Sdx Energy Share Discussion Threads

[shakeypremis] 11/3/2020 10:33

Matchmade

I agree the share price here doesn't generally make any sense. But that's where an irrational market gives you great opportunities (if you're patient). I appreciate people have different time horizons. I am 32 and can wait and have been invested here since 2017, slowly increasing my holding. Yes, heavily underwater but the current price is very tempting. Although I want to see further drilling success at SD first and I hope that SDX don't try to acquire something with a placing at the current low market cap.

The share structure is heavily waited to a few large holdings, namely Waha Capital's holding through their investment vehicle SDX SPV Ltd. They haven't sold a single share in years (over ever) and hold nearly 20% of the company. Similarly with Ingalls and Synder who nearly 19% and haven't sold a single share in years (or ever in fact). The low free float here allows for wild price swings, usually to the downside but smarter money is slowly buying up all the stock.

Most of the Egypt CAPEX money wasn't actually spent on drilling but on SD CPF and associated infrastructure CAPEX.

A lot of the best opportunities do take many years to be realised by the market. I do think that if SDX don't find more gas in Egypt with the next few drills then they have a little bit of a problem there going forward.

SDX are drilling in Morocco to increase their reserves and increase certainty of supply for their customers and potential new customers. If you've only got reserves for a year or two then potential customers may be put off. If you can say we've got your gas for 5 years and we expect to find more then that's much better. The gas they find is worth US$12/mcf. It's a cash-cow in terms of margains. Yes more customers would be better but if you can find the gas then that in itself does increase your NAV and also gives you options for the future. Maybe a bottling facility. Who knows. There is huge demand for gas in Morocco.

PW really did smash the share price. His lies and over-exaggerations really hurt the investment here but didn't really change anything fundamentally. He walked the plank along with Waha's then CEO who was on the board of SDX. I personally believe they both mislead Waha - who I believe really control the company along with Ingalls (I don't know the entity behind the Ingalls holding) - and they both got the boot. Waha seem to be in this for the long haul and their current CEO on the board of SDX now.

The company are project to have US$40m in cash end of 2021 and given the current malaise in the O&G market - which I believe will continue and get worse - as a debt free company generating significant free cashflow, SDX are very well placed to capitalise and pick up a great asset or two or farm in to something on the cheap. Patience grasshopppers, patience. This is a great O&G company to have an investment in at this time in history.

[matchmade] 10/3/2020 10:45

I used to be invested in SDX but I have sold up because I've concluded there is simply no logic to its share price. I could do a month of detailed analysis to convince myself there is value in the share, and I could wait 3, 4 or 5 years for that value to be discovered by the market, and I've found I was just wasting my time and killing my capital.

This share doesn't behave like any "normal" stock where improved profits lead to an improved share price, or a probable quick-to-market new discovery can clearly be seen to feed through to the bottom line because there is strong demand for the product. Even if you ignore oil and gas discoveries, at the very minimum you would expect that the market valuation was at least the same as the value of assets plus probable forward-looking earnings for, say, a year, less debt and estimated asset depreciation and the cost of a drilling programme. But if you do the calculations, this bears no relation at all to the actual share price. SDX does look massively undervalued, but very few major investors are interested in small O&G companies nowadays, so the share price seems to me to just follow the adrenaline rushes of small private investors, while the MMs cream off fat profits on the very wide bid/offer spread.

The rot really set in with the over-promising by Paul Welch: developing the Egyptian gas took far, far too long, and there simply hasn't proved to be a sufficient market in Morocco for natural gas. You can throw money down drill holes and find lots of small, quickly-used-up gas fields until the cows come home, but even with the high prices on offer, you can't build a business if there aren't enough commercial customers or any domestic gas distribution network to speak of. Why is SDX even drilling in Morocco at the moment, when there are so few customers? Why is it doing expensive drilling in Egypt, when the price on offer from the Egyptian Government is so low, the taxes so high, and it takes so long to deliver the necessary infrastructure? It is generating good income, but low profits because most of the income is spent on new drilling rather than, say, buying real existing assets that could both generate income and offer scope for expansion.

[shakeypremis] 10/3/2020 09:49

Indeed it is, my buy finger is getting very itchy!

[brasso3] 10/3/2020 09:14

We make the bulk of our money from Moroccan gas at $12/ mcf.

SDX is very cheap at these prices.

[shakeypremis] 10/3/2020 09:13

Approximately 60 barrels of oil per day will be the entitlement production net to SDX. Adds around US$400,000/year in profit before tax. Obviously with an assumed decline rate of 30%/year it quickly diminishes.

[oapknob1] 10/3/2020 07:22

Nice update. Just need the POO to recover. Be interesting to see the share price reaction.

[shakeypremis] 09/3/2020 17:39

Market crash. Everything goes down.

[dado90] 09/3/2020 17:32

the value of cash+PP&E-all liabs (so ignoring all exploration and evaluation assets)is quite at bit higher than current share price... i am not sure why it's trading at such a large discount.

[shakeypremis] 09/3/2020 16:11

Considering today saw the lowest share price in the company's history and the current price is barely above that ATL, I have absolutely no idea. It basically can't go bankrupt and therefore can't really go to zero, as it has no debt and no liabilities it can't pay from cashflow, BUT that doesn't mean the share price can't go a heck of a lot lower.

[wayhay] 09/3/2020 14:26

Where do you think it may go to Shakey ?

[shakeypremis] 09/3/2020 09:39

don't think it's bottomed yet

[momentum1] 09/3/2020 08:16

Genius move switching to gas last year. Buy the dip

[kaos3] 06/3/2020 16:35

I am serching for the bottom of the bottom

[haywards26] 04/3/2020 12:24

The news appears more negative than positive to me...Not the success that was hoped for or perhaps expected at Salah (South Disouq) which I believe had a larger potential than the Morocco success that was announced alongside.

[value viper] 04/3/2020 11:28

You can sell at 18.51 and buy at 18.5 at this moment !?!

[oapknob1] 04/3/2020 08:28

Could be exciting times ahead.

[wisecat2] 01/3/2020 10:20

Some of us are only now slowly returning as shareholders. It's all about management regaining trust after previous leadership.

[shakeypremis] 29/2/2020 19:06

Despite the decimation, no chatter on the boards. Has everyone who held SDX died from the coronavirus?

Seriously though, I think the lack of posts - even given the absolute carnage - is absolutely indicative that this stock is not held by the average AIM punter.

[oilinvestoral] 28/2/2020 06:41

Shakey they are on take or pay contracts! They are fixed price contracts ! It matters not what demand in Morocco or Egypt

[shakeypremis] 27/2/2020 11:55

Coronavirus impact on oil is dragging this down. Not a huge impact to SDX's revenues as they produce majority gas now. Although if they lose demand for gas in Morocco/Egypt or have troubles with payment that would be a valid cause for a drop in the share price. But that hasn't happened yet.

[kaos3] 27/2/2020 11:41

would never think share price going this low