Edison Investment Research - Sea Dragon Energy Inc (SDX) Raising accelerates growth potential

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Edison Investment Research

Will Forbes

Raising accelerates growth potential

SDX has announced a £10m equity raise targeting an accelerated exploration and development well programme (in addition to its existing aggressive work programme). Two wells in Egypt will target the largest prospects close to South Disouq and aim to de-risk up to 150bcf (P50) of the prospective resources, and enable SDX to right-size the production facilities for the most economic development. In Morocco, two further wells will target around 2bcf of gas that can be quickly developed and sold at high netback prices. As such, the £10m (65% underwritten by the largest shareholder) will go entirely to growth projects that have high IRRs/NPVs, and speed up the exploitation of its development resources. The company remains in strong financial health, but the additional capital will add further momentum to realising value from the portfolio. We will update our forecasts and valuation in coming days, which currently stand at 55p/share (core NAV) and 67p/share (RENAV).

06/09/2017 2 EN

Underlying

Sea Dragon Energy Inc

SDX Energy is engaged in the exploration, acquisition, development and production of oil and natural gas in Africa and Egypt. As of Dec 31 2010, total gross proved reserves for light and medium oil consisted of 3,593 thousand barrels ("mbbls"), natural gas liquids consisting of 211 mbbls and natural gas consisting of 2,575 million cubic feet.

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CA78410A1075 Canada

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Will Forbes

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Raising accelerates growth potential

SDX Energy - Termination of coverage

SDX Energy - In an enviable position in the sector

SDX Energy - Sobhi sole risk delivered a commercial discovery

Record - AUME momentum and a sharper focus

Actinogen Medical - Funding in place through key catalysts

Henderson Opportunities Trust - A differentiated exposure to smaller companies

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