Member Info for shakeypremis

They look to have found about 1.5bcf recoverable so far with these three wells (although it's not certain they would in the end produce this much, they may also produce more, but that's probably less likely than producing less). 1.5bcf is about enough for 176 days production (assuming no waste - again unlikely) at the current rate of 8.5mmcf/d. So they need to discover at least another 1.5bcf with remaining wells to at the very least replace produced reserves for this year. Seems they may well once again show falling reserves in Morocco after 2021 reserves report. 1.5bcf produced equates to about $10.5m net to SDX after OPEX costs of $1/mcf and government cut of 25% of production. Morocco CAPEX budget for 2021 is $14m so if they do discover enough additional gas to replace produced reserves with the remaining drills then they should also show a return on investment on the CAPEX. Not a very big one mind you but at least not negative. This all goes to show the fly by night nature of their Moroccan venture in its current state. It's very vulnerable to a bad drilling programme and probably why they can't get more customers. Sdx don't have the gas to attract new customers if you ask me.

That's what they do in Morocco. Release the results of the programme in one go.

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.

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.

Longer reserve life and cheaper, bigger wells in Morocco too.

I think they are going to have to show longer reserves life in both Morocco and Egypt. Particularly Morocco. This will only come from exploration success and won't come in Morocco this year now.

You can find this here;

https://sedar.com/FindCompanyDocuments.do

Just search for SDX Energy and list by date of filing. Looking for reason to not vote for some of the resolutions. Doesn't look like there is anything like remuneration increases or share options for underperforming directors though.

I think you might be overestimating the importance of SDX to Waha. If Menhali was ousted by them (he may be leaving of his own volition), it's highly unlikely to be solely because of SDX's performance (or lack thereof). Just take a look at their website, they do a whole load of other things.

"The Company's preference had been to welcome shareholders in person to our 2021 AGM, particularly given the constraints we faced in 2020 due to the COVID-19 pandemic. However, the UK Government's current guidance as at the date of publication of this document regarding social distancing and the prohibition of public gatherings due to the continued COVID-19 pandemic remain in place. We are therefore proposing to hold the AGM with the minimum attendance required to form a quorum."

They are probably using covid as an excuse to stop disgruntled shareholders turning up and heckling Reid and Box about the poor performance of the share price and the high-spend, low return in Morocco.

"Following his departure from Waha Capital, Mr. Amr Al Menhali will not be putting himself forward for re-election as a director of the Company at the AGM and so will retire at the AGM."

Phew, I thought for a second that he was just leaving the board, possibly before they dumped their stake. Not the case, he's leaving Waha. Being kicked out again like the last guy or just leaving of own volition? Either way, there could still be a decision incoming on whether Waha continue to hold SDX stock. God help us is they decide to exit.

They need to discover over 2.2bcf of recoverable reserves this year to make the Morocco CAPEX worthwhile (even including workovers) and not just drilling) as a produced bcf is about US$7.5m in revenue after OPEX and government cut (25%).

They are *currently* producing at a rate that will total about 3bcf this year. That will yield about US$22M after OPEX and government cut (25%). So Morocco production is hopefully going to more than pay for this year's CAPEX. But they need to discover more than 3bcf recoverable to replace produced reserves. That's the main issue here. Actually drilling enough gas to replace produced reserves. New customers are not going to come if SDX only have a few years of gas for CURRENT customers. Of course drilling failures are going to happen and the small reserves drilled don't leave much margin for error.

I admit the above is a simplistic analysis but I think it demonstrates the basic economics of drilling in Morocco.

That's why they need to drill. To continue to supply their customers. You have to remember to account for produced reserves when accounting for year end net reserves increased by drilling (or not increased as the case may be). Morocco is worth exploring and drilling. The gas price is so high that if they *can* find bigger wells and cheaper wells it will be very lucrative.

SDX are not going to be able to negotiate the with the Government in Egypt regarding the gas price received. The price is the price. The only way they might be able to get a better price is by producing significantly more. There are also costs involved with producing more, they have to pay the Government something to be allowed to produce more as I understand it.

It's all very annoying and slow and yes, soul destroying, but I don't think you realise just how much gas in Morocco is worth. A 1bcf find (assuming all of it is produced which is of course unrealistic, but this is just for illustrative purposes) is worth about US$7.5M in revenue after OPEX and government cut of 75%. So to cover this year's Morocco CAPEX (which isn't all related to drilling - there are workovers too) SDX need to find about 2.2bcf of recoverable reserves. The first three wells are targeting 1.6bcf recoverable on P90 basis. The second set of wells hopefully will make up that difference and then some more because at the current production rate of 8.3mmcf/day SDX are producing around 3bcf per year. They need to show growing reserves above production in order to get more customers if you ask me. Significantly above. Security of supply. Furthermore, 3bcf produced is around about US$22M in revenue to SDX after OPEX and government cut.

The Oil Walrus (Malcy) is just a paid mouthpiece. He ramped SDX while Squelch was being economical with the truth and overpromising. I remember being derided on this board when being negative about El Squelcho and his timelines and promises.

When someone sells there is a buyer on the other side. Jeez. At worst it's the market maker. You can't buy or sell shares from or into the ether, they've got to come from or go somewhere.

Shares transferring from small, impatient hands to a bigger fish here. As always is the case;

20-May-21 11:27:33 16.40 750,000 Buy* 16.00 16.50 123.00k

Equity destruction is best performed by diluting your shareholders to fund exploration etc. SDX don't do that do they. It's all from cashflow.

Get out of here. This is O&G exploration. That's how it works, i.e. it doesn't always yield economic outcomes, certainly not immediately. The Top Nappe has been further derisked, it's just the reservoir in the Lalla Mimouna Nord concession doesn't have the permeability to be worth testing as economic production levels would be unlikely. The Top Nappe extends throughout SDX's concessions and they just confirmed there is a working petroleum system feeding it. They now need to find somewhere else where they can test it. Some of the other drills planned in 2022 might be drilled deeper than planned now to test it.

If Hanut does not come in it's going to be a crappy year here.

... at least for now, and with it most likely any chance of attracting extra customers because they can't ensure that they'll be able to supply gas to them for more than a few years;

" - Post-period end, the Company received the COVID-19 delayed laboratory analysis of the cuttings and side wall cores from the LMS-2 well. This information confirmed that LMS-2 had successfully encountered the targeted thermogenically-sourced gas in the Top Nappe horizon but that the reservoir in the Lalla Mimouna Nord concession has low permeability and the well is unlikely to flow conventionally. As such, the Company will not risk US$0.5 million testing this well, nor will it commit to further investment in the Lalla Mimouna Nord concession post the end of the concession date in July 2021 as a result of the low permeability in this concession and limited likelihood of it being commercially developed. Accordingly, the Company expects to recognise a US$10.2 million non-cash impairment charge in Q2 ahead of relinquishment, of which US$2.8 million relates to LMS-2.

· As the analysis of LMS-2 has confirmed that a working thermogenic petroleum system exists and feeds the Top Nappe horizon, which exists throughout the Company's acreage, work will continue to identify drillable prospects at this horizon, with the objective of potentially testing the Top Nappe in drilling planned for 2022/23."

That said, the prospect is a goer and extends throughout SDX's acreage, it's just not going to be producible from the Lalla Mimouna Nord concession. They are going to let the concession go. So the wait for cheaper resources in Morocoo goes on! Not until next year at the earliest.

R&M haven't reduced according Morningstar. Look at the top two holdings under Major/Funds:

River and Mercantile UK Micro Cap Ord 7.3%
ES R&M UK Equity Smaller Coms Fd B Acc 1.91%

That adds to 9.21%

Yes., to be taken with a pinch of salt of course.