Member Info for Southmead

Of course the AGM is held later this week on Friday.

So it seems we are back to 40%+ in Kenitra against pre-covid consumption levels. I would say that was good after only one week.

"The first quarter of 2020 proved to be a positive period for SDX against the backdrop of a challenging global economic environment. Production has been above expectations and I am pleased that our resilient business continued to generate cash from our oil and gas production as well as discovering new resource through the drill bit in both Morocco and Egypt. Although we are currently living in a dynamic and fast-changing environment, it gives me great reassurance that approximately 90% of the Company's 2020 cash flows are expected to be generated from our fixed-price gas business. Disruption to our business as a result of COVID-19 has so far been minimal, and we are pleased that our three Moroccan customers that were temporarily closed are beginning to take gas again. Our ongoing cash generation and cash position remains strong and we continue to have access to US$7.5 million of additional liquidity through our EBRD credit facility. That said, capital discipline remains our key priority as we continue to navigate the year with necessary caution to our surrounding environment but also with confidence in the ability of our business to produce significant returns in 2020 and to continue to grow thereafter."

Rabat – Morocco marks its third day of reporting no new deaths related to COVID-19, leaving the country’s coronavirus death toll at 188 and the fatality rate at 2.9%. The Ministry of Health last reported deaths related to the pandemic in its morning update on Sunday, May 10. Manufacturing firms are gradually re-opening their activities in Tangier to revive industrial activity and to prepare for the end of the novel coronavirus crisis. Hopefully Kenitra soon.

Secondly, Tigris SDX do not intend to acquire through equity issue but rather ...... 'leverage its strong balance sheet, benefit from early mover advantage and its strong regional networks to grow through the acquisition of suitable high value asset opportunities in North Africa'.
So no worries about a diluted share at this low SP

Tigris, what do you think that your strategy will do for the share price going forward?
Acquisition is part of SDX's declared strategy going forward.
SDX's mission statement says :- 'As a Company, we continue to assess value accretive M&A opportunities in and around North Africa that have the potential to enhance the Company’s production scale and generate value for shareholders'.

There are flow test results outstanding in Morocco which will be of interest. Whether the results will lift the SP is not so certain.
LMS-2 encountered gas but still needs to be tested. Testing is expected to take place once COVID-19 restrictions on the movement of equipment and crews are lifted.
Other than that its an acquisition we are after and hopefully behind the scenes its full speed ahead on that score and a development is imminent.

Some kind soul sold 500,000 shares this afternoon, no doubt to help market liquidity. After all the Market Makers are struggling for shares.
Probably the same investor that was buying 100,000 tranches back in April.
Turned a nice little profit, well done.
Now that's him out of the way, nothing to stop this SP going higher with good demand shown last week and again today.
What will tomorrow bring?

https://www.edisongroup.com/publication/sobhi-sole-risk-delivered-a-commercial-discovery/26741

'SDX Energy recently reported its FY19 results reflecting a 14% increase in production driven by the start of production at South Disouq in Egypt, and its accelerated ramp-up ahead of expectations. The drilling campaign in Morocco resulted in seven discoveries and a tenth well is to be tested. The company ended the year with a cash balance of $11.1m and is fully funded for all 2020 activities from existing cash flows. In this note we update our valuation to reflect, among other things, FY19 results and the uncertainty caused by COVID-19. Our mid-case RENAV valuation has decreased to 40.7p/share from 53.9p/share (-24%) as we adjust our short- and long-term oil price assumptions, revise our forecasts to reflect the 2P reserve base update and remove Salah and Young prospects from our valuation'

Hi Macduff
I don't think that SDX is being set up for a take over.
There was speculation some time ago when Waha created SDX (SPV) Ltd and SDX withdrew from TSX, but as far as I am concerned such fears died with the departure of PW and Raynes.
Now, I believe the future for SDX is much more positive for shareholders.
Mark Reid is now at the helm and he has been steering SDX into much calmer waters, getting the South Disouq project done and completing this years drilling program. The really big change though is the appointment of Amr Al Menhali in Nov 2019 as a non exec to represent Waha on the SDX Board. Waha are a serious and well connected investment business in the energy sector. Last year Waha's investment in SDX had a carrying value in their books of AED 68.8 million as at 31 March 2019. This year that value is substantially down. Amr Al Menhali will want to change that, in fact he must change that. He has been in place for 5 months now, has no doubt completed his full review of the business development options for SDX, and he must be ready to make a significant change.
I am hopeful that Mr Menhali will broker or engineer a much larger corporate consolidation, an acquisition is my bet or a consolidation with a much larger business. Whatever change is made, the objective will be to increase the value of Waha's investment, and there is plenty of scope for that at todays SP.
Currently the SDX capitalizes at approx. 40million but the true NAV value of assets is closer to what? 100 million? Any consolidation of SDX or acquisition will by design drive the SP closer to that figure.

Well, a 4p uplift from 16p to 20p for the week, 25% increase.
Not a shoddy week by any means and very encouraging.
Nothing appeared in the news or by way of announcements to explain the steady increase in the SP. We can only speculate as to the driver but the SP is being driven. The share volume is rising too but I suspect only because the steady increase in SP is grabbing the attention of investors, who are merely dipping their toes in. The market makers are making the running here. There was a 150,000 unclassed share transaction that was put through late on Friday at 20p, could this have been a part of the large buy order that I think has been sitting in the background all week? Maybe it explains why the bid was kept at 19.5p on Thursday and Friday, because the large order is at 20p! Hopefully, the mystery buyer puts in a higher, bigger order next week, maybe 25p. Who knows.

Just look at that!
A 100,000 share transaction has just popped up on my screen from 11.33am at 19.75p.
Now normally a sale like that would put the bid in a tail spin but not today or any day this week.
What is going on?
IMHO the market makers have steadily moved up the bid in an effort to accumulate shares to fill an order. It must be a big one though because no large transaction has yet appeared on the register. I cannot think of any other explanation which fits the facts, can you?
The big question is, Why has someone placed such a large order? Why now and who, would be good to know as well.
Are they buying ahead of some corporate action to raise funds for an acquisition?
Who knows, but SDX are in a nice position right now. Projects such as South Disouq CPF are pretty much finished and the 2020 drilling programmes are nearly over. Cash is pouring in from the fixed price contracts and ongoing cap ex is limited.
What a great time to bring on the next acquisition.
No doubt Amr Al Menhali is pushing for this and may even have lined up the candidate already.
Is that what is being anticipated?

Still cannot buy SDX shares this morning, but dummy sells are quoted straight away. This situation has been with us all week and I expect the same result, a steady untick in the Bid to attract small sales from the weaker holders. The SP has broken the 20p barrier, now hopefully it will the bid will be pushed through too.

I think that IPR Energy must be very strapped for cash to be forced to sacrifice a share in Sobhi for such a relatively small capital sum. Remember, they already have an established and fixed production income from existing assets on the concession and a substantial investment in infrastructure. To give up the development of that asset is desperate at such an early point in the 'crisis'. I think it shouts 'we are in big trouble'. SDX should gear up and buy that share while they can IMO.

IPR Energy have been partners for 3 years now and with SDX throughout the South Disouq exploration and development. IPR have a 45% interest in the 4 productive SD gas wells, Yunis-1X, SD-4X, SD-3X and of course, they co-own the results of the seismic survey which SDX completed on the concession.
As you pointed out some time back Shakey, it was very interesting that IPR chose not to participate in Sohbi after such earlier success in SD and having such a big investment in the pipeline and processing centre. You thought at the time that it may be because they didn't assess it chance of success very high.
In fact, it may well be that IPR Energy chose not to participate in Sohbi in early March, because they are strapped for cash, or foresee cash being extremely tight during this Covid Crisis and they needed to immediately cut back their capital investment plans to conserve cash.
Perhaps this is a wonderful opportunity for SDX to help them our by purchasing their 45% share. What do you think, seems like a perfect fit to me?

The MM's are still pushing up the bid to attract more shares, they want to encourage sales to fill that order.

It was neigh on impossible to buy shares for most of the day. The SP was pushed up towards the end and a few buys went through. The last few transactions were probably buys but were classified as sells because the spread was increased suddenly to 2p. The day was capped off with 2 Price Monitoring Extensions just for good measure.
What does all this mean?
Sudden, unusual activity in a share market that is usually nauseatingly pedestrian, is a signal of...……..?
Can't wait to see what happens tomorrow.

Thanks for that analysis Shakey.
My hope and expectation for SDX is to see shortly some form of corporate action to raise debt or equity for an acquisition.
SDX are in a good position to raise additional finance and with Waha's help and guidance, no doubt finance would be readily available for the right acquisition. The timing is spot on for SDX who are in a sweet spot of management and financial capability to handle an acquisition. Add to that the fact that now is a good time for potential acquisition targets in the Egypt and Morocco market. Not least of which is the sale of Shell's Egypt western desert assets. Obviously your chart analysis cannot predict the effect on the SP of such an event but it would be a real tipping point for SDX and its share price don't you think? Perhaps the only chartist reference point for this would be the found in earlier trends when SDX first acquired Circle Oil's Egypt and Morocco assets. What do you think? Is there a bigger picture chart analysis which may be relevant?

Again this morning, you can sell as many SDX shares as you like but try to buy some and you are met with 'Unable to Quote'.
The free float of SDX shares is so small that the MM's are crying out for them. No doubt the Bid will move up this morning as the spread is too great and they want to encourage sales to fill that order. 51 small transactions yesterday but mostly buys and a couple of chunky ones towards the close. Question: Would better share liquidity help SDX's share price?

The MM's want your shares and they are moving up the Bid very steadily to attract the odd sale.
I suspect to fill a large order, because you can sell as many shares as you want at the moment but try to purchase and your order is met with an 'Unable to Quote' response.
This is a healthy position for the stock to be in I think and it should result in a continuation of the steady increase in the SP that we have seen for the last week or so.
I would be interested in what the charts are suggesting maybe happening here. Anybody have any suggested Chartist interpretations?