Proactive Investors
Cantor Fitzgerald sees SDX Energy’s valuation as “unchallenging” and believes there is potential for a rerating to the share price.
Cantor rates SDX as a ‘buy’ and it has a price target of 64p.
Drilling success has seen SDX Energy Inc (LON:SDX) strengthen its position as the only independent gas supplier in Morocco, according to broker Cantor Fitzgerald.
The company is now deep into a nine-well drilling programme onshore Morocco.
“SDX is embarking on its most active drilling programme to date, with fifteen wells, seven workovers and a new 3D seismic shoot planned across the portfolio,” said Ashley Kelty, Cantor Fitzgerald analyst.
“This should see both production and reserves grow, whilst also offering transformational upside from the exploration wells, targeting 150bcf (83bcf net) at South Disouq in Egypt.”
Kelty added: “Production is projected to nearly double in 2018 to 8-10mmcfd, and we would also expect reserves to be increased following the recent success.
“With an active drilling programme in 2018 across Egypt and Morocco, we believe the market has yet to wake up to the near term growth potential from the asset base.”
The Cantor analyst sees the company’s valuation as “unchallenging” and believes there is potential for a rerating to the share price.
The broker rates SDX as a ‘buy’ and it has a price target of 64p.
