SDX has announced that the discussions with BP re a significant package of assets have been terminated by ‘mutual agreement' and the suspension of the shares has been lifted.
Paul Welch, CEO said he was ‘clearly disappointed that the transaction had not materialised' and that ‘we are screening potential deals all the time'. He added that, ‘we know that there will be others to fast track our stated goal to be a North African focused E&P of scale and that we will continue to build value from our existing business ‘.
Whilst disappointed, I'm sure that the SDX team will not only continue to build the business in Egypt notably with South Disouq coming on stream by the end of the year but also to find other add-on opportunities. In Morocco the outlook for next year is equally bright and highly profitable with high margin production building and an exciting exploration programme in prospect. Accordingly SDX remains an outstandingly cheap stock and a worthy member of the bucket list.
Very good news to report from down under this morning from Far who have announced that the Stena Drillmax drillship has begun its journey to the Samo prospect in Block A2, The Gambia to drill the Samo-1 exploration well.
The well is aiming for two key reservoir intervals assessed to contain a combined natural resource of 825m bbls of oil. Good quality reserves have been interpreted at both levels at the Samo-1 well location and the well is to be drilled near the crest of the structure.
The well is expected to commence ‘within a couple of weeks' and will take approximately 40 days to complete followed by wireline logging. Far, following the farm-out to Petronas has a 40% interest and is carried for the cost of drilling up to a cap of $45m.
Being so close to the world class discovery in Senegal Far has, unsurprisingly, seen ‘world-wide interest' in this well as The Gambia is one of the hottest postcodes in West Africa at the moment. Any discovery here would dwarf the current market cap of A$628m and at a price of A11c at the moment the upside would undoubtedly breach my target of A35c. No wonder the mood in the Far office is of intense excitement as the denouement of the programme approaches.
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