Member Info for 34adsaddsa

I think just lower inflation and lower interest rate expectations. That means private equity is likely to be more successful, and the dividend yield on offer here just looks too high.

I know, that's why i wrote "oil/gas prices aren't high but they're not low enough to have the EPL removed".

!?!?!?

At the moment they're in quite an unfortunate position because oil/gas prices aren't high but they're not low enough to have the EPL removed. I'm guessing they'd be better off with $70 oil and no EPL. I said a long time ago that UK political culture had made the UK NS uninvestable and sadly I don't think that narrative is going to change.

Can see some people blaming the SFO.

Why bother when you could buy it out of bankruptcy for cents on the $?

Imagine if they'd just announced a rights issue at 80p.

It's quite common for a company to say they know of no reason for a precipitous share price decline. The shares and bonds being at this level will make it really tough to get new business. If nothing is wrong, the company should make a brief statement saying it knows of no reason for the share price decline and they look forward to making a full announcement in December.

I'm surprised they haven't said anything.

Would you give hundreds of millions or even billions of business to a company with a marketcap of less than £150M and bonds trading at 45c on the dollar?

They're obliged to report short positions over 0.5% of the oustanding shares.

The bonds mature in less than two years and are trading at 45 cents on the dollar. Given that, buying the bonds and shorting the stock seems sensible.

It's up. https://wp-sdxenergy-2020.s3.eu-west-2.amazonaws.com/media/2023/11/SDX-Presentation-Nov-2023.pdf

Where's the presentation? I can't find it on the website.

Perhaps the values need to be halved? I don't know enough about accounting.

They've owned Brentford for yonks. Look at page 56.

https://wp-sdxenergy-2020.s3.eu-west-2.amazonaws.com/media/2023/04/SDX-Energy_2022_ANNUAL-REPORT.pdf

Had a little dig. Liabilities in Egypt are actually quite low. No decommissioning liability at all for West Gharib and $1.7M for SD. The payables are overwhelmingly related to Morocco.

SD valuation and perceived difficulty of getting the receivables are a bigger worry.

A few things which people don't seem to have mentioned:

1. The Company owns a 50% equity interest in Brentford Oil Tools LLC (“Brentford”), an oilfield services business incorporated in Egypt, over which it exercises joint control. I think this stake is worth about $3.5M. If that's sold as part of the deal it'll mean more cash than you're currently calculating.

2. SD is probably worth less than when they sold their previous stake because the reserves will have reduced due to production.

3. The company surely has significant liabilities in Egypt. Whether these liabilities are retained or assumed by the purchaser will have a big impact on the amount of cash received.

The cash position will determine where it goes in the short term, but in the longer term they need a credible plan to do something which actually produces FCF otherwise in few years all that cash will have disappeared in G&A and capex.

It doesn't need to be a leak. It's quite common for companies to sound out major share holders if there needs to be a capital raise.

Cheap/free shares for the boys, what's not to like.