LONDON, UK / ACCESSWIRE / December 12, 2019 / SDX Energy (SDX) announced early in November 2019 the commencement of production of natural gas in South Disouq, in Egypt. We expect this achievement to have a material effect on SDX’s cash generation in the coming years. The field has already achieved a plateau production of 50mmscfed, three months ahead of management expectations. Along with its Q319 results, SDX also outlined its exploration and appraisal drilling programme for end-FY19 and FY20, with up to five wells to be drilled in Egypt and 12 wells to be drilled in Morocco. In this note, we update our 2019 production to account for South Disouq contribution, and for 2020 at production plateau. We also update our exploration target resources. Our valuation moves from a RENAV of 49.8p/share to 50.3p/share (+1%), while our core NAV increases from 45.0p/share to 45.7p/share (+2%).
Our core NAV increases by 2%, driven by South Disouq progress in 2019 being ahead of our previous estimates. We also update SDX’s exploration and appraisal target resources for 2020, which, in combination with the core NAV, results in a RENAV of 50.3p/share, 1% higher than our previous valuation. The current share price appears to be heavily discounting SDX sanctioned projects, which correspond to 91% of our RENAV, as well as any future growth potential in Egypt and Morocco.
Click here to view the full report.
Subscribe to Edison’s content to receive reports by email.
All reports published by Edison are free-to-access and available on the website.
About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison’s reports are not solicitations to buy or sell any securities.
For more information please contact Edison:
Carlos Gomes, +44 (0)20 3077 5700
Elaine Reynolds, +44 (0)20 3077 5713
Learn more at www.edisongroup.com and connect with Edison on:
SOURCE: Edison Investment Research Limited
View source version on accesswire.com: