The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Many thanks all. Most appreciated.
yes, they said M&A was a real possibility, but no further clues
Great post this . Did they hint at any M&A ? Could be a good time to pick up some cheap assets perhaps . Rather spend on this then dividends yet . Need more growth before buy backs etc in my opinion
indicated that share buy back or dividends unlikely in next 18 months at least, in this timeframe cash can be put to better use in other value-adding ways in their view.
So nothing about share buy back ?
Frustrating, so much potential in Morocco but limited demand. That Euopean gas pipeline really needs to be built that some on here were suggesting a while ago. Anyone know of any updates on that?
I am not confident that any plan to sell more gas in Morocco outside of the pipeline is going to be announced and certainly not come to fruition any time soon based on the way Mark Reid answered the question.
Thanks Shakey very helpful, they really need to get a move on with finding extra demand for Morocco we have had this issue fora while now. Their last response was they were waiting for more customers to build their own factories at that big business park where Peugeot is manufacturing can't remember the name of it now.
I've recorded the call if anyone wants to listen. The first set of questions that are answered are from myself but they weren't recorded. I've included them below so you know what he is answering;
Q1. Will/is SDX consider/ing alternative methods to increase sales in Morocco such as selling gas in to the large bottled gas market? For example by building their own bottling facility or selling gas to others who would bottle it for sale. Failing options like the aforementioned, how is SDX going to increase sales in Morocco?
A1 (summarised) - Yes, they are looking at alternative methods to sell the gas they have outside of their pipeline. They think the least likely option is selling in to the bottled gas market but did say there were other options available. Didn't say what they were.
Q2. Will SDX look to reacquire the recently relinquished disposed of Southern area of the South Disouq concession? If not, why not?
A2 (summarised) - No one has taken the concession yet and SDX will continue to evaluate whether they think it is worth re-entering.
Q3. Can you offer any comment on why your partner IPR in South Disouq declined to participate in the recent successful drill at Sobhi? Will they be participating in any future drills? How will you drill Young without them? Is there scope to get another partner if IPR no longer participate in any more drills?
A3 (summarised) - partner is not financially distressed, held a different view to SDX on Sobhi and thought it was very similar or similar enough to failed Salah prospect so elected to not participate. Think we can assume they will participate in further drilling and may well elect to back-in to Sobhi.
https://u.pcloud.link/publink/show?code=XZH596kZujrpGehMbIViG5bf1vzbG5Iw9RwX
Did they speak of any plans to increase Moroccan demand or bottling of gas? Any update on existing customers and their usage for May?
Remember that NPV8 at currently realistic oil prices doesn't include the latest successful wells in Morocco and Egypt. What the NPV would be if they were included I don't know but certainly it would be higher. Clearly there is a lot of additional potential in both countries for SDX which would make said NPV a lot higher than stated.
yes the comment about the "frothy" valuation was concerning....
There is clearly value here but I'll have to bring my average down a fair bit more if I want to make a profit from this share ... Unless the news in September is signifnactly positive and they also have more success wth the drill bit.
Overall I have confidence in Mark that he knows what he is doing... Hopefully we will at least reach out NPV of 80 £million which is still a fairly sizeable increase to our current market cap
Thanks for your efforts anyway, at least they responded to your own queries to a large degree
Only two sets of questions on the call lol. Think this goes to show there is still very little interest and even awareness of SDX. This in itself is actually quite positive for the potential share price gains in the future. If more become aware of SDX and the value proposition the share price will increase although could easily get 'frothy' again.
Significant production and revenue growth QoQ
Free cash flow from fixed-price gas contract
Strong balance sheet with robust liquidity
Resilient, gas-weighted portfolio, with low operating costs
Growth opportunities in current environment
Positive outlook for remainder of 2020 as resilient portfolio continues to generate cash allowing optionality to grow business both organically and through M&A
Shares at 20.0p/sh trade at an operating cash flow (2019) multiple of 2.0x
so far - Sobhi geometrics and similarties to potentially 5 other drills which they anticipate could add up to 70 BCF of gas : )
new presentation : https://s3-eu-west-2.amazonaws.com/wp-sdxenergy-2020/media/2020/06/03083627/SDX-June-retail-investor-presentation.pdf
Unfortunately cannot dial in to the call due to work commitments.
If there is anything of noteworthy interest, would really appreciate if it could be posted up here.
Many thanks all
Will