Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I had a soft spot for Squelch. Thought he got a hard time. I actually met him once or twice. Seemed a decent fellow.
The new CFO, Boxy, is the worst type of oil exec - an accountant who focuses on how many beans are in his jar, not how many beans could be in his jar.
There is a difference between what companies put in press releases and what Reserve Engineers book as Proved and Probable (2P) Reserves....not saying that SDX mgmt was misleading in saying that Sobhi was a 24 BCF discovery....that could very well be what they really think they discovered. But that's not what the Independent Reserve Engineers booked in 2020 given the limited production history from one well. And F&D costs are based on booked reserves.
Goldie, my maths is from line 3 of the Reserve table on p.23 of the 2020 Annual Report:
Reserve Discoveries 2.43 MMBOE
https://wp-sdxenergy-2020.s3.eu-west-2.amazonaws.com/media/2021/03/18213921/SDX-Energy_2020_AR.pdf
Do your homework before you post....
Tigris your maths are a little off. Sobhi was 24bcf i believe which is 100% owned and is therefore 4mmboe on its own. This doesnt include morroco.
I think you both have fair points, but the time for buybacks isnt until south dissouq is in later life and morrocco doesnt deserve further investment.
I do however believe if morroco doesnt deliver in this campaign and egypt does they need to start to scale the spending back and focus on south dissouq.
Morrocco needs bigger fields from single wells, 4bcf+ per well to be financially worth it in future.
At this stage of SDX's development, there must be a better use for it. Such as acquiring some more assets (maybe advanced development stage/producing) from companies looking to offload some oil assets like BP etc , acreage around South Disouq. It makes sense as you say below to buyback shares but I just think SDX's current reserves are too small to spend that cash on buybacks right now. It jeopardises the company's future in my view. If future exploration success and reserve life addition could be assured (which it obviously can't be) then yeah, sure, buy back as much stock as you can right now at the lowest prices. Obviously it doesn't work like that.
Shakey. you raise a valid question and the answer lies in the F&D costs. Our 2P Reserves are 11.1 MMBOE or 66.7 BCFE. Our market cap is US $45 million and Enterprise Value is $35 million. So our EV /BOE of reserves is US $3.15 ( 52 c / MCFE). Last year we spent about $25 million and discovered 2.4 MMBOE so our finding costs were about $10/BOE. (They were much higher than $10 in Morocco and lower in Egypt but we know about the higher prices in Morocco) . So if it cost you $10 to find the stuff but you can buy it for $3.15 with no risk why wouldn't you do that all day long? Why wouldn't you at least take 20% of your CF and do it and drill your best prospects with the other 80%? Especially if buying back stock would increase your SP and make it more attractive to use your stock as currency for potential acquisitions? I am all for drilling Hanut and the other SD prospects. But unless we can reduce our F&D costs in Morocco, I would take some of that cash starting in 2022 and initiate a buyback program as long as the stock trades at such a big discount to NAV. Of course we all hope Hanut will be a discovery and that the SP will more than reflect the value but we have to have a backup plan in case it doesn't.
Why on earth would it be a good idea to buybacks here? They have limited reserve life left in assets and money is best spent on discovering more reserves. If they spend money on buybacks and don't discover enough reserves then just what good does a lower share count do when they run out of reserves? You aren't going to get a dividend and the company won't be worth anything.
The rig is now under contract to PRD and getting ready to to drill the MOU-1 well in the next few days, should be exciting for PRD, news re SDX spud is due in July.
The first Moroccan well OYF-3, spud at the end of April. How is the drill going, anyone know?
Any feedback at all?