Member Info for shakeypremis

Indeed. That's why I said what I said. I just started reading at that point and haven't had time to finish.

Yes West Gharib production increase would change the picture here a bit but for how long and do management waste it all again?

Their rosy predictions of oodles of free cash flow for 2022 and 2023 are now gone. 2022 free cash flow drops to US$3m and 2023 drops to US$13m (not read the report enough to know whether that includes impact of West Gharib drills - I guess it wouldn't given they haven't been drilled yet).

This is what the market doesn't like in my opinion. This company just somehow ends up spending all of the operating cash flow while simultaneously reducing production and reserves and thus you are left with stale/reducing cash balancing, lower reserves and less valuable business that is running itself in to the ground.

The management must go now. They absolutely have to. Buy back is also a stupid idea. Dividends or invest that cash in to inorganic growth in a last ditch effort to increase production.

Agree with you there LuckCounts, West Gharib should put a floor under this once it is actually producing at that rate. Obviously that assumes successes in the wells. They have proved highly successful over the years so hopefully they'll all come in on prognosis. Not sure how long a life these types of small wells have though.

I really think the buyback is wasted money. They are experienced in working over old and depleting fields, they should try to buy another with the cash, of course this would have been easier in 2020.... They also probably shouldn't have got rid of NW Gemsa. Bet whoever owns that now is making a tidy sum on it.

I wait to see what the management team have planned in Morocco and Egypt regarding new opportunities because they've said similar before on multiple occasions and nothing happens.

34adsaddsa, gas price is not set by Moroccan government (in Egypt it is). Market pricing for the gas and yes SDX sell the gas for a lot less than the bottled (or at least they did). Hard to imagine with the shortfall in natural gas experienced by Europe/Asia recently that bottled gas in Morocco has gone down in price as it is all imported I think.

Bottled gas maybe? To me it seemed SDX wouldn't sign it, not the customer. The RNS says the Company (as in SDX). So it can only be the customer wouldn't pay what SDX want. Perhaps they have some reasoning to believe they can sell the gas for higher prices in the near future?

I really don't want to see a buyback. I'd rather see a dividend distribution so we actually get something or for them to invest the cash in inorganic growth. You don't do a buyback when your company doesn't really have much of a future and you are wasting so much capital on CAPEX while reducing production every year. Any temporary uplift in share price will just be eroded away if this strategy and negative production growth continues.

It is probably that. They wouldn't do a buy back if they were really struggling for cash. It's not good but I understand why they are doing it I suppose. Currently SD is in terminal decline with these ****e targets, even if they come in, only slightly prolonging that death spiral of the asset. Sure they might find some more targets to go for but right now they really have nothing of substance.

SD 2022 entitlement production guidance down nearly 50%, Morocco 2022 entitlement production guidance down around 33% and West Gharib flat with CAPEX guidance only down 20% or so this must produce negative FCF this year. IF they can resign that Moroccan customer at the same rates (hopefully higher) then the picture might be different.

Selling it now reduces the operating cashfow this year from SD by probably not that much less than they got for selling it. What are they doing???

Why would you sell 33% of SD? Is it because they don't have as much income from Morocco? I cannot fathom what this management team are up to? Are they just trying to keep the lights on and keep getting paid US$1m between them plus highly dubious 'management consultancy fees' for as long as possible?

Yup, and today's RNS further strengthens that view. Another year of probably zero cash added to the balance sheet (likely negative FCF) and falling production.

I can't see how revenue could be higher this year, it must be lower. No way, particularly with the well priced Morocco gas production being down too.

Perhaps the reason they don't want to renew the customer in Morocco is not because of gas supply concerns but because they are concerned about the price they might receive? They are always drilling for gas in Morocco to supply customers because they always need to to fulfil contracts. So, perhaps they either think the gas price they will get for resigning is going to be lower than previous? Or they expect gas prices to rise and want to wait to cash in?

Does the guidance include the West Gharib/Meseda drilling? I suppose it wouldn't as they don't know what the production will be from those wells (assuming success). So hopefully end of year actual production would be a bit better than guidance.

These guys really screwed up with thinking their crappy fixed price gas businesses with low reserves and high F&D costs were better than buying up some distressed oil asset on the cheap during the oil price crash to 0 when coronavirus hit. They actually said this, it beggars belief. Look at oil now, they said oil was legacy or something similar. That just proves they shouldn't be running an oil and gas business.

They've also basically admitted they don't have much gas left in Morocco because they can't extend the contract of a customer for 5 years and thus take a big revenue hit. This management team is putting this company in to a death spiral.

How innovative a project can you acquire in Egypt for US$2m? It can't be that good surely? Presumably it would be worse than 33% of SD given that was only valued at US$5.5m.

No word on their secret Moroccan projects. Do they still exist or is it like has happened before when Reid said in a call they were investigating some growth opportunities that never materialised. What growth projects can you have when you don't have the gas to supply your current customers! It would have to be something that doesn't involve their gas, perhaps the pipeline? Or just another pipe dream from a management team that has run out of steam and ideas.

I think this buyback is pointless. Just how much is it going to be able to buy for US$2m???

I am strongly considering exiting here. I don't see a future for this company at the moment.

Free cash flow is what the market wants to see and they've just announced that free cash flow is probably going to be negative again for this year when there was supposed to be a big build on the balance sheet this year (according to analysts). Given the much reduced guidance and them spending over US$20m on CAPEX (AGAIN!!!) I don't see how this produces free cash flow this year.

This is not really a good news day. Just an announcement of starting drilling of a small well which was expected which has yet to be proven successful. There was news in there regarding the first well in the campaign which has been connected and ramping up to full production levels. Meseda drilling program itself isn't going to move the needle, certainly not until cash flows start to hit the balance sheet. If these guys **** up elsewhere then we'll probably trade sideways or down. We need to hear about what they are planning in Morocco (if indeed there is still anything cooking).

I think that's what we are all waiting to see. The trading update which is overdue at the moment. We all want to see cash build on the balance sheet.

It's not the ultimate ****co because it actually has very profitable operations but by God is the stock a dog.

Yes, it's because people buy this stock much less than they want to sell it. That's why.

Only matters when it is NT to sell. Then it goes down. When it is NT to buy it usually won't go up.

Yes it is David Newlands shaving down his spreadbet that has not performed well lol. He hasn't sold any shares though.