Member Info for SQ320

As the RNS says next week millions of shares will become tradeable. I'm not surprised the market wants to wait and see what those shareholders intend to do.

Diversified, the point about the lock-in is really reassuring. If they are locked in for six months, they could still short, but I don't think that would be likely given how much can happen in that timescale.

But IIRC Zengas has pointed out that the share buyback if there is one, may be delayed because of upcoming capex.

The quantity of new shares issued depends on the share price, the lower it is the more shares that are issued. So AIUI some people have a vested interest in driving the share price down. Or is that too simple a way of looking at it?

The Hannam note from August says: "SAVP will issue US$37mm of shares on completion (for the SSN and Stubb Creek purchase) at a price based on 5-day VWAP – at the current share price this would be ~160mm shares (current basic shares outstanding of 880mm). "

So we have people being issued equity at around 23p. Now some of them will hang around for equity appreciation. But 160m is a heck of a lot of shares, especially given the daily traded volumes.

So over the next few months, I think the SP is going to be driven by what those bondholders do.

"1. You'd think the company would be taking its lead through meaningful discussion and expectation setting with TDPC, not by observing the other players. Do they not talk to TDPC?"

I think the company's line has been that some of the issues they have been facing are not specific to them, but industry-wide. So it makes sense to say that the industry-wide logjam has been cleared.

Mentally I am prepared as a shareholder that if matters go on until June 2020, I'm going to be wiped out.

There can only be a date for drilling once the long lead items are in place and that needs £ commitment. Since they have placed the order for these items, the actual drilling date is one big step closer.

O&W the company's more recent announcement say that at least some of the $12.5m may be used for share buybacks.

Usually I am not in favour of these, but given the big disconnect with the value, it seems sensible here. It should also take out some of the big sellers.

There is also the small matter of what seven bondholders intend to do with their SAVP shares. They'll be given $US50million worth.

SAVPs plans have changed from giving a dividend to a share buyback (perhaps both), but I reckon they'll have to spend a fair few million $ to deal with the 7 bondholders shares.

Interims are out next week, might be a broader update then.

Let's say we have a US$500m asset sold to us for $300m. With 205m shares in issue that works out at a handout of 75p per share. The closing SP was 57p, so we could get to £1.30

But what if PW does not want to take on US$300m of debt? Given the current oil price and the up-trending stock market, what if he wants to do a placing?

100m shares placed at £1?

Also worth remembering that the AGM starts at 9am, which is fine for II's but difficult even for PIs living outside London.

Morocco 1. It's been mentioned that you have plans for 11 drills in Morocco next year. Would have an guidance as to where these will be? 2. The company mentioned that there may be potential in the deeper horizons (if that's the correct term) in Morocco, what's your latest thoughts on that? 3. You've mentioned that Peugeot's price for gas will depend on the oil price. Is that something you asked for or that Peugeot wanted?

Morocco 1. Your exploration licence for Lala Mimouna Nord is a very large area and your 3D seismic covers a relatively small proportion of that. Do you plan any further seismic acquisition in the Nord area? Do you plan any further exploration drilling where you already have 3D seismic? Egypt 1. What are your plans for the contingent well in SD? 2. Last year your brokers down-graded their assumptions for Egyptian gas from $2.65 to $2.50, was that based on guidance from you was this based on the feedback you'd received from the Egyptian government?

The AGM is the day before. So I'd hope there is some interesting news around that time.

I'd expect they'd have their hands full in terms of the unexpectedly good results from Lalla M. The more they extract value themselves the less the chance of someone else making an opportunistic bid!

I haven't got the specific text to hand (I think it's a broker note), but IIRC all their 2017 drills in Morocco simply replaced what they had produced during the year. What's getting me excited about LM is that we could possibly be looking at adding to reserves and the LNB well seemed to have found substantially more than the going rate for the Sebou wells. They make no claims about LMS, so here's hoping once the flow tests are done. And of course if we're lucky they'll have more targets to go for in the nord in the next drilling season.

Hi Urraca The industrial zone in Kinetra is to the south of the existing production in Sebou, this is to the north. So it's a bit further away. And a pipeline extension will have to be built. But IIRC based on the last result they said that the pipeline would be economical. For me the problem in Morrocco had always been reserves, profit margins they bang on about, but the market wants future cashflows. So you need to be doing more than just replacing what you have recently produced. What will be very interesting IMHO is if these results mean that they can go for other targets in the Nord area of the licence.

The LMS-1 well was drilled to a total depth of 1158 meters. The primary target was in the H-9 sequence which is a Miocene aged shallow marine deposit that had not been previously tested in the area. The well encountered 16.4 meters of net conventional gas pay sands which had an average porosity of 32% in an over-pressured section. Similar to the previously drilled LNB-1, heavier gas shows were encountered indicating the presence of a deeper thermogenic source rock charging the structure. In addition, the cuttings showed evidence of fluorescence indicating the potential presence of liquid hydrocarbons within the section encountered.

I think what you may be missing is the 'nice problem to have' SDX will be facing if the drill/flow results come out positive. Remember it is possible the Lalla Mimouna results open up the entire northern block. That could well mean more seismic and drilling going forward. They may well need a significant drill programme in 2019. I am hoping to hear more at the AGM. So if there is an opportunity to acquire assets, I think they may need to raise more equity. And if they need cash it's better for us it's done when the biz is doing well and the macro story is good.

I can read posts there, but can't comment. Anyway he says this: As for JS and SDX motivation I would point out that SDX is now past the stage of most Canadian junior E&Ps and mining companies. They have no debt and the ability to be totally self-funding from internally generated CF. If they are patient and disciplined they should never have to do another equity raise but of course that doesn't mean they won't. https://www.investorvillage.com/smbd.asp?mb=16015&mn=953&pt=msg&mid=18249988 In my view the ONLY reason directors like PW come onto youtube etc. is because at some point in the future they want/need to come to the market to raise cash. Of course dilution is not a problem provided it means the purchase of assets that provide compelling value. In fact the more richly valued a company is the more sense it makes to issue paper in order to buy out competitors whose valuation is in the doldrums because of the problems that have accessing cash.