SDX Energy


£46.6m market cap

22.88p last close

SDX Energy is a North African E&P listed in Toronto and London. It has oil and gas production in Egypt and gas production in Morocco.

Investment summary

SDX’s guidance revisions have resulted in a further downgrade to our short-term cash flow forecasts and NAV. On 20 June 2019 we reduced FY19e production from 4.3kboed to 3.4kboed (-21%) and project more moderate growth in SDX’s Morocco gas demand with an associated RENAV impact of -42%. Key drivers of management’s downgrade include lower Sebou gas demand growth, a higher than anticipated water cut at North West Gemsa and a delay to production ramp-up at South Disouq. Our valuation fell from RENAV 86.5p/share to 49.8p/share (-42%), while our core NAV (producing assets and South Disouq) fell from 70.1p/share to 45.0p/share (-36%). Based on our latest estimates, we expect SDX to end FY19 with c $4.9m of net cash on the balance sheet.

Y/E Dec
Revenue (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 39.2 21.9 32.8 14.1 2.1 2.8
2018A 53.7 35.5 7.1 3.8 7.7 1.4
2019E 45.3 20.7 8.3 3.8 7.7 1.0
2020E 51.5 30.9 14.0 6.4 4.6 1.0
Last updated on 28/05/2019
Industry outlook

SDX remains open to adding to its portfolio and sees Egypt as a natural market for consolidation, given the large number of small players. Its acquisition of Circle Oil’s Egyptian and Moroccan assets in early 2017 show that it is able to negotiate and complete transactions efficiently.

Last updated on 28/05/2019
Oil & gas
Share price graph
Balance sheet
Forecast net cash (US$m) 4.9
Forecast gearing ratio (%) N/A
Price performance
Actual (25.4) (35.5) (63.2)
Relative* (22.6) (36.2) (60.7)
52-week high/low 66.5p/22.8p
*% relative to local index
Key management
Mark Reid CEO

Content on SDX Energy