focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
This discussion on SOU highlights to me how SDX is different from others E&P companies on AIM. We're not chancing big resources in the hope of a liquidity event at the end. We're discovering gas/oil, putting it quickly into production and banking the profits. SOU may well prove up the big resources they're targeting (and best of luck to them) but the SDX model reflects the level of risk I'm more confident with and I'm happy to continue topping up if the SP flexes up or down as I believe in the strategy PW is following. GLA (even SOU investors as we're all here to make a few quid)
Q1 results will look like small change when the additional production from SD and Morocco are reflect in the Q1 2019 results. All coming together nicely with increased production and higher oil prices. Also sounds like PW is itching to pick up some additional assets. IMO
The flow test results for IY should be due within the next 2 weeks. The company expects IY will "significantly exceed 25.8 MMscfd achieved @SD-1X". SD production to start from SD-1X + IY @ 50MMscfd, so with what they achieve from Kelvin and the x2 additional planned wells they should be able to take production up to 100MMscfd by year end. That should generate some serious FCF. Question for PW would be the gas sales price.
The 2018 work programme to date has delivered its targets already with 3 drills remaining in SD to go. We look like being able to ramp up production to x2 by year end with what we have now, any further success I feel takes us towards the x4 target. With all the additional revenue being generated will PW be looking now at the next stage of his growth strategy to achieve x4 of current production in 2019. Clearly there's plenty of running room in both SD and Morocco but I also feel he'll want to close a deal towards the end of this year to add further growth potential. IMO
This is a broker note on SQZ but the intro on the coverage could just as easily be written for SDX https://mobile.twitter.com/Neurochasm/status/990901357879218177/photo/1
This is a significant work programme PW is overseeing and it must take a lot of effort to sort all the detail out of rig contracts, approvals, access, etc. From a management point of view it's Plan - Do - Review, so I'm sure we will have plenty of time for analysis of results after they've delivered all the projects.
I think PW is very much on track with turning SDX into a $1b company. With SD having TCF potential and morocco offering the chance for significant profits if we can achieve the 24mmcf target. They seem confident of hitting the increased 8000booe/d year end target which to me is the reason they've brought forward Kelvin to start proving up the SD reserves. IMO
Looks like the Peugeot factory in Kenitra may need our gas sooner than we thought... "Kenitra was supposed to be operational by 2020, with an annual output of roughly 200,000 cars. However, at yesterday�s press conference, the Minister of Industry, Investment, and Commerce, Moulay Hafid Elalamy, announced that the Kenitra plant will be operational in 2018" https://www.moroccoworldnews.com/2018/04/243901/psa-morocco-car/ Hopefully we can fast track production from the recent LNB-1 Gas discovery and sign Peugeot up to the 10 year contract at the improved $12/Mcf rate. If we can ramp up production to the 24mcf capacity of the export pipe we'll be generating huge profits from morocco, tax free for 10 years.