Sdx Energy Share Discussion Threads

[tom111] 20/5/2017 09:34

Not least to mention Brent oil finished nearly $54 last night

[haideralifool] 20/5/2017 09:16

Lauders they mentioned Libya at the AGM when asked about growth options, but then stated that E & M were enough. They do have ex-Centurion people working there, I spoke to Said Arrata of Centurion many years ago and they had been looking at Libya but the terms were too onerous (Soco concurred IIRC). I guess now they won't be, but there are other 'issues', which was a reason for the E&M focus.

[lauders] 20/5/2017 07:21

Been looking back at some of the older posts and found one that I had not seen before (nearly a year old!). It gives a good idea of Paul's view on Egypt and the potential he sees there, so perhaps in line with tournesol's 3-5 year view here although we have to remember all the Moroccan assets too and whatever else develops over the next year or two. Paul mentioned Tunisia in passing in one of the interviews, but said the focus was on the "big E" and then Morocco.



The Egyptian oil and gas sector is set to grow over the next five years, exploration and production company SDX Energy Inc.’s president and CEO Paul Welch said.

“It will grow. Businesses will grow, employment will grow,” Welch told Rigzone.

[lauders] 20/5/2017 02:04

PS. Didn't see this from Malcy posted yet, apologies if my eyesight is playing up!:

SDX Energy

Quarterly figures from SDX this morning but as usual the numbers are pretty much irrelevant, with the Circle deal, the raise and the excitement of South Disouq it has been a busy few months for the company. There is plenty of news on the way as well as the statement says that there has been operational progress in Morocco and that the company will drill seven wells this year in the region. In Egypt there is also much going on, the workover programme at NW Gemsa and the drilling of wells at Meseda along with the facility capacity upgrade. At South Disouq the company will complete the testing of the well and get moving on developing the gas with the aim of commercial production by Q1 2018. There will also be work on the next target, the deeper oil potential found in the recent well where a location has been planned. All in all it will be a most interesting time for SDX, fully funded and with a strong balance sheet it has the necessary high value production as well as appraisal and exploration programme to give it SDX appeal…

[deltrotter] 19/5/2017 21:11

Tournesol, and, as you have pointed out - that 133p is for the one target, SD-1.

They have multiple other targets and they will be confident based on their 3d.

And, this is only for 25% of South Disouq.

The CPR should be a cracking read!!

[rich73] 19/5/2017 21:04

Tournasol,

I must reiterate the outstanding posts over the past few, totally invaluable for anyone invested here and I for one am very grateful for sharing your research.

The potential here at SD seems quite staggering if the flow test goes as hoped, no wonder Paul is so excited. Anyway, I raise my glass of claret to all those invested here, and wish you a good weekend.

[brasso3] 19/5/2017 19:58

75p target within 1 month.

[thelagerkhan] 19/5/2017 19:44

Tournasol, some great posts, thank you.
I have had similar experiences at Oilbarrel,I went to see Hur a few years ago, I think that we had a chat, along with Tgg and ended up selling Hur and buying Sou at 9p after a great presentation by James Parsons.
I was at Oilcapital in September and after listening to Paul giving the Sdx presentation bought that day and have been adding ever since.
I was at the Shares event in Edinburgh and again a great presentation and we had a good chat with Paul after the event.
Sdx is now my largest holding and I look forward to a great future.

[thegreatgeraldo] 19/5/2017 19:07

tournesol,

Not sure the above factors in 47% net to gross....

[yasrub] 19/5/2017 19:05

Tournesol an outstanding effort and eye opening potential. Have a great weekend - SDX has a feel of plenty to come.

[tournesol] 19/5/2017 18:54

Eureka?

The SDX website carries links to Progressive Equity Research who put out sponsored research reports (like Edison do)

They have several reports on SDX = see www.progressive-research.com/tearsheet/sdx-energy, all look worthy of study.

The most recent report, published today says:

...Prior to drilling the SD-1X well, the gross mean prospective resources were estimated at 490 BCF of gas and 16.3 mmbbl of condensate (100 mmboe). The net pay and porosity of the reservoir were in line with pre-drill expectations. The SD-1X well also de-risks the 4 - 5 lookalike structures on the block.
 In the event of successful testing results and the volumes being in line with the pre-drill gross mean prospective resources, this could add a potential net 55 mmboe to the group’s reserves which are currently standing at approximately 12 mmboe. This would be a major boost to the company’s reserve base….

The previous report on 19/4 said:

Prior to the drilling of this well, we had valued this prospect on a risk adjusted basis using the industry standard valuation of discounted cash flow analysis. We had used the volumes and risks that had been assumed by its previous reserve auditor (De Goyler & MacNautghton) who had assessed the gross mean prospective resources of 490 BCF of gas and 16.3 mmbbl of condensate…

Having read and reread this several times I conclude that the numbers refer to the single prospect/target at SD-1 and not to the whole area. The 490BCF is consistent with the figure I quoted of 300-600BCF. It looks to me that this is an estimate of a single prospect rather than the wider area.

QED

The statement that adding 55mmboe to an existing reserves base of 12mmboe would be a major boost is a fine example of British under-statement.

Incidentally as a publisher of sponsored research, Progressive must get their data straight from the horse's mouth.

In the earlier of the 2 reports above Progressive go on to say:
...with a chance of success of approximately 1 in 7.  Using these metrics we had placed a risked valuation on this prospect of approximately 19 p/share out of our total valuation of 83 p/share for the company….

Seems to me that if 1/7 of the value = 19p then 100% of the value = 133p. That implies a valuation = 197p

That's a whole lot higher than my working assumption to-date but it does not seem to be unreasonable…...

[deltrotter] 19/5/2017 18:32

Please don't worry Tournesol. We can cope - really grateful for your efforts.

[tournesol] 19/5/2017 18:28

Rich 73

...I hope I haven't caused offence…

Absolutely no offence.

This is a really excellent discussion/exchange and it is very healthy to challenge/debate/argue/ offer different interpretations/cross check etc.

All good IMHO

Just wish I could validate the accuracy of my own understanding and comments and frustrated that there is so much scope for misinterpretation/misrepresentation.

I am now feeling concerned that I might have inadvertently said something wildly inaccurate.

Still you're all big boys. if I turn out to be fallible, you'll all cope.

[deltrotter] 19/5/2017 18:25

From the note - testing to take about four weeks...

"The excitement going forward will be the testing of the SD-1X gas condensate discovery in the South Disouq licence where it has a 55% operated working interest. SDX has released the rig and will look to start testing the well in the coming weeks. This testing programme is expected to take approximately 4 weeks. The key areas that the testing will prove are the recoverable volumes, the potential production rates from the wells and the ratio of gas to condensate. Prior to drilling this well, DeGoyler & MacNaughton (SDX’s independent reserve auditor) had estimated the gross mean prospective resources at 490 BCF of gas and 16.3 mmbbl of condensate (100 mmboe). Having proved that the Abu Madi interval works in the block, this will de-risk the 4-5 lookalike structures close to the discovery.

In the event of successful testing results and the volumes being in line with the pre-drill gross mean prospective resources, this could add a potential net 55 mmboe to the group’s reserves which are currently standing at approximately 12 mmboe. This would be a major boost to the company’s reserve base.

Prior to the drilling of this well, we had valued this prospect on a risk adjusted basis using the industry standard valuation of discounted cash flow analysis. We had used the volumes (490 BCF of gas and 16.3 mmbbl of condensate) and risking (chance of success of approximately 1 in 7). Using these metrics we had placed a risked valuation on this prospect of approximately 19p/share out of a total valuation of 83p/share for the company. Clearly the discovery of gas will have changed the risk profile of this prospect. However, we will not change our valuation until we have seen the results of the testing programme and we have a better understanding of the volumetrics of this potential discovery."

[tournesol] 19/5/2017 16:39

I remember many years ago attending an Oil Barrel conference at which the silver tongued Finian O'Sullivan spoke in very compelling terms about Burren in Turkmenistan and Congo. I slipped out at the interval and bought quite a lot of shares in BUR within an hour of hearing about them for the first time. Proved to be one of my best ever investments. Sometimes the investment case is overwhelmingly obvious.

I also have very fond memories of Dana and Hardman and lots of others. Some of these presented clear cut investment cases some required diligent research and analysis. Of course there have been a few disasters - Regal stands out in that category - and not a few damp squibs and lesser disappointments.

My expectation is that SDX will be as kind to me as Dana/Hardman/Burren were and that I will make a multiple of my investment without being exposed to excessive risk. I could be wrong. But I feel that everything here is in alignment - SYZYGY I think it's called. And when you encounter that you feel the gravitational pull of each aligned factor all working together.

In my opinion, SDX management are absolutely not silver tongued and they are really not smooth. They have much more valuable qualities than those. They are highly competent, dynamic, energetic, astute, hard working, creative, pragmatic, down to earth. They are not encumbered by bloated egos or delusions of world domination. They do sweat the small stuff. They do keep their eye on the ball. They look for the fast track but not the short cut. I like that. I like them.

They say that their ambition is to grow the co to the stage where it produces 20-25k boepd then sell it. That seems to me to be an entirely realistic and achievable ambition and it aligns the interests of the management with those of the shareholders. These guys are not looking for a lifestyle business which will keep them in directors' fees until they are old and grey. They are not running glitzy offices and private jets. They are not wearing stetsons and speaking in loud voices. They know how to work with the grain of local culture and circumstances and that is an invaluable attribute.

They have done this before. I trust them to do it again.

[deltrotter] 19/5/2017 16:31

Brief note on results:

[shakeypremis] 19/5/2017 15:40

Oil price on the up nicely over the last few days.

[captain james t kirk] 19/5/2017 14:47

Haider
I've already documented my thoughts about the Company and its management team but not withstanding that, I try not to leave any stone un turned. It can be unwealthy to fall a sleep at the wheel :) The majority of questions I pose to myself (I'm a good listener:)). Just thought I'd float this one on the board for other points of view.

[deltrotter] 19/5/2017 14:36

Flow rates due in the next few weeks according to Mark - PR for SDX. So I'd be looking at week after next.

Also, someone appears to be wanting a large line of stock judging by all the sells that have been soaked up and what I am being offered for a few 100k.....

[haideralifool] 19/5/2017 14:25

Cap'n Kirk, yesterday the management seemed to say that Ramadan affects the length of the working day out there. Also, the co's ops are out in the sticks and (just guessing) they may be a bit more traditional than people in cities.