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London PresentationBy hearing Paul’s presentation in London for the second time, what struck my attention were 3 things: 1. 1. He reaffirmed that 2018 exit production will be “in the north of 8000 boed". This means the Central Processing Facility (CPF) and the pipeline at South Disouq should be on time. 2 2. He gave the impression (according to my understanding) the CPF can be easily upgraded “by chunks of 30 mmcfd”. Again my understanding is that he wanted to give the impression that several chunks might be needed in the future. 3 3. M&A’s. I heard him several times in the past arguing that the current high price environment does not provide m&a opportunities. However, he spent quite some time of his presentation to support the view that m&a might be necessary and will be a (new) objective of SDX. According to my notes, by showing the picture below he said: “In Egypt, there are companies that are too small to survive”. “We had 2 transactions so far…this is the model in this current price environment. In the low price environment, it was fantastic because a few people were working in Egypt, in this high price environment we still think it works.” “We are targeting those companies in the bottom circle. They are primarily oil companies relatively small but have very good business because they are primarily onshore” (15’:30’’) “Putting those together and create a larger and more stable company is the objective of SDX.” (WOW! Does he really mean what he says? If yes, why does he reveal his plan to his targets? It makes sense only if discussions have already begun.) “You may see us add reserves through drillbit but also through m&a activity. So, stay tuned” Let's make 2 hypotheses of the objective of the m&a statements Paul has made: Either he means what he says or he wanted to sweeten the upcoming and imminent break (failure) off BP negotiations. The second seems more likely to me. But again, it’s only an educated guess. P.S. Dear Investorvillage support team, The Text Editing sup-program needs improvement. Thanks |
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Msg # | Subject | Author | Recs | Date Posted |
1189 | Re: London Presentation | tigris72poo | 3 | 10/21/2018 9:27:16 PM |