Member Info for Southmead

We are all finding this share activity very frustrating, I can assure you.
Every day it seems, the guts are ripped out of the market in SDX shares by these big sales transactions going through.
It seems very deliberate and calculated. Sales volumes are matched to the purchase activity and timed to immediately dampen any positive action.
What to do?
What can we do but sit back and relax with the knowledge that the business results are brilliant, the Company is well run and management exceptional. SDX have an excellent immediate future with a fully funded exciting 2019 drilling programme and the comfort of a growing positive cash flow from production.

So relax. :)

The new Competent Persons Report (CPR) is due to be published in Q4 this year.

There are many ways to value an asset business like SDX.
The share price however is the only method that really matters to shareholders. All other valuation methods provide comparison and reassurance but they have no direct relevance.
Rest assured that ALL valuation methods value SDX at significantly more that the share price market capitalization of currently approx. $156M.

The point that you make, Richard1032 about the Q2 balance sheet value of current assets is skewed I 'm afraid.
The way to think about it IMO is that the Market Cap of SDX is $156M of which $74M is represented in current assets and receivables. That leaves only $82M representing all the assets owned and operated by the business.
Forget creditors for now.
Managements own valuation of business assets based on the Risked Exploration Net Asset Value (Renav) is $404M. Of which $36 is represented by cash and receivables. 'Net Asset Value or NAV - This is the major valuation metric used to evaluate oil and gas companies. It is a value, generally shown per share, of the value if the company produced all of its assets for their entire life'
Now if the SDX management RENAV is correct and it makes big assumptions about the size and value of reserves. The current share price market capitalization is covered 2.5 times or represents a discount of 60%. Stunning value.
Whether you use current assets or cash or exclude creditors is missing the point really, all measures and treatments point to one fact really, SDX is hugely undervalued at the current SP.

This is why a new Competent Persons Report (CPR) on Proven and Probable Reserves is very important to we shareholders as it will provide some reassurance to the market about the value of SDX's assets and serve to underpin the SP.
I hope that this helps.

I broadly agree with your breakdown of the 8000 bopd figure Daft63.
If that volume is maintained as an minimum through 2019 it is forecast to produce a turnover of approximately $81m and an operating cash flow of $58m. That assumes $70 oil.
Add to that base situation, the possibility of significantly good results from Lalla Mimouna's LNB-1 and LMS-1 which are yet to be tested properly, and 2019 has the makings of a huge success even before we start the 2019 drilling programme.

Plenty of purchases this morning, last chance to get some shares under 60p I guess.

In Malcy's piece yesterday, he mentions a planned CPR.
'Finally, a little earlier than expected, the new CPR is being worked on and should be out in the 4th quarter and I would anticipate an increase in reserves given the year that SDX has had'
I haven't found any reference to this anywhere else but of course, it is very welcome as a consolidation of the great discovery and development success's made during the last year.
Anyone have any more info on this?

Hi Shakey:
Yes I picked up on it as well.
Amazing that SDX have drilling success which adds substantially to their volumes and they fail to shout about it.
Many companies would hype that up at every opportunity.
PW says that well success with MSD15, MSD16 and MSD17 will probably raise production to 5500 BOE/D with the final well on top of that so maybe 8000 BOE/d by end of year!!!
Great results but should be in an RNS I think.

What an excellent interview from PW.
Packed with punchy upbeat comments on SDX's first half performance and outlook for the remainder of the year.
Having read the new August Presentation and listened to the interview, I am positively reassured that I have invested in a great business. As PW says, the share price reaction today was unexpected and difficult to understand. A good buying opportunity for those with the nerve and confidence to be brave when others are fearful.

The Cash Flow Statement for the 6 months ended 30 June period shows that total capital expenditure on drilling etc was $24.7M which would roughly equate to a monthly cash outflow of $4.1M. Planned capital expenditure in the next 3 months will be very small in comparison and most revenue should flow straight to the bank balance. With a new production rate of 4444 BOE/D I should imagine that ceteres paribus, the bank account should benefit by over $25M during the next 3 months and finish around $50 at the end of september.

Now if that can be achieved the SP would have to move up substantially as cash would represent about 40% of the capitalised value of SDX..

Here is a hidden gem in todays report!!!
As a result of the success seen in the LNB-1 and LMS-1 wells, a two year extension to the LM Nord permit was submitted and granted post-period end. This extends the permit validity from July 2018 to July 2020.

This RNS just reinforces what Edison wrote in their summary of SDX just a few weeks ago.
It is the 2019 Drilling Campaign that will add the real value to this business. What we have now is a very solid position, cash generative and fully funded to make the most of that campaign.
That is why I for one wanted to see a little feedback on the progress of the seismic programme, but whatever, I can wait with these results behind us.
Edison said
'In 2019, drilling in Egypt will focus on several Ibn Yunus lookalikes with combined unrisked recoverable volume of c 70bcf and a 17bcf Abu Madi structural trap. In addition, SDX will target a 50mmbo unrisked oil prospect in 2019. In Morocco, SDX has a commendable 87% success rate of discovering gas at Sebou based on calibrated 3D seismic; 2019 targets include 20bcf of gross unrisked resource adding gas-behind-pipe in order to meet anticipated demand growth. Our updated valuation includes planned exploration, appraisal and development activity for 2019 and higher short-term oil price expectations, with valuation rising from 65.6p/share to 92.5p/share (+41%).'

Good Morning
A solid set of results.
1 Production at 4444 BOE/D in August up 37% on first half. Should generate $8m per month gross.
2 Target of 8000 BOE/D still in place for end of year.
3 25m pounds in the bank, less than I had hoped but enough for the coming drilling program.

Shame that there is nothing on the seismic results so far.

Now, 4.45pm Monday the SP is showing as $1.09, up 05c on Friday's close.
Roughly 65.5p in old money.
Augurs well for tomorrow.

'This time next year Rodney….. we could be millionaires'

There is a very tight spread today which I suspect is playing around with the classifications of 'Buys' and 'Sells'.
The screen appears to have a lot of sells shown in red., but the SP remains quite level.
In my experience this usually means that the tight spread is causing some classification difficulties and some transactions that are shown in red are in fact buys.

Yes Richardo, new management guidance on Proven and Probable Reserves would be very welcome indeed.
Even better, an announcement of a new CPR to be carried out would also be helpful to try and quantify and value the discoveries that have been made over the last year. Managements current estimates for Proven Reserves is 13.5 mmboe and Prospective Resources 29.86 mmboe. Surely these figures are way too low after the discoveries.

I am particularly looking forward to an update on the seismic surveys and the workovers in Meseda and SW Gemsa. How we are getting on against the 8000 bpd targetThe pursuit of greater productivity and Not forgetting, of course the drill at South Ramadan!
Wouldn't it be a marvellous break if that well came in? However, I wouldn't hold your breath on that one.

A stepped 3% increase in the Canadian SP yesterday up to $1.03.
Whether or not the Canadian SP movement is of any relevance to the UK market is up for discussion as the two SP's regularly move in opposite directions, it seems to me.
SDX has Canadian roots which may explain it to some extent.

https://energyegypt.net/sdx-completes-successful-production-test-at-south-disouq-sd-3x-well/

As you say Stock101 good publicity

What do you think it means Shakey?
Give us your take on it please?

The Canadian SP has opened up 2c at 1.02$.
UP 2% when the SP here is struggling with a lot of small sales going through.

I cannot help wondering whether the Canadian market is better placed to get a steer on what is going on at SDX.
Is that why we have the SP direction disparity?
Perhaps we should take our steer from them? The upcoming Interim Results are obviously making Canadian investors more confident and they are pushing their SP upwards while we are dragging ours down.