SDX Energy - Morocco - a simple, low-cost operation with growth
Key takeaways from SDX’s analysts’ site visit to Morocco include the asset’s operational simplicity and low operating costs. Realised gas prices averaging $10/mcf combined with a 10-year tax holiday drive unit netbacks in the $8.5-9.0/mcf range. Demand growth potential in Kenitra, the fourth largest industrial town in Morocco, was very visible with the emphasis on SDX to grow the company’s gas resource base in order to underpin contract base expansion. SDX’s 2017/18 well programme should go some way to deliver on a 2018 production target of an 8-10mmscfd exit rate, and we estimate the market could support an incremental 10-11 wells of gas resource in 2019/2020. We have increased our core NAV from 52.5p/share to 58.3p/share (+11%) and RENAV from 64.0p/share to 65.6p/share (+3%).
- Unlock all research summaries
- Follow top, independent analysts
- Receive personalised alerts and emails
- Access Briefings, Analytics, and Events
Upgrade anytime to our paid plans for full-length research, real-time analyst discussions, and more.
Join a thriving community of 45,000+ investors, including the top global asset managers managing over $13trn in assets.
- SDX Energy - Morocco - a simple, low-cost operation with growth30 Jan 2018