Member Info for shakeypremis

I don't really know why free cash flow is negative in 2023 given production drop-off. It can only be SD production decline that they are modelling and it won't be producing nothing either. Something I need to dig in to further.

That same BNP report says that production drops dramatically in 2023 and that cash at YE2022 is only US$20m and that there will be negative free cash flow again in 2023. Now if Morocco production picks up further, gas price continues to rise there and those drills in SD come in next year then that picture should change... for another year or two (depending on what wells are successful - if any - in SD).

With the exception of perhaps Mohsen I should say. CoS for this prospect has been revised down from 51% to 46% I note however. More good news.

I think they need to quickly acquire adjacent licenses in SD and survey them. The current targets in SD are just pathetic, they aren't nearly big enough and certain enough to bother drilling. Just give up on them, analyse the sands hit in the Hanut drill and see what comes up and get some more acreage if it can be done cheaply and try to find some gas there before it is too late and they can't fund the CAPEX.

Morocco does pay for it's own CAPEX, just, and they aren't in danger of declining production there in the next couple of years so I guess that can keep ticking over as can the Egyptian oil assets.

We just have to wait and see if there is a change in strategy here or management change. If current management gets to keep doing what it's been doing for the past few years (spending all free cash flow and more on CAPEX - as indicated by declining cash balance) and not adding reserves above production with drilling then I see no reason that this won't keep falling.

Analysts are predicting cash added to the balance sheet by YE2022 but SDX have just announced they are drilling more wells than they drilled this year!

To be honest I really don't know what they can do. They've worked themselves in to such a bad position that they are screwed if they drill and don't come up with the goods and screwed if they don't drill - although at least some cash would be added to the balance sheet but that would come at the cost of the company's future as they'd run out of gas and then be only left with cash approximately equal to the current market cap.

With such a bleak outlook, management is incentivised to not take much risk and simply try to keep their jobs for as long as possible until the writing is nearly on the wall, at which point they might start taking bigger risks.

Or Waha are just done with SDX. Not saying that is the case.

If anyone here wants management contact information, please PM me if possible. I won't hand it out on here as that is not cricket.

I love how they still say they aim to become a mid-cap. Great, but how? There's no way you can do it given current 'plans'.

It's just that one of the management team had the cheek to tell me over email that they were looking at growing production in West Gharib. Nothing of the sort. Really irked me. Charlatans. It's certainly worth doing but just the way he put it.

So now it's maybe 3 wells in SD, 6 in Morocco and the Meseda wells which will apparently grow production from 2700 to 3000 barrels per day but over the course of several years and result in a 50 barrel per day increase in entitlement production. These guys are are a joke. They are sound like they might now spend all or most of 2022 operating cash flow on drilling. If this round of drilling in Egypt is unsuccessful, 2022 will be the last year they can do the same kind of work programme again.

They've got no other strategy. Someone needs to reel them in now before they get the chance to waste any more money.

Mohsen chance of success is now down to 46% from 51% too.

34adsaddsa, Morocco does generate free-cash flow, even after the massive drilling CAPEX and they do have a lot (if very small prospects to go after) so I guess that business should remain and continue to try to add small reserves above production and increase customer volumes if possible. There's also the Top Nappe there that might prove up something in future.

Meseda, yes, as you say obvious, continue and try to grow reserves and production.

South Disouq, I just don't think the current targets (apart from Mohsen) really justify drilling, I think SDX said that a well had to have 10bcf to be worth going after and given the CoS on most of those wells I think they are really scraping the barrel there. They just don't have anything of any substance to go for there. Perhaps they'll find some more targets to go after, they seem to come up with targets periodically and the Qawasim sands as they mentioned they are investigating that horizon in the recent results RNS.

That's why I said Hanut was make or break and look where we are now.

A buy back is a stupid idea. They need that money to try to turn things around here.

How about a counter argument? Something useful and meaningful? Tell me how this company doesn't start to experience production declines in SD from 2023 without Mohsen success and at the current rate of drilling (2 per year??) and company stated chance of success if that is even a likely scenario?

At this point I think Morocco might actually be the better asset, at least they are able to keep finding new reserves there and replace produced reserves without too much issue, yes it costs a lot of money but it does show a return on investment. Right now SD drills are starting to fail more often and remaining prospectivity is small and requires a lot of time and drilling to prove up. Without success in the drills next year SD will start experience production decline from 2023.

This management team doesn't appear to have it in them. It's simply more of the same at the moment. This company needs a new direction and a kick up the back side immediately.

Don't blame you. I am going to hold because some one with some vision and balls can do something here with the free cash flow. I expect the board (those with a stake in the company at least) and major shareholders must start kicking off now, it's gone too far and for too long now.

The wells they are drilling in 2022 must be significantly cheaper than this years because they want to drill 4 wells in Morocco and 2 in South Disouq next year. I'm not convinced they will have US$34m in cash by YE 2022 or shortly thereafter. There will also be other CAPEX going on, not just Morocco and SD drilling.

Exane BNP forecast YE 2022 cash of US$20M. Some significant discrepancy there between the two forecasts. I hope PH are right. US$34M could fund some half decent acquisitions. Sdx would need a lot more cash to payout anything meaningful to shareholders. US$34m would pay out only 12p share.

We don't really want the company wound down either. We'll get nothing more than the current share price even if they managed to get US$34m in cash together (which they most likely won't).

Half of the board also own no stock so they are not incentivised to advocate risk and instead prolong their tenure and keep collecting their cheques. Two members of the board do have at least some semi-significant positions in SDX however;

Michael Doyle
Independent Non-Executive Chairman
Tenure 5.83yrs
Compensation: US$89.77k
Shareholding: 1.06%

David John Mitchell
Independent Non-Executive Director
Tenure 5.83yrs
Compensation US$57.71k
Shareholding 0.88%