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SDX Energy (SDX)

Business description

SDX Energy is a North African onshore player listed in Toronto and London. It has oil and gas production in Egypt and gas production in Morocco. A large gas discovery was recently made at South Disouq.

Stock data

Market cap.£120.7m
Last close59.00p
High / Low (52 weeks)73.0p / 43.5p
Stock market listingLN, CN
Forecast net cash (US$m)32
Forecast gearing ratio (%)N/A
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(4.1)(2.5)26.9
Relative *(4.5)(6.2)23.0

* % Relative to local index

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Company news

Y/E Dec Revenue (US$m) EBITDA (US$m) PBT (US$m) EPS (c) P/E (x) P/CF (x)
2016A 12.9 N/A (26.7) N/A N/A N/A
2017A 39.2 N/A 32.8 N/A N/A N/A
2018E 54.5 N/A 25.6 N/A N/A 7.4
2019E 81.8 N/A 47.0 N/A N/A 3.2

Last updated on 03/07/2018

Investment summary

In this note, we revisit SDX’s 2017/2018 gas discoveries in Morocco and Egypt and look ahead at the company’s plans to leverage this success to deepen its resource base. 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%).

Last updated on 03/07/2018

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 29/06/2018

Key management

Paul Welch, CEO
Mark Reid, CFO

Company address

38 Welbeck Street
London
W1G 8DP
United Kingdom
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