SDX ENERGY INC SDRYF

RE:SDX Thread in the UK about the deal with BP

[CoreyB]

Excellent points by poster named Small_Holding.  If it is a loan through BP for repayment through production, this would be much better than massive dilution for financing:

Having slept on it and read other investors comments

1. Strategically BP wants to sell off its mature inland Egyptian oil assets.

2. Financially BP can afford to sell these assets below their true market value to attract buyers.

3. As it would be a reverse takeover BP could assist SDX by providing financial assistance, as the tweet says “The UK major would provide a loan to London-based SDX of about $300 million in exchange for oil from the fields”

4. Comparisons are being made with the BP/Serica Energy deal relating to assets in the North Sea. BP ensured the terms of that deal were attractive to Serica by accepting deferred payment, taking payment by instalments from cash flow over a number of years, as part of the deal BP entered into sales agreements to off-take gas and oil at market terms and Serica were able to complete the deal without having to raise equity finance. Presumably any proposed deal would have similar attractive benefits to SDX.

5. The strategy of the SDX board is to build the business up to a certain level and then sell it. The expected timeline for that was originally talked about as a three to five year plan. If a deal is done with BP of the scale that is being talked about then, assuming SDX want to exit at a certain level, that timeline would be reduced overnight.

6. SDX has been undervalued for sometime and a re rating is overdue. If this deal goes ahead it will increase shareholder value or PW and the board won’t agree to it. This deal could well be the catalyst to take the SDX share price to a more realistic level.

7. From a personal point of view, the fact that it is BP and not some oil company I have never heard of gives me more confidence and I have faith in PW as a CEO, so if they agree a deal in principal and PW recommends it to the shareholders as a good deal, then I would trust his judgement and vote in favour.

8. If it is indeed the Gulf of Suez Petroleum Company (Gupco) assets, The BP/ EGPC JV produces over 70,000 bpd of oil and 400 Mmcf/d of gas. The business is estimated to be worth around $500 million.

The acid test, if SDX were not suspended, knowing what you know now would you buy more today at 59p?