I don’t see the sense in anyone taking this company over until we see the results of Part B. And while the delays to reporting these results may be frustrating, it is entirely within the norm for companies operating in this sector, and particularly during a pandemic. In short, it’s a bit of a waste of time speculating on anything - or blaming management - until we get the Part B results and have a better steer on the value of the primary asset. Hopefully, we will be seeing those results soon - the latest guidance was late summer/autumn.
Thanks nobull, yes I agree the market needs to see tangible debt reduction before any sustainable rerate, but I think events are coalescing that make that event increasingly likely - the main ones being the favourable pricing environment confirmed by the return to profitability and the confidence evident in the outlook statement. Interesting I think to look at the share price chart pre and post March last year. It seems the stock took a gigantic covid hit, which has yet to unwind - despite the market increasingly pricing in recovery pretty much everywhere else. Given what we are seeing in the fundamentals here, a reversion not only to £1+ but perhaps well beyond - given the specific fundamentals here have strengthened beyond where we were in early 2020 - may be warranted. Seems to be a background seller currently - hope they don’t know more than I do! ATB
RE: SDX 12 Month Target Price Across 3 Analysts is 35.67P10 Sep 2021 10:40
Strange that a few here will quietly listen to analyst predictions of imminent cash flow implosion, but get a little narked on hearing one predict the shares may rise. The level of capitulation here is highly encouraging :)
Total speculative gossip, but Perhaps there was an offer for all/part of the company when CH was CEO, which would have secured LD’s financial future. But Redmile did not want it. So instead they agreed to secure her financially by buying her shares off her, and locking her in with options and the CEO spot. The exchange has taken place because an attractive value crystallising event was on offer, but Redmile see the potential for a lot more.
Morning nobull, new here and probably naive, but interested in your view. With EBITDA running potentially well above $60m usd this year, interest costs of around £25m, capex running around $10m annualised, surely the company is self financing at least at this juncture? In the first half net debt fell $15m, with the potential to do substantially more over the coming periods. So it seems to me - and happy to be corrected - that they are on the right path to start materially reducing the debt, for the first time in years. I agree - resolution of the coal loans would be another material and positive kicker. With the equity valuation such a slip of the total assets here, it shouldn’t take much to start moving the needle in the right direction. There have been several PMDR purchases of the ords over the last year, which encourages me to think that resurrecting the shares is a priority for them. With a shareholder base including M&G, UBS and other established institutions plus a full London listing, there should be broader pressure to do so. Do you believe the current price upcycle is going to be temporary?
BNP’s target valuation is between 21-38p.. ie the NPV of their forward estimates of free cash flow are at least double the current valuation. The posters who repeatedly suggest BNP anticipate a free cash implosion are clearly manipulating the true intention of the author. The consensus scepticism is highly encouraging. ATB :)
It has got this far because Merck and Pfizer have put their weight behind the lead product. Nobody with a brain cell is going to believe you know more than them - but I’m sure that won’t stop you believing it :)
So the trappy cynics have to concede the historic spend is inflated by pipeline costs that aren’t likely to continue at anything like the same level going forward, and that’s the inflated figure thats been driving their forward estimates. Quite an omission given their painstaking and objective search for truth and light.. Regarding BNP’s forward FCF estimates, we already know the NPV of that, 21-38p, or a target valuation at least double where we are now. What else might the cynics be getting wrong..
Well done, LC. If only the trappy cynics read the note properly, rather than misleading private investors with poorly researched tripe … “The below is what I found most interesting - per BNP it would appear that all the pipelines etc that are required to get gas from well to plant/distribution have been front ended and the pure "exploration costs" will be much less in 2022
Per BNP Projections ->
2021 2022 Purchase of Property Plant&Equipment(PP&E) -$16.4Mn -$3.2Mn Expl & evaluation expenditure -$11.6Mn -$14.2Mn Total -$28Mn -$17.4Mn
It is clear now that SDX management have front loaded extraordinay pipeline expenses etc and barring unforessen expenses - cash should accrue very rapidly..”
I think the growth investors who purchased at multiples of the current price - confidently backing their crystal ball about future growth - need to take a breather and reflect on where they went wrong. There are a number of unknowns here which may well fall in favour of the shareholders, and I for one will not be relying on the tarnished crystal ball gazers for future guidance. The one irrefutable fact is the market valuation is a lot lower than it was reflecting a pessimistic consensus. I suspect things are not quite as bad or irreversible as the doomsayers suggest. IMO. GLA
Waha own around 4m quids worth, and they can’t dump it on the open market even if they wanted to. They are certainly not finished with SDX and like the rest of us will want a decent price for their holding.
Agree littlened, though I think you mean more sellers than buyers. Looks like capitulation to me. Disappointed growth investors throwing the towel in - despite any rational assemblage of the facts suggesting this is materially undervalued .. ATB
The sentiment issue at this level is largely due to disappointed growth investors who purchased at 20p+, having to recalibrate expectations for a less visible future. But for those with a value bent who arrived at 15p and below, SDX ticks a lot of boxes. Low valuation, high relative levels of current equity and cash flow, a pessimistic consensus about future prospects. If it’s any consolation, the latter tend to outperform and at lower risk (albeit without the swagger of following the latest industry favourite - I’m sure SDX was up there at some point in its past). To each their own. While I don’t think people are much good at predicting the future - SDX being a case in point in recent years - possible things that may surprise vs consensus include 1) change in management driving change in capital allocation 2) unexpectedly low drilling costs in 2022 3) unexpectedly high levels of cash generation during 2023 and beyond if/when assets begin to decline 4) takeover to drive scale economies from a peer entity 5) unexpected success in larger projects.: ATB :)
I have read people repeatedly counter you, and all you do is arbitrarily return to your endless list of negatives. It becomes dull and pointless. Here is an example “ I think that they should carve off $1-2m from their drilling budget for a buyback just to generate some interest/movement. Buyback vs 1 well in Morocco, I know which is going to get the MCAP to move up.”