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Proactive Investors One2One Forum
February 9, 2017 SDX LN / SDX CN
High Margin Growth – Just Getting Started
SDX Energy Inc.
SDX Energy – High Margin Growth Opportunity
• High margin onshore production and development assets with transformational exploration
upside
• AIM and TSX-V listed (TSXV: SDX/ AIM:SDX) • Successful secondary listing and capital raise on AIM in May 2016
• Attracted new institutional backers and strong after market
• High margin production:
• Cash flow positive to US$21/bbl Brent (at the corporate level)
• Current net production of 4,705 boe/d, 12.03 MMBOE of 2P reserves (31/12/15)
• Development potential to double production and triple reserves (Meseda)
• High impact and funded exploration program underway
• Solid balance sheet as of 31 January 2017:
• US$ 42MM of Working Capital (US$ 18.3MM in Cash)
• No debt
• Well placed to capitalise on distressed asset opportunities in North Africa
Page 2
Acquisition of Circle Oil Plc Assets in Egypt & Morocco
Page 4
• Buying Circle Oil’s subsidiaries in Egypt and Morocco debt free, from ‘distressed’
Strategic Review process • Debt holders owed: c.US$77.5MM
• Price: US$30MM (39 cents/US$ on group debt)
• Assets:
• Egypt: • 40% of North West Gemsa Concession
• Net Production: 2600 boepd
• 2P Reserves: 3.77 Mmboe
• Net back: US$17.24/boe (Brent price US$58.40/bbl)
• Morocco: • 75% of Sebou Production & Lalla Mimouna Exp. Concessions
• Net Production: 4.5 MMscfd (750 boepd)
• 2P Reserves: 0.92 Mmboe
• Net back: US$52.25/boe (Brent price of US$58.40/bbl)
• Working Capital: US$18MM
• Totals: • Production: 3350 boepd
• 2P Reserves: 4.69 Mmboe
• Avg. Net back: US$24.11/boe
• Acquisition Price: US$6.40/boe (US$2.56/boe excl. W Cap)
: US$8,955 per flowing boe (US$3,582 per flowing boe excl. W Cap)
1 2
Benefits of the Transaction
Page 5
• Adds new High Margin asset in Morocco and consolidates existing High Margin asset in Egypt
• Expected to increase daily production by 247%, 2P Reserves by 64% & Cash flow by
cUS$22MM in 2017 and c.US$27MM 2018. Acquire US$18MM of Working Capital
(US$2.0MM cash and cUS$16.0m net receivables)
• Very Attractive Expected Acquisition Metrics : • Payback: 1.4 years (at current Brent Strip prices)
• IRR: 82%
• Highly Accretive:
• EV/2P BOE (Net): 15%
• EV/2016 Boed: 44%
• 2016 Production/Share: 26%
• NAV/Share: 34%
• Excellent strategic fit with current business:
Egypt
• Circle acquisition adds 40% of asset where SDX already holds 10%
• Increasing exposure with no additional increase in staffing or overhead
• Can substantially improve upon Circle’s payment record
• Improves the ability to influence operator
Morocco
• Provides diversification and an additional revenue source
• Growth potential in a high margin gas market
• Undercapitalized Circle could not capture low hanging upside
• Expands the exploration portfolio
Post-acquisition Illustrative Capex and Cashflow summary
Page 6
Operating cashflow uses Brent Fwd Curve US$58.40 & US$58.25 in 2017 & 2018 and no cash inflow from W. Capital reduction Circle Oil Morocco 2017 & 2018 Operating cashflow modelled at current run rate Circle Oil Egypt 2017 & 2018 Operating cashflow uses Operator’s proposed 2017 budget as basis SDX 2017 & 2018 Operating cashflow uses Operator’s proposed 2017 budgets as basis 2017 capex: 2 Dev & 2 Exp wells in Circle Oil Morocco & 2 Exp & 2 Dev wells plus facility expansion & w/flood in Meseda Egypt 2018 capex: 2 Dev wells in Circle Oil Morocco and 2 Dev wells in NW Gemsa (Circle Oil 40%/SDX 10%) Egypt
Assumptions
Why Egypt? Geology & Operating Environment
One of the best E&P Fiscal Regimes
• Royalty Rate – 5%
• Corporate Income Tax Rate – 30%
• 10 year tax holiday from start-up
Moroccan Gas Market – High Prices • Gas market is dominated by compressed natural gas
suppliers or “Bottled Gas”
• Bottled gas prices, for largest industrial customers,
average $18.00/MCF
• No local or national gas grids exist within Morocco
• Gas supplied by Circle sells for $8.10 - $9.90/MCF
Gas Demand Significantly Exceeds Supply • Currently more customers than COP can supply
• Industrial customers using COP gas have significant
price advantage in energy supply when compared to
bottled gas customers
• Pressure on government to locally raise gas prices to
reduce commercial advantage of COP customers
Dominant Commercial Position • COP owns 75% of the only private owned pipeline
• Connects producing basins to the industrial market
• Any future discoveries will likely have to pass through
COP’s line to be commercialized.
Page 8
Multiple world class hydrocarbon basins • 3 Basins in the Top 10 (MENA)
• W. Desert 3rd best value creator over the last 10 years
• Zohr discovery 22+TCF (4 Billion bbl equivalent) largest
discovery globally in 2015
Excellent operating environment • Competitive fiscal terms combined with low opex
• Operating Costs are still dropping • Egyptian currency depreciated 50%+ vs $USD
Historic pay-out backlog clearing • Government pledged to clear balance by end 2017
Economy stabilising • Government has removed currency controls and
“floated” the Egyptian pound in the market
• IMF US$12 Billion loan terms agreed, first US$2.7 Billion
dispersed • Improved the availability of the USD$ in the economy
Local gas prices increasing • Domestic gas market significantly underserved
(importing LNG @$6-$10/Mmbtu)
• Long term demand not satisfied by Zohr alone due to
demand growth and natural declines in existing fields
Why Morocco? Commercial terms & Gas Market
Assets - Egypt
Page 10
Exploration
Production & Development
Production
Development
SDX – 55% WI & Operator
SDX – 50% WI & Joint Operator
SDX – 10% WI, Rising to 50% post transaction
SDX – 12.75% WI
Egypt– Production Assets
• Very Low Cost Production Base: <$10/bbl
• Onshore
• Low Capex Spend Going Forward
• North West Gemsa
• Gross Daily Production: 6,510 BOEPD
• Equity Interest: 50%
• Net 2P Reserves: 4.7 Mmbo (31/12/15)
• Operating Cost: $7.38/bbl, Netback: $17.24
• SDX Capex – 2017: $1.75MM
• Meseda
• Gross Daily Production: 4,250 BOEPD
• Equity Interest: 50%
• Net 2P Reserves: 6.4 Mmbo (31/12/15)
• Operating Cost: $8.44/bbl, Netback: $23.78
• SDX Capex – 2017: $4.8MM
• Plans to 2X production by Q2 2017
Assets significantly cash flow positive
Page 11
Egypt – Exploration Asset - South Disouq
55% Working Interest (Operator)
1,275 km2 Concession area
585 BCF (P Mean) Gross Prospective Resources
6.4 TCF &
100 Mmboe Rec. Volumes within Abu Madi Baltim Trend (IHS)
65 km north of Cairo within prolific Abu Madi – Baltim trend
Located within existing oil and gas transport infrastructure
Main gas, condensate and oil lines transect block
Prospects are 5 & 11 kms from connection points
1st period work commitment: 300km2 seismic & 1 well
Successful farm out to IPR for 45% – carries Exploration
Well cost (subject to a cap of $3MM)
Abu-Madi – Baltim Trend
2017 WORK PLAN
Complete interpretation of 300 km2 3D seismic data
Drill Exploration Well – Q1 2017
Initiate fast track development program (assuming
successful exploration) into local infrastructure
Page 12
South Disouq Top Abu Madi Structure Map
• Seismic data confirms Abu Madi
play fairway extends into SDX
Acreage
SD-1X Abu Madi Prospect
SD Deep-1X Abu Roash/AEB
Prospect
Map area shown in inset
South Disouq Survey Area
Page 13
SD-1X Abu Madi Prospect
• Robust ~1000 acre four-way dip closure mapped on seismic data
• 175’ of structural closure at Abu Madi level
• Positive AVO response reduces risk of not
encountering reservoir
• Deeper potential identified in Abu Roash and AEB zones which are prolific Western Desert oil producers
Incr
easi
ng
Res
ervo
ir Q
ual
ity
Extent of SD-1X closure
SW NE
SD-1X
Page 14
Morocco – Production Assets
Sebou Permits - Production • Working interest: 75% & Operator (Partner: ONHYM 25%)
• Located in Rharb Basin
• 134 km2 area covered by 3D seismic
• Currently producing 6.2 MMscf/day (1,033 boepd)
• Connected to sales by new 8” pipeline
Lalla Mimouna Permit - Exploration
• Working interest: 75% & Operator (Partner: ONHYM 25%)
• Located in Rharb Basin
• 2,112 km2 concession area,154 km2 covered by 3D seismic
• Adjacent to Sebou permit with existing gas sales line
Page 16
Morocco - Sebou Permit Production Profile
Customer PRICE PRICE FROM UNTIL MAD/M3 US$/MCF
SUPERCERAME 2.85 8.1 19/12/2011 18/12/2016
SUPERCERAME (New contract) 3.50 9.9 01/01/2017 31/12/2021
CMCP 2.80 7.9 01/01/2016 31/03/2017
CMCP (Future contract) 2.85 8.1 01/04/2017 31/03/2018
PORCHER (Potential) 4.25 12.0 5 Year ---
PORCHER 3rd Party ((Potential) 4.25 12.0 5 Year ---
PEUGEOT(Potential) 4.50 12.7 10 Year ---
Moroccan Gas Sales
- Currently selling 6.2 MMscfd (gross) at
an average price of US$9.00/MCF
- Local gas price is based upon alternative
supply which is imported compressed
natural gas or “bottled gas” at
US$18.00/MCF
- Gas is sold directly to local industrial
users (mainly ceramic manufacturers)
- Local gas demand significantly outstrips
supply
- Significant pressure by industry to find
more gas to connect additional users to
reduce manufacturing cost advantage
current customers are realizing
- Future gas price contracts are
anticipated to increase to as much as
based upon MOU signed by Porcher for
$12.00/MCF
Page 17
Gas Contracts
Historic Production Future Forecast
Morocco - Rharb Basin: Regional Exploration potential
Page 18
• Regional basin architecture well
understood from extensive 2D
seismic framework
• Prospectivity established in multiple
horizons throughout Miocene-aged
strata
• Potential for material upside
discoveries through 3D seismic
acquisition
• Potential to expand acreage footprint
to adjacent open acreage
Seismic Anomaly
2D Seismic Line
Concession Boundary
3D Seismic Survey
Lalla Mimouna Nord
Lalla Mimouna Sud
Exploration Potential: Seismic Anomalies
Amplitude analysis suggest the presence
of several gas-filled sand bodies across
the area • Similar response to Sebou Permit
Five amplitude-supported prospects
mapped in 3D seismic area • 13.2 BCF* of unrisked recoverable gas
Multiple target horizons creates potential
for stacked pay
Amplitude-supported Prospects
*Circle Oil internal estimate of middle-range recoverable volumes
Page 19
2
2
EGYPT – THE CASE FOR CONSOLIDATION
Several large players focused on gas (primarily offshore)
Many (20+) small and medium sized companies that are focused on oil (primarily on shore) Too small to prosper in the current environment These are the targets (see next page)
Company NPV10, NPV10/boe and net reserves
Page 21
Eni
BP
Apache
Sinopec Shell
Edison Kuwait Energy
Company Merlon DEA
Dana Gas
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
0.00 2.00 4.00 6.00 8.00 10.00 12.00
Rem
ain
ing
PV
(10%
) U
S$ (
millio
n)*
Remaining PV/boe (US$/million)* Source: Wood Mackenzie
*Discounted to 1st January 2016
= 500
mmboe
Liquids
Gas
Egypt - the consolidation opportunity set
Page 22
More than half of the companies identified above looking to exit or reduce exposure Numerous public and private sales processes on going Financial markets mostly shut for smaller companies to raise equity or debt Many companies caught by a potentially “toxic” combination of: - Egyptian receivables - USD denominated debts - US Dollar shortage in country Two companies have already failed, several others are teetering Buyer’s market
Top 11 to 30 companies by remaining value and reserves
Expected Activity Timetable – 2017
Active Program in 2017 Forecast - High Impact Exploration well in South Disouq (well cost carried) - Significant Development & Exploration Potential in Meseda - Low Capex Program in NW Gemsa – Maintain Production Levels - Exploration Tests in Morocco (Lalla Mimouna) Page 24
Field Activity
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
NW Gemsa8 Well Workover (Producers)
4 Well Workover (Injectors)
Meseda
Facilities Upgrade
5 Well Workover Program
Infill Producer -1
Infill Producer -2
Exploration Well - 1
Exploration Well - 2
S. DisouqInterpretation
Exploration Well (SD-1X)
S. RamadanDevelopment Option Review
FarmOut/Relinquish
Development Well 1
Lala Mimouna
Exploration Well - 1
Exploration Well - 2
Explo Prod Injector Facilites Workover Studies Contingent
2017
EGYPT
Morocco
Current NAV – Using Brent Forward Curve
Page 25
Core NAV £0.65/share
US$ 0.79/share C$ $1.04/share
Exp Upside £0.19/share
US$ 0.24/share C$ 0.32/share
RENAV £0.84/share
US$ 1.03/share C$ 1.35/share
Brent Fwd. Curve
Year US$/BBL
2017 $58.40
2018 $58.25
2019 $57.85
2020 $58.05
2021 $58.61
2022 $59.17
2023 $59.85
Base
Base +, Workovers, Waterflood
Base
@ Jan 3, 2017
FX rates: USD/CAD: 1.32, GBP/USD: 1.24
Current trading at a 32% Discount to Core NAV & a 47% Discount to RENAV
Operations Value:
6 Concessions, 3 Operated
4,705 boepd production (net)
High impact prospects in Egypt
Delivering on Objectives
• Grow a profitable mid-tier E&P company in North Africa via an aggressive organic and
inorganic growth strategy that delivers superior returns to shareholders
• Near Term: Achieved – 7 Months from AIM listing • Development of existing high margin production base: Underway
• Increase margins by further opex reductions: Increased by 9.3%
• Initial target of net 3,000 boepd: Increased to 4,705 boepd (pro forma)
• Medium Term: 94% Complete
• Execute high impact Exploration: 3D Complete, Drilling in Feb 17
• Capture new opportunities either asset or corporate: Circle Oil Deal
• Target of net 5,000 to 7,000 boepd: 4,705 boepd and growing
• Long Term: Making Significant Progress
• Material growth in Egyptian & Moroccan gas businesses
• Execute “Roll –Up” strategy within MENA
• Target of net 25-30,000 boepd
Page 26
Advisory Forward-looking Statements
This presentation and any additional documents handed out at the meeting (together the “Presentation Materials”) contain certain
statements or disclosures relating to, among other things, SDX Energy Inc. (“SDX”), its proposed private placement (“Private Placement”)
and its proposed acquisition (the “Acquisition” and, together with the Private Placement, the “Transactions”) of certain subsidiaries of
Circle Oil Plc (“Circle Oil”) which constitute “forward-looking statements” as such term is used in applicable Canadian securities laws. Any
statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions
or future events or are not statements of historical fact should be viewed as forward-looking statements. In particular, statements
concerning SDX, the Transactions, the anticipated benefits that will result from the Transactions and the key characteristics of SDX or of the
assets to be acquired in the Acquisition should be viewed as forward-looking statements.
The forward-looking statements contained in this document are based on certain assumptions and although management of SDX consider
these assumptions to be reasonable based on information currently available to them, undue reliance should not be placed on the forward-
looking statements because SDX can give no assurances that they may prove to be correct. This includes, but is not limited to,
assumptions related to the ability of SDX to receive, in a timely manner, the necessary regulatory, stock exchange and other third party
approvals, the ability of SDX to satisfy, in a timely manner, the other conditions to the closing of each of the Private Placement and the
Acquisition and expectations and assumptions concerning, among other things commodity prices and interest and foreign exchange rates;
planned capital efficiencies and cost-savings; applicable tax laws; future production rates; the sufficiency of budgeted capital expenditures
in carrying out planned activities; the availability and cost of labour and services; the production capacity of SDX’s current and future assets
and those to be acquired pursuant to the Acquisition; the reserves and resources potential of SDX’s current and future assets and those to
be acquired pursuant to the Acquisition; future cash flow projections; the exploration potential of SDX’s current and future assets and those
to be acquired pursuant to the Acquisition; expectations for being paid in full and on time in the future; future operating expenditures; near-
term, medium-term and long-term projections for SDX; the benefits of the Transactions; future cost reductions; the economic and political
environment in Egypt and Morocco; oil and gas commodity prices; SDX’s development and exploration potential, including the success of
workover, infill drilling and waterflood extraction techniques and the costs and benefits related to same; risk and success potential related to
future drilling locations; Egyptian and Moroccan demand for oil, gas and LNG products; timing of capital expenditures including the drilling
of wells and costs associated with same; results of seismic programs; the relative price of assets and the financial status of buyers and
sellers in the Egyptian and Moroccan markets; opportunities related to legacy payment issues; the timing of the Transactions; and
completion of the Transactions. The anticipated dates provided may change for a number of reasons, including unforeseen delays in
preparing materials, investor demand, inability to secure necessary regulatory, stock exchange or other third party approvals in the time
assumed or the need for additional time to satisfy the other conditions to the completion of either the Private Placement or the Acquisition.
By their very nature, forward-looking statements are subject to certain risks and uncertainties (both general and specific) that could cause
actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Such risks and other
factors include, but are not limited to the timing of the Transactions, requisite approvals of the TSX Venture Exchange and the London
Stock Exchange, political, social and other risks inherent in daily operations of SDX, risks associated with the industries in which SDX
operates in general, such as: operational risks; delays or changes in plans with respect to growth projects or capital expenditures; costs
and expenses; health, safety and environmental risks; commodity price, interest rate and exchange rate fluctuations; environmental risks;
competition; failure to realize the anticipated benefits of the Acquisition; ability to access sufficient capital from internal and external
sources; and changes in legislation, including but not limited to tax laws and environmental regulations. There is a risk that SDX fails to
satisfy the conditions to either the Private Placement or the Acquisition which may result in such Transaction not being completed on the
proposed terms, or at all. Readers are cautioned that the foregoing list of risk factors is not exhaustive and are advised to reference SDX’s
Annual Information Form for the year ended December 31, 2015, which can be found on SDX’s SEDAR profile at www.sedar.com, for a
description of additional risks and uncertainties associated with SDX’s business, including its exploration activities.
No representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by SDX or by any
of its respective officers, servants or agents or by Cantor Fitzgerald Europe Limited (“Cantor Fitzgerald”) FirstEnergy Capital Limited
(“FirstEnergy”) or Stifel Nicolaus Europe Limited (“Stifel” and together with Cantor Fitzgerald, and FirstEnergy, the “Bookrunners”) any
other person as to or in relation to the accuracy or completeness of the Presentation Materials or the information or opinions contained
herein or supplied herewith or any other written or oral information made available to any interested party or its advisers and, to the fullest
extent permitted by law, no responsibility or liability is accepted for the accuracy or sufficiency of any of the information or opinions, for any
errors, omissions or mis-statements, negligent or otherwise, or for any other communication, written or otherwise, made to anyone in, or
supplied with, the Presentation Materials or otherwise in connection with the proposed sale of the Investor Interest. In particular, no
representation or warranty is given as to the achievement or reasonableness of any future projections, management estimates, prospects
or returns.
The forward-looking statements contained in this presentation are made as of the date hereof and SDX does not undertake any obligation
to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking
statements contained herein are expressly qualified by this cautionary statement.
Reserves Data
The determination of oil and natural gas reserves involves the preparation of estimates that have an inherent degree of associated
uncertainty. Categories of proved, probable and possible reserves have been established to reflect the level of these uncertainties and to
provide an indication of the probability of recovery. The estimation and classification of reserves requires the application of professional
judgment combined with geological and engineering knowledge to assess whether or not specific reserves classification criteria have
been satisfied. Knowledge of concepts including uncertainty and risk, probability and statistics, and deterministic and probabilistic
estimation methods is required to properly use and apply reserves definitions. The recovery and reserve estimates of oil reserves
provided herein are estimates only. Actual reserves may be greater than or less than the estimates provided herein. Terms related to
reserves classifications referred to herein are based on definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook
(“COGE Handbook”) and are in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.
In relation to SDX’s assets, “Proved reserves” are those reserves that can be estimated with a high degree of certainty to be
recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. “Probable reserves” are
those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. The qualitative certainty levels
referred to in the definitions above are applicable to “individual reserves entities”, which refers to the lowest level at which reserves
calculations are performed, and to “reported reserves”, which refers to the highest level sum of individual entity estimates for which
reserves estimates are presented. Reported reserves should target the following levels of certainty under a specific set of economic
conditions:
• at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves. This
category of reserves can also be denoted as 1P;
• at least a 50 percent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus
probable reserves. This category of reserves can also be denoted as 2P; and
• at least a 10 percent probability that the quantities actually recovered will equal or exceed the sum of the estimated proved plus
probable reserves. This category of reserves can also be denoted as 3P.
Additional clarification of certainty levels associated with reserves estimates and the effect of aggregation is provided in the COGE
Handbook. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all
properties, due to the effects of aggregation.
Use of the term “boe” may be misleading, particularly if used in isolation. A “boe” conversion ratio of 6 Mcf: 1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Certain volumes provided in this presentation represent a pro forma arithmetic sum of multiple estimates of proved plus probable
reserves, or proved plus probable plus possible reserves, which statistical principles indicate may be misleading as to volumes that may
actually be recovered. Readers should give attention to the estimates of individual classes of reserves and appreciate the differing
probabilities of recovery associated with each class as explained in the annual oil and gas disclosure filings of SDX (available on
www.sedar.com) and the effects of arithmetic aggregation. Factors that could affect the accuracy of the reported pro forma aggregated
reserves estimates include company level differences in evaluation effective dates, reservoir characteristics and pricing assumptions.
Reserves information in this presentation relating to SDX’s assets are based on the independent reserves evaluation of the Preliminary
Competent Person’s Report as of December 31,2015 on certain properties owned by SDX Energy Inc. in Egypt prepared by DeGolyer
and MacNaughton Canada Limited .
Reserves information in this presentation relating to Circle’s assets in Morocco are based on a draft independent reserves evaluation of
the Competent Person’s Report as of July 1, 2016 on certain properties owned by Circle Oil in Morocco which is being prepared by
Senergy (GB) Limited and which is being prepared in accordance with the 2007 Petroleum Resources Management System prepared by
the Oil and Gas Reserves Committee of the Society of Petroleum Engineers and reviewed and jointly sponsored by the World Petroleum
Council, the American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers. The draft numbers are
subject to updating and the final report to be published in connection with the acquisition.
Information about the Circle Oil Group, its assets in Morocco and the business environment in Morocco has, except where stated, been
taken from publicly available information and information supplied by Circle Oil and is based on the expectation of Circle’s management.
Page 29
Advisory • THIS PRESENTATION IS CONFIDENTIAL AND IS BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, FURTHER DISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR PART, FOR ANY PURPOSE,
WITHOUT THE EXPRESS WRITTEN CONSENT OF SDX.
• This presentation does not contain or constitute an offer to sell or a solicitation of an offer to purchase securities in the United States or any other jurisdiction. The securities of SDX have not been and will not be registered under the US Securities Act of 1933, as amended (the
“Securities Act”), or qualified for sale under the law of any state or other jurisdiction of the United States and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
The Company does not intend to register any securities under the Securities Act, and no public offering of securities in the United States will be made. In the United States, this presentation is directed only at, and may be communicated only to, persons that are “qualified
institutional buyers” as defined in Rule 144A under the Securities Act (such persons hereinafter referred to as “QIBs”).
• Neither this document, nor any copy of it, may be taken or transmitted into the United States (other than to a limited number of QIBs), Australia, South Africa or Japan or into any jurisdiction where it would be unlawful to do so. Any failure to comply with this restriction may
constitute a violation of relevant local securities laws. By receiving a copy of this presentation, you will be deemed to have represented to SDX, Cantor Fitzgerald and Stifel that you are a QIB.
• The information set out in these Presentation Materials will not form the basis of any contract. Any successful purchaser of an Investor Interest will be required to acknowledge in writing that it has not relied on or been induced to enter such agreement by any representation or
warranty, save as expressly set out in such agreement.
• The Presentation Materials have been delivered to interested parties for information only and upon the express understanding that such parties will use it only for the purpose set out above. SDX undertakes no obligation to provide the recipient with access to any additional
information or to correct any inaccuracies herein which may become apparent, and it reserves the right, without advance notice, to change the procedure for the acquisition of an Investor Interest or to terminate negotiations at any time prior to the completion of such acquisition.
The issue of the Presentation Materials shall not be taken as any form of commitment on the part of SDX to proceed with any transaction.
• The contents of this document have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA") for the purposes of section 21 of FSMA. The Presentation Materials are only being made available to the following:
• persons having professional experience in matters relating to investments and who are investment professionals as specified in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”); and
• persons to whom Article 49(2) of the Financial Promotion Order applies, being high net worth companies, unincorporated associations, partnerships or trusts or their respective directors, officers or employees as described in Article 49 of the Financial Promotion Order.
It is a condition of your receiving the Presentation Materials that you fall within, and you warrant to SDX and to the Bookrunners that you fall within, one of the categories of person described above.
• The Presentation Materials may contain unpublished price sensitive information or undisclosed material information with regard to SDX and/or its securities and Circle Oil and/or its securities. Recipients of the Presentation Materials should not deal or encourage any other any
other person to deal in the securities of SDX or Circle Oil whilst they remain in possession of such unpublished price sensi tive information or undisclosed material information and until the transactions described in the Presentation Materials are announced. Dealing in securities of
the Company or Circle Oil when in possession of unpublished price sensitive information or undisclosed material information could result in liability under the insider dealing restrictions set out in the Criminal Justice Act 1993 or the insider trading and/or tipping provisions of
Canadian securities laws. This document may contain information which is not generally available, but which, if available, would or would be likely to be regarded as relevant when deciding the terms on which transactions in the shares of SDX or Circle Oil should be effected.
Unreasonable behaviour based on such information could result in liability under the market abuse provisions of FSMA.
• Any prospective purchaser interested in acquiring an Investor Interest in SDX is recommended to seek independent financial advice. Law in certain jurisdictions may restrict the distribution of this document or of the giving of the Presentation Materials and any subsequent offer for
sale or sale of the Investor Interest. Persons into whose possession this document or the information from the Presentation Materials comes are required to inform themselves as to and observe any such restrictions.
• If the recipient does not fall within one of the categories above the recipient should either return, destroy or ignore the information in the Presentation Materials.
• Cantor Fitzgerald which is authorised in the United Kingdom by the FCA for the conduct of investment business is acting for SDX in relation to matters described in this document and will not be responsible in respect of such matters to any other person for providing protections
afforded to customers of Cantor Fitzgerald or for providing advice in relation to those matters.
• FirstEnergy which is authorised in the United Kingdom by the FCA for the conduct of investment business is acting for SDX in relation to matters described in this document and will not be responsible in respect of such matters to any other person for providing protections afforded
to customers of First Energy or for providing advice in relation to those matters.
• Stifel which is authorised in the United Kingdom by the FCA for the conduct of investment business is acting for SDX in relation to matters described in this document and will not be responsible in respect of such matters to any other person for providing protections afforded to
customers of Stifel or for providing advice in relation to those matters.
• If you are in any doubt about the investment to which the Presentation Materials relate, you should consult a person authorised by the Financial Conduct Authority who specialises in advising on securities of the kind described in this document.
• The following is a summary of the statutory rights of rescission or damages, or both, under securities legislation in Ontario, where such summary is required to be disclosed under relevant securities legislation and, as such, is subject to the express provisions of the legislation and
any related regulations and rules. The rights described below are in addition to, and without derogation from, any other right or remedy available at law to purchasers of the securities, subject to any applicable defences.
• Under Ontario securities legislation, certain purchasers resident in Ontario who purchase a security described in this document during the period of distribution will have a statutory right of action for damages, or while still the owner of the securities, for rescission against the issuer
if this document contains a misrepresentation without regard to whether the purchasers relied on the misrepresentation. The r ight of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the
cause of action and three years from the date of the transaction that gave rise to the cause of action. The right of action for rescission is exercisable not later than 180 days from the date of the transaction that gave rise to the cause of action. If a purchaser elects to exercise the
right of action for rescission, the purchaser will have no right of action for damages against the issuer. In no case will the amount recoverable in any action exceed the price at which the securities were offered to the purchaser and if the purchaser is shown to have purchased the
securities with knowledge of the misrepresentation, the issuer will have no liability. In the case of an action for damages, the issuer will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the securities as a result of the
misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser under Ontario securities legislation. These rights are not available for a purchaser that is: (a) a Canadian financial
institution, meaning either: (i) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act; or (ii) a bank, loan corporation, trust company, trust corporation,
insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a province or terr itory of Canada to carry on business in Canada or a province or territory of Canada; (b) a
Schedule III bank, meaning an authorized foreign bank named in Schedule III of the Bank Act (Canada); (c) "the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or (d) a subsidiary of any person referred to in
clauses (a), (b) or (c), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary. The foregoing is a summary of the rights available to an Ontario purchaser. Not all defences upon which
the issuer or others may rely are described herein. Ontario purchasers should refer to the complete text of the relevant statutory provisions.
Page 30
Board of Directors
Page 31
Dir
ecto
rs
Individual Position Experience
Michael Doyle Chairman Former CEO of PetrelRoberston Ltd; responsible for advisory & project management Principle and Director of several private and public companies
Paul Welch CEO & Director CEO of two public exploration and production companies, 15 years with Shell Developed Pioneer’s Tunisian portfolio from 500 to a peak of over 25,000 boepd
David Mitchell Director CEO of Madison, extensive Int. experience with BP and as a Director of Nexen Int. Captured and built projects in the Mid East, W. Africa, S. America and the North Sea
David Richards Director Managing Director, Network Capital Inc, a Calgary based investment company
Mark Reid CFO & Director Finance Director at AIM listed Aurelian and Chariot Oil and Gas Limited (2009-2015) Former Head of Oil and Gas in London for BNP-Paribas Fortis
Michael Raynes Director Former COO of Waha Capital, Abu Dhabi Held Senior Executive roles with other large investment firms
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