SDX Energy Inc. (SDX.L)

Their main area is Egypt. Producing 1600 BOEs a day. The stock trades effectively at cash value, so you are paying nothing for the reserves they are producing, the upside from the Meseda play and the work they are doing in South Disouq. It is cheap. For small-cap investors it is a very undervalued security, but we have to see much more robust pricing, and recovery will take much longer than it will for the big caps.

Egypt. No debt. Potentially drilling at the end of the year a high impact play. They have another play they are doing 3D seismic on this year and could start drilling in 2015. They have upside, but it will be quiet for the next 6 months.

This one is in the penalty box. It operates out of Egypt. Have hired a new president. This is a work in progress. Has an NAV of around $0.17. Egypt seems to be a place that is still in turmoil but he doesn’t think it is getting any worse. Where they have been producing is off the beaten track, not in Cairo. Just picked up a new property in the Gulf of Suez which should be quite interesting. We are approaching the tax loss selling season, so a lot of people may be selling, which could offer an opportunity for anyone interested.

Are the problems in Egypt affecting this company? Company is doing just under 2000 BOE’s a day so production site is not a problem. Apache (APA-N) is also in Egypt and doing very well. Operationally there are no issues because the areas where the company’s work is, is so far away from the problems. The key is that they want to drill some high impact wells. Have a new PSC which takes them in the Western Desert where there have been some home runs. Until they get the go-ahead to drill Shukheir Marine and to move forward with seismic in drilling in the PSC, the stock is going to be held back. Very cheap on a multiple basis but it needs a catalyst and that may not happen for many, many months.