Sdx Energy Share Discussion Threads

[captain james t kirk] 05/7/2017 09:37

The Enterprise has left orbit this morning as well.
I'm sure we will return at a later date.
Good luck to all.

[haideralifool] 05/7/2017 09:31

Thanks for your input tournesol, informed as ever.

[tournesol] 05/7/2017 09:23

Look back at the various analyst reports that followed the SD-1X discovery.

Example: Capital Network on 25/4/17

..Following the SD-1X gas discovery... estimate the risked value of 200-300BCF of gas and 50MMbbl of oil resources to be $165m. We base this risked valuation on the pre-drill third-party assessment, raising the CoS to 67% for a 250BCF of discovered gas resources, and apply a $5/bbl value to 50MMbbl of prospective oil resources with a CoS of 25%.

Using the same rationale and applying a CoS of 50%, we estimate the value of a 250BCF remaining gas potential in the South Disouq licence at $80m, which results in an updated ReNAV of $380m, up from pre-drill 3rd party assessment of $180.3m.

From the timing of share price movements in relation to news flow since the beginning of this year, we estimate that the impact of the SD-1X well to date is about 21p, or $50m out of our estimated $165m, i.e. 30% priced in…..

Point 1 - As evident from the above, the analysts, like me, were expecting 200-300BCF and 50mmbo. Today's RNS has come in with only 180 BCF - and that as 3C which is a long, long, long way from 2P. The 2C figure is only 47BCF. So we are a very long and arduous distance away from 250BCF. And what usually happens is that as reserves mature from 3C to 2C to 2P we see a progressive reduction. ie 2P<2C<3C

Point 2 - today's resources numbers are NOT net to SDX. They are gross and relate to the asset which is shared with partners/govt. SDX's share is only a portion.

Point 3 - according to the analysis cited above, 21p was already in the price for SD. How much more is left to be factored in? What risk factor should we apply to that?

I see the figures released today as being disappointing in comparison with the expectations raised by the comments made by the company after the discovery and at the AGM. My own expectations were in line with Capital Network's.

I expect the share price probably will do well in the long term but I think that the short term contribution from SD will be smaller than expected by most. Time will be required for Morocco and for development of the existing producing assets in Egypt. With less support from SD I expect the share price to experience a period of weakness. My holding in SDX was a significant exposure - 10% of my portfolio. Most of the rest is already in cash whilst I reconsider my overall investment strategy. So SDX represented the vast majority of my exposure to equities.

I have actually exited completely. I see that as a short term precaution and hope to re-enter at a later date. I wont' mind if that is at a higher price if that goes with an improved risk attached. I won't mind if it is a lower price with the same risk.

And I won't much mind if I am proved wrong altogether. It won't be the first time.

Good luck to those still holding. My hope is to rejoin you when the circumstances are propitious.

[cashandcard] 05/7/2017 09:02

Tournesol,


I agree, it does look like the prospective resources figures aggregated across 4-5 prospects are not huge. However, I look at the real potential for oil here and am excited about the possibility that it may come into play again soon.


Cash

[cashandcard] 05/7/2017 08:57

A good update and it finally puts to bed the the confusion around 'dry gas' mentioned by the company in flowtesting. The gas-condensate discovery plus deep oil potential will take this to another level, give it 6-12months.

Now the focus moves to Morocco, its a shrewd move to focus on extremely high-margin gas developments whilst oil is meandering between $45-$55/bbl.


Cash

[pauliewonder] 05/7/2017 08:54

Well the price action is frustrating. Plenty of potential here and it doesn't seem to be getting valued. The run up to the sdx1 drill saw us get to around 70p and PW said at that point he though the rns about the gas find and then the presence of hydrocarbons rns was not received well by the market, in which he was surprised because it was very positive. We are nearly 30% down since then

[soulsauce] 05/7/2017 08:35

tournesol the share price is not much further north than prior to discovery at SD-1 and factors nothing in for the oil prospectivity.
I can not understand why you would be disappointed enough to lower your holding?

[hiddendepths] 05/7/2017 08:35

Ita tournesol - except I think that that little markdown is probably enough.

[soulsauce] 05/7/2017 08:31

Lauders sorry to hear about that, been there many times myself but you are safe in the knowledge that those bought today will turn you a profit.

del exactly.

[tournesol] 05/7/2017 08:29

It is a cracking little company but I'm disappointed with today's figures for SD. I think the market might be disappointed too and that the share price is likely to suffer. I've reduced my exposure.

[deltrotter] 05/7/2017 08:29

Who knows yasrub - IMO this should be 70-80p now, climbing to £1 over the last quarter of this year....

[yasrub] 05/7/2017 08:27

Summer sale finished ?

[deltrotter] 05/7/2017 08:26

Depends what your timeframe is I guess Lauders. This is a share to be bought and held.

The news today was great - really puts into perspective the prospects here. Continued cash generation from exiting assets, increases in the near term (6 months) from SD, and then the excitement of long term huge uplift if they get access to the oil at SD.

I bang on about it, but I can't find a better term than to say this is a "cracking little company".

[muffster] 05/7/2017 08:25

Selling seems to have stopped, should rise on this news topped up

[lauders] 05/7/2017 08:24

Murphy's Law solsauce. I bought first thing at the "top" of the day's pricing so far and am down already. Typical! I should have waited but looked too good to wait. Long term I am not fussed but quite extraordinary price action. Wait for Malcy to talk and then we should get a kick up I hope!

[the drewster] 05/7/2017 08:21

"The market can stay irrational longer than you can stay solvent" (W. Buffet I believe)

[shakeypremis] 05/7/2017 08:14

Sellers gonna sell. They could take this sub 50. I might have to sell something else if that happens and throw the kitchen sink at this. Christ the market is irrational.

[deltrotter] 05/7/2017 08:12

Just traders booking profit IMO... this should really move forward now.

[soulsauce] 05/7/2017 08:08

Lauders looks like you will be able to get them cheaper, go figure!!

[deltrotter] 05/7/2017 08:05

Brasso3 - absolutely agree. Long term security with that increase in reserves.

Of course I expect those figures will grow substantially as well at SD and also be added to significantly in Morocco over the next 6-9 months....

[soulsauce] 05/7/2017 08:04

Del thanks for that, very interesting.

[deltrotter] 05/7/2017 07:58

I spoke to PW the other day. He would not talk about SD other than to say that he was excited by it and its potential.

What he did talk about was the fact that he felt he needed to get the story out about Morocco and the impact that will have on the company. He said the fact that they now controlled the whole basin (with the latest licence win) was a HUGE strategic asset that was in some ways completely ignored by the market because of the focus on SD.

[brasso3] 05/7/2017 07:57

The negative for me on SDX was always the low P2 reserves against the relatively high production level (4500 BOPD).

Todays RNS removes that negative. P2 reserves will start to look very significant over the next 12 months.

[griffin81] 05/7/2017 07:55

Solid update today, which shows just how busy the team at SDX has been over H1. Positive CPR and lots of activity planned for H2 which sets up the rerate. The most positive aspect for me however is the statement regarding ongoing search for more acquisitions. PW is hungry to grow, and grow fast. H2 is going to be an exciting time in the SDX journey. I'm very pleased with today's update.