Egypt – SDX Energy

A very interesting presentation from Paul Welch CEO of SDX energy.

I like the strategy and the solid base from which they plan to expand.


 

And an interesting opportunity in the acreage:

 

Egypt – SDX Energy

Remember Paul Welch the ex CEO of Chariot? Also Mark Reid the ex CFO of Chariot? Well SDX was launched on AIM in 2015 and they have a bigger board than Chariot – after Chariot got rid of several world class non-executives leaving Larry, and some guy from Jersey who looks after the interests of the other guy from South Africa :-), and also a Non Exec Chairman from the USA who to the best of my 4 year knowledge has never attended any AGM in person in the UK or Jersey. Prove me wrong if you can.



Looking at the SDX website SDX appear to have a very good strategy in place – high margin generation (cost of $10 bb and aiming for less than $5) which makes it a very interesting company from that perspective. The opportunity to improve their production capacity across all wells also looks interesting.  The ability to generate positive cash flow combined with some interesting free carry exploration plays is very different to the Chariot Elephant hunting  mantra. SDX also has a keen eye on consolidation of smaller oil companies into SDX. I have always liked consolidators! Take a look at the SDX recent presentation.

The SDX PR also looks to be in a higher league than that of Chariot’s which has always been a bone of contention with shareholders. Remember the shareholder communications (rushed) survey that Chariot did? Did it improve PR? Did we ever get any feedback? Just saying …

One thing that does surprise me is the low rate of working capital – especially cash  in the bank – given the ‘free cash flow’.

That aside, I for one am interested in this company. It’s one worth watching and possibly acting upon going through 2017. DYOR.