1.5-1.6bcf of gross resources have been added by these wells, which is in line with pre-drill P50 estimates. Preparations are underway for the drilling of up to two additional wells in Morocco later in the year.

[ashkv] 18/8/2021 14:38

P.S. IMHO Shakey is a troll or a disgruntled employee / similar - has been dissing SDX on other boards...

[ashkv] 18/8/2021 14:38

Enterprise Value of US$26.65 million at 12.5p Share price is now less than yearly Capex of $28mn for the year 2021 - GO FIGURE

Which is grossly unfair - as the company has many avenues to grow - IS ZERO DEBT AND A CASH COW

Enterprise Value (EV / Per Barrel) -> $4,517

Brent $69.50
SP 12.5
GBPUSD 1.375
Market Cap GBP -> £26,000,000
Market Cap USD -> $35,750,000
Net Cash -> $9,100,000
Enterprise Value USD -> $26,650,000
Guidance Prodn -> 5,900 Using Actual (Q2 Production Figures)
EV-USD -> $26,650,000
EV/Barrel-USD -> $4,517

[ashkv] 18/8/2021 14:37

SDX at 5 year lows today and a deep value play.

SDX Bloomberg Sell Side Analyst 12m Average Target Price 40p- As of 11 Aug 2021

Stifel: Analyst -> Chris Wheaton, - Recommendation -> Buy. Target Price -> 50p. Updated -> 5 August 2021
Auctus Advisors: Analyst -> Stephane Foucaud, - Recommendation -> Not Provided. Target Price -> 35p. Updated -> 16 July 2021
Peel Hunt: Analyst -> Matt Cooper, - Recommendation -> Buy. Target Price -> 35p. Updated -> 5 July 2021

[ashkv] 18/8/2021 14:37

Per 2020 Annual reports - reserves in Morroc were 0.55mn of 2p - annual production is around 0.30 of 2p reserves
This years summer drilling has added more than this - and therefore Morocco has 2 years of reserves remaining with further drilling of 2 wells later this year....

[ashkv] 18/8/2021 14:35

2021 Outlook
Four or five wells will be drilled in two campaigns
in Q2 and Q4 2021. As the drilling rig is stacked in
the Company’s yard in Morocco, there will be no
significant mobilisation cost.

Per SDX 2020 annual report - this is outrageous why not just buy the rig rather than pay criminal charges for the same!!!

[ashkv] 18/8/2021 14:30

SDX has 100bcf of propsects already earmarked in South Disouq - which is equivalent to 20mn barrels of oil equivalent - or nearly 2x current reserves of 11.1mn BoE - which is about 5.5 years of reserve life
Even if half of SD prospects come in that extends life by another 5 years.

[shakeypremis] 18/8/2021 13:42

I do hope you are right regarding the Top Nappe. It probably won't mean much for SDX in terms of revenues because that is dependent on new customers which they don't seem to be able to find and don't really have the reserves for (at the moment at least), but it could mean more in terms of yearly free cash flow as the idea is they will be cheaper to drill.

[shakeypremis] 18/8/2021 13:41

Sorry, I don't know why I said one year, I was looking at some old notes.

[neo26] 18/8/2021 13:33

They have 3 years of reserves in morocco.?Im convinced they will find gas in the top nappe..

[shakeypremis] 18/8/2021 13:32

I am not sure they can stop exploring in Morocco, they have to supply customers with gas. Morocco will run out of reserves in not much more than one year.

[neo26] 18/8/2021 13:29

Even if they run down the reserves and also stop exploring, sdx will have over twice the current mkt cap in cash.

[shakeypremis] 18/8/2021 13:21

I think the market is valuing SDX in such a way that it expects SDX are going to run out of reserves and thus cash.

Also pricing in that by 2022 production at SD will be in decline. If Mohsen comes in then they expect that it will start to decline from 2023. Mohsen won't be drilled until next year anyway, so production is going to decline in 2022, not by very much, but decline it will. All of these other prospects they have at SD are even smaller than Mohsen. They aren't all going to come in. Right now, the most probable outcome is that production declines in South Disouq from 2022 onwards and that means lower earnings and given their current yearly spend in Morocco I think that also means declining cash on the balance sheet from 2022 onwards.

[haywards26] 18/8/2021 12:52

Baldguvnor,

I try to ignore share price movements and filter as background noise. I am not a trader.

Instead I focus on company performance (profitability, growth, balance sheet net assets and retained earnings growth), communication, forward plans and the business environment.

If the elements I focus on move positively the share price has to at some point follow.

The stock market can be irrational and offers opportunities to buy and sell in cycles of sentiment.

Sentiment is obviously low today given the lack of success on this one drill.

So far SDX has clearly been a poor investment, but I believe the market is currently undervaluing us. How long that undervaluation remains is of course unknown.

[wigwammer] 18/8/2021 12:39

Sometimes the price itself is the catalyst. There can't be many ungeared E&P plays sitting on this multiple of sales and tangible book value.

[baldguvnor54] 18/8/2021 12:25

Fair points from Haywards26. Welch was a BS merchant. Also agree the comms have been much improved- should be given the amount the advisers they have (and also one of their NEDs is a comms guy).
The trouble with the "hold and be patient" approach is what is going to be the catalyst that will reverse the share price slide? The dribble down in the price has been going on for a heck of a long time- and hard to see what news can come to suddenly make institutional investors want to participate. Micro cap E&P is a tough place to be, particularly with the absence of a strategy.

[ride daice] 18/8/2021 11:22

They're certainly making enough cash to pay the wages which is all that matters imho.

[haywards26] 18/8/2021 11:19

Disappointing news for sure..but such news is all part and parcel of being invested in exploration companies.

I think some of the criticism of management here is harsh.. the current board in my view have delivered to a reasonable level through a difficult environment, they appear professional and issue clear comms. They got South Disouq producing within reasonable timeframes following the delay after delays of previous management who over promised and under delivered.

Have investors forgotten the previous management disaster - Welch!

Happy to hold and be patient. Operating profitably and with a market cap below net asset value..

[shakeypremis] 18/8/2021 10:17

Could just be traders looking for a quick buck. Buying isn't that significant. we don't really want a buyout at this point. Most of us will get severely shafted. From current price no one will be paying more than 50% more than market price.

[baldguvnor54] 18/8/2021 10:02

Interesting share buying this morning as noted by neo26- with luck it is an acquirer or activist fund. There are two conflicting forces- the stock is cheap on fundamentals- but the management have not set out a strategy for creating value. If the buyer is an activist fund I hope they move quickly to replace the whole Board- they look well paid for presiding over value destruction. If it is a bidder- please follow through and bid! There is value in the stock, but it needs unlocking.

[shakeypremis] 18/8/2021 09:55

We need another investor call where we can quiz the management on their lack of strategy and the current downward trajectory. Somehow I doubt we'll get one.

[shakeypremis] 18/8/2021 08:59

The problem SDX has is that it spends so much of it's free-cashflow simply replacing produced reserves in Morocco. Yes they do show a return on investment but it's not large and always several years out. If they can't find significantly more gas in Egypt and increase production we are kind of stuck in this cycle forever.

[jungmana] 18/8/2021 08:46

Well I know but so much noise was made about hanut over the last 3 weeks. Anyway as I said sdx is unloved and investors over the last 2 years here come and go frustrated. Good luck and I hope works well for you.

[neo26] 18/8/2021 08:44

Someone is mopping up, over 1.1m in two trades.Cant buy online.