Further to the First Energy Conference thread with some added detail :-

Old management of Centurion Energy who sold out to Dana Gas for $1.2bn.

In brief :-

Shares out fully diluted 419m (options/warrants 43m)
SP $0.25
M/cap $117m
Debt Nil
Cash $18m

Assets (Egyptian)

N.Gemsa 2P 1.7mmbbls producing 940 bopd net sweet crude
Cost oil 30%. Profit Oil 23:77 con:gov

Al Baraka OIP 100mmbbls(gross) 2P 6.3mmbbls producing 1100 bopd net light crude
Cost oil 40%. Profit Oil : 35:65 con:gov

Combined assets expected to increase production to 4600 bopd in 2012

So SDX have an EV of $100m for 2P reserves of 8mmbbls. Not cheap on the face of it at $12.5/bbl. However, the fiscal terms are attractive for Egypt, especially Kom Ombo Block 2 where the Al Baraka field lies. Reserves there are pending review, unsurprisingly, given the OIP. The Kom Ombo licence was in fact part of Centurion's 100% owned assets when they sold out to Dana Gas. SDX bought 50% interest from Dana for $45m earlier this year. Note the bought deal to fund this acquisition was priced at $0.40/sh, a 7% discount to the prevailing SP at that time, having previously hit $0.67 around the time of the original announcement in January. Come back to earth since of course. Can't see any reason why the market should have lost faith but then again I can't see why it got excited in the first place!

There is decent explo upside in Kom Ombo particularly. The final explo period expires in July 2012 with a commitment to drill 3 wells, so not too long to wait and see what holds there. Costs probably $14m, some of which has probably already been spent.

N.Gemsa is the same licence in which Circle Oil has a 40% interest

The management have a proven good track record and pretty decent Egyptian relationships. Indeed, they have struck an alliance agreement with Tanmia, a subsiduary of EGPC, the NOC, to explore and develop O&G concessions whereby Tanmia is free carried and SDX benefits from 50% cost oil to recover explo/appr/dev costs.

Downside looks fairly limited. I don't see this company as having much of a multi bag chance but it does seem…

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