In my opinion this company is run for the long term benefit of the two top shareholders.
But where is the benefit? ESP with the sp in terminal decline!
As I said, long term benefit.
Mark Reid CEO must be grateful that SDX do not have 250 employees or he would have had to explain how he has fulfilled this duty in the 2019 Annual Report, that would have been a very brief paragraph.
The Half Yearly and Q3 Financial and Operating Results have been announced without the need to give interviews. Similarly the start of a 12 well drill campaign did not warrant a media interview.
What was really surprising though was that when the biggest news item for SDX in probably the last two years happened, first gas at South Disouq, there was again media silence.
What is strange is that on the SDX Twitter feed Mark Reid himself is quoted as saying
Mark Reid, CEO (1/2): “Achieving first gas at South Disouq earlier this month was a major milestone for SDX and it is anticipated to have a material impact on the Company’s cash generation going forward.”
Definition of milestone: a significant stage or event in the development of something.
This wasn’t just a significant event though, it was a major significant event.
If such a major event doesn’t warrant the CEO promoting the company by giving media interviews, then it is very difficult to see what in terms of company news would.
In terms of a listed UK Company what is bigger than a major significant event?
I am struggling to think of anything bigger, especially when as he says it will have a material impact on the Company’s cash generation going forward.
Perhaps he doesn’t see himself as the public face of SDX or he doesn’t think it is part of the CEO job description.
Sadly another chance to promote SDX’s achievements was missed yesterday.
Having failed to promote South Disouq coming online, yesterday was a second chance to laud SDX as they have reached the 50MMscfe/d ahead of schedule.
As I have said before a lot of these media interviews can be done over the phone from the comfort of the CEO’s office.
I wrote to SDX yesterday to congratulate them on this achievement, I said I had been critical of the CEO in the past but I gave him credit for reaching the plateau this soon.
I also said I was hoping to see a media interview later in the day reminding the market that whatever happens to the oil price SDX would now get about $1m a month net from South Disouq, well it obviously fell on deaf ears.
An interview might appear today but don’t hold your breath
At the least directors are buying shares. I don’t suppose they’re buying them to make a loss on them.
If all is well here and things are as they are presented then this really could be a gift horse. Buy more shares I say. The whole oil and gas sector has been battered. I think this will go up if the sector goes up.
Directors buying shares is always a welcome sign but it is yet another reason to give an interview. They are putting their money where their mouths are, why not explain to potential investors why they should buy into SDX.
All companies need a public face to represent them.
SDX do not have a public face since Paul Welch departed. After all this time and news it is clear Mark Reid is not comfortable in front of the camera.
If that is the case they should employ a media representative to become the public face of SDX or Mr Reid should grow some.
Potential investors are always told Do Your Own Research (DYOR)
I start with the fundamentals, then I would read recent presentations on their website and then I would look at presentations the CEO has made at investor events or to the investment media to form an opinion of the top man.
Is the CEO confident, knowledgeable, do they answer difficult questions or avoid them and frankly do I believe them enough to invest in their company.
During that process, in my case, I was wrongly convinced by Paul Welch.
In February 2019 Paul Welch attended the Egypt Petroleum Show and as far as I can see that was the last presence by SDX at an organised investment event aimed at Retail and Institutional Investors.
In March 2019 Paul Welch gave an interview to Malcy on Core Finance and in April 2019 he gave an interview to Proactive Investors.
As far as I can see these were the last investment media interviews/presentations given by anyone at SDX.
I like most SDX investors would love to see an army of investors all convinced by the SDX story and keen to buy shares. However, this falls down because during their research they will discover the issues with Paul Welch and since taking office as CEO on June 1st 2019 Mark Reid CEO has not given a retail investment media interview nor has he attended and presented at any investment event aimed primarily at Institutional Investors.
The result being that potential investors cannot assess the CEO because he is invisible. If anyone can show me a presentation given by Mr Reid I would appreciate it.
Investors hoping for a change in fortune for the SDX share price may have a long wait. If I was new to the SDX story I would want to know the new management had learnt from previous mistakes and it would be up to the CEO to convnce me. With an invisible CEO I would not be convinced and I would look elsewhere to invest my money.
That is the current situation with SDX, the fundamentals are good, they are spending all their revenue on more exploration, no dividends are expected in the medium term but most importantly they do not have a visible media face to convince investors.
Until that changes potential investors will always be put off and look elsewhere for a company management they can trust.
When you say ‘investors’, are you referring to retail investors? Because this company is majority owned by institutional investors and a few sticky fingered private investors and none of them are selling.
I am referring to both, any appetite to invest here would be welcome. The current investors who continue to hold, be they retail or institutional, are not the issue. It is new investors wherever they come from that create demand for the share and will give us a more realistic valuation
Given that South Disouq producing first gas, the commencement of a 12 well drilling campaign in Morocco and an increase in South Disouq reserves of 35% failed to produce an interview from SDX, what is likely to generate one this year?
The Operations and Corporate Update is due at the end of this month. It will include the first drill results from Morocco but I wouldn’t expect a media interview, more likely another Presentation on the website.
The 2019 Year End Financial and Operating results will be released around 22nd March 2020. This will be the first set of full year results since our guide and mentor took over. I am hopeful that when these are released someone from SDX, even if it is the cleaner, gives some sort of media interview. By that time it will have been over a year of media silence.
If we don’t get one then it would probably mean the CEO goes into the AGM around 17th May 2020 never having spoken to the investment media, for most CEO’s this would be embarrassing and leave him open to criticism.
For that reason I think we may get an interview from the CEO sometime after the Annual Results are released but before the AGM.
With the AGM approaching he will also be mindful of showing he is doing an amazing job and should get even more shares under the Long Term Incentive Plan around August 2020.
Perish the thought that he isn’t incentivized and takes his silence elsewhere.
There is a chance of an interview if the more speculative wells at Lalla Mimouna find large quantities of gas in Morocco or the biggest prospective wells in Egypt Salah and Young make big discoveries. However, given what happened in 2019 in total silence I am not so sure.
If we fail to see any media interview after the 2019 Annual Results, we may go right through 2020 with the same media silence as last year, if that happens I fear the worst for our investment here.
Finally, Boris Johnson the UK Prime Minister earns £158,000 or around $207,000 salary.
If you double his salary it still falls short of our CEO’s salary of $450,000 plus any shares allocated under the Long Term Incentive Plan.
With Country Managers in both Egypt and Morocco, a relatively small workforce and no company promotion duties, it begs the question;
What does our CEO do all day?
The rise in the share price over the last couple of days is most welcome.
With very little volume the share price has risen impressively. Yesterday the number of shares traded was just over the average volume and today looks like it will repeat that again.
It does clearly show that IF there was a fairly large demand for the shares the share price would fly.
Even more reason to promote the company in the investment media after the January Update.
As I have said before the decision to not release news on each of the wells in Morocco in turn but to bunch them together and include them with the January Update, was a mistake in my opinion.
The January Update will be judged on its merits positively or negatively.
An optimist could say that by combining all this positive news into one RNS gives the maximum impact for the company and the share price. However, if SDX want to negate the impact of the positive drilling campaign news all they have to do is ensure the January Update contains just one item of bad news in it.
That one item of negative news would be the only thing that is remembered and the update would be viewed as neutral or at worst negative.
What I fully expect them to do is announce the first few wells and hopefully the positive outcomes in the update but to cancel that out they will announce that North West Gemsa is no longer financially viable and will cease production soon or with immediate effect.
Released individually we could have had 4 or 5 positive RNS’s and one negative. Lumped together it just gives one neutral update.
I hope I am wrong but we will soon see.
That all sounds a little conspiratorial Small_Holding
I don’t think the issue here is bad management and investor relations. I think it’s one of the following;
- They just don’t care about improving the share price short term
- They want the share price low - for whatever reason
Unfortunately the actions of the management here leave me with little choice other than to start to believe the conspiracy theories.
If you don’t buy into these conspiracy theories, then I’m afraid I have to throw that straight back at you
Why would the management of a listed company, that has a declared strategy of looking to make acquisitions, not want a higher share price?
Why would they want the share price to remain low?
The benefits of a higher share price are obvious if they wish to raise finance.
The strategy of SDX from their website states;
“SDX Energy also intends to leverage its strong balance sheet, benefit from early mover advantage and its strong regional networks to grow through the acquisition of suitable high value asset opportunities in North Africa.”
I am genuinely intrigued as to what explanation you have for why a company would want a low share price, either short term or long term.
I am all for believing in conspiracies if there is evidence to suggest. I know they are much more prevalent than most people who use the term ‘conspiracy theory’ do (which is the majority of the population).
Here, I don’t know either way. It’s just a set of options. I think one thing we can say here is they are certainly not going out of their way to increase the share price (like other companies do) through interviews/paid research reports/other types of pumping etc. I really don’t believe this is incompetence/lack of knack in the area.
You can’t take their stated strategy at face value. You can’t do that with any statement by anyone, Government, companies, certain billionaires… There is too much going on behind the scenes that we just don’t know about to have much confidence about anything if you’re honest with yourself.
We are in agreement that SDX are not going out of their way to promote the company. In that way they are behaving differently than most investors would expect a listed company to behave.
The reasons why they are doing that are unknown at the present and we can only speculate as to why, silence from the company just makes that worse.
I am sure that the investment media and analysts are well aware of this extended period of silence. They will make their own assumptions as we do.
What I would say is that during an economic downturn when investors are looking for a solid, cash generating business with no debt, you could argue that SDX should have fared a lot better than many other companies that are based on hope and expectation.
In the event we had an awful year and I put that down to a lack of transparency.
The reason I am still invested here are the strong fundamentals of the business and the fact that I am significantly underwater on my investment. If SDX were not generating revenue and had high debts I would have cut my losses and sold.
My belief is that IF the intention is to take the company private, the price we would get is higher than the current share price. I would still lose money but my losses would be lower than they are currently, for that reason I continue to hold.
Having spent hours trying to fathom what is going on here, the only logical conclusion I can come to is they are trying to keep the share price artificially low and the only reason I can see to do that is facilitate taking the company private on the cheap.
That would fully explain the media silence because they wouldn’t care what the media or the boards write because they will be out of it soon enough.
I sincerely hope I am wrong but my views won’t change until someone from SDX gives an interview clarifying what is going on and why.
The chart is telling me not worry too much. The whole oil and gas sector is down and SDX has come down with it. SDX is in a bottoming process at the moment and there will be ups and downs and more buying opportunities.
Yesterday was another good day, a 4% rise with 476,738 shares traded.
It again shows how the share price could rise quickly if we had significant buyers but to put it in perspective, yesterday only 0.23% of the shares in issue were traded.
The buyers yesterday were retail investors and some will be part of the “buy on rumour, sell on news” brigade.
With an update due there is increased appetite for the shares but even if the update is good some will sell, it is just how they operate. I have seen so many companies recently announce good news and the share price falls, it is just an investment strategy that some follow, buy on the rise and sell on the news. If they are making money good luck to them.
A strong update from SDX however should generate increased interest and that should offset any selling.
As things are I am quite happy for the update not to be released for a couple of weeks because the anticipation is generating interest and the management cannot stop investors buying even if they wanted to.