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Research: Energy & Resources
SDX Energy has released the results of an independent resource audit on its South Disouq discovery. Gaffney, Cline & Associates has assigned gross 2C resources of 47bcf and 2.3mmbbls and a further 180bcf and 8.7mmbbls of gross prospective resources. The company is in discussion to get production as early as possible to generate cashflows and value. Elsewhere, progress is being made at NW Gemsa and Meseda that should see production increases by year end. In Morocco, a campaign of seven wells is planned and should start in the next six weeks. We are reviewing our model and will update our valuation (currently 76p/share) in time.
Written by
SDX Energy |
CPR results confirm South Disouq |
Operations update |
Oil & gas |
5 July 2017 |
Share price performance
Business description
Analysts
SDX Energy is a research client of Edison Investment Research Limited |
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SDX Energy has released the results of an independent resource audit on its South Disouq discovery. Gaffney, Cline & Associates has assigned gross 2C resources of 47bcf and 2.3mmbbls and a further 180bcf and 8.7mmbbls of gross prospective resources. The company is in discussion to get production as early as possible to generate cashflows and value. Elsewhere, progress is being made at NW Gemsa and Meseda that should see production increases by year end. In Morocco, a campaign of seven wells is planned and should start in the next six weeks. We are reviewing our model and will update our valuation (currently 76p/share) in time.
Year end |
Revenue |
PBT |
Cash from operations (US$m) |
Net (debt)/ |
Capex |
12/15 |
11.4 |
11.1 |
(5.2) |
8.2 |
(5.1) |
12/16 |
12.9 |
(26.7) |
(1.9) |
4.7 |
(11.9) |
12/17e |
45.5 |
9.9 |
29.9 |
20.9 |
(22.9) |
12/18e |
80.9 |
35.9 |
56.4 |
35.1 |
(44.6) |
Note: The financials above include the (unrisked) impact of South Disouq, which we estimate will require substantial capex in 2017/2018.
The release of the resources update confirms the significant potential that SDX unlocked at South Disouq. The report estimates that further resources (of 180bcf and 8.7mmbbls, split across four prospects and five leads) have been de-risked (GCA indicates a CoS of 40% for the prospects), indicating considerable follow-up potential. We note this does not include the deeper prospectivity encountered in the cretaceous with the SD-1X discovery. Being so close to infrastructure, the gas and condensate can be developed quickly; we would expect production in late 2017/early 2018. Before then, we would expect the company to release its plans on the appraisal and development of this exciting area.
In Egypt, the company plans to maintain production at 5kbd at NW Gemsa with ESPs and workovers. The fluid treatment facilities at Meseda are complete and after ESPs have been installed, we expect material production increases towards the end of the year.
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This morning Angle reported initial results from its two lead clinical trials with Parsortix, a liquid biopsy system. The two studies ran in parallel in Europe (ANG-001) and the US (ANG-003) and explored Parsortix’s efficacy in triaging women with ovarian masses before surgery ie looking at whether the tumour is benign or malignant to estimate the extent of the necessary surgery. Both studies recruited 200 patients each and reported sensitivity was up to 95%, while specificity was much higher than existing tests. Angle has refrained from releasing further data, as it believes that the diagnostic algorithms (combining Parsortix findings, RNA markers and patient data) that were developed during the trials could be patented.