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SDX recovery uninspiring

Oil and gas company still struggling after BP asset flirtation
August 27, 2019

SDX Energy (SDX) has seen a precipitous drop in value since last year, and is worth a third of what it was in August 2018.

IC TIP: Sell at 22p

That turnaround from consistent valuation growth came from the futile quest to buy BP’s (BP.) stake in the Gulf of Suez Petroleum Company. The focus after the failed transaction has been getting first gas out of the Disouq project in Egypt, which is expected before the end of the year, and exploration in Morocco. SDX said a central processing facility for Disouq had cleared customs in the first half and was on its way to the site. 

At the same time, the company’s production went up year-on-year for the first half to an average of 3,539 barrels of oil equivalent per day. Revenue was flat on lower prices and depletion, depreciation and amortisation knocked off $11.9m in the period, double last year. This left SDX with a total loss of $400,000.