Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I’m inclined to agree to a certain extent, but when II’s see then opportunity cost of having capital tied up in a business where they can’t trade to another opportunity, particularly when in 2022 the NASDAQ is up more than 20%, II’s will be mindful of dead money taking oxygen from performance.
To me it looks like they want govt approval prior to even issuing the adm document given the wording this morning. In no deals have i seen approval needed prior to an adm document so perhaps that's SAVEs stipulation ?
From Trustilies AI article yesterday, i wonder where did AI pck up on completion expected in the next few weeks to print thar re S.Sudan -
"In the next few weeks, moreover, it is also expected to complete the purchase of the interests of Malaysia's Petronas group in South Sudan in an operation it announced in 2022."
I still don't think it necesarily means though that it could take right up to the 2nd April and could come through before that.
If there's already 2 years to be deducted from the settlement at 50k bopd using $20/b it's $30m/month or $720m to the end of December 2023 with another $90m this quarter to end of March imo. I still think that up to $250m may have been allowed for contingencies on higher oil prices and/or production rates spread over x years.
NtM - I agree and on reflection I retract that comment. I now think that if SAVE have made enough progress in country to be granted a 2 month extension by AIM, it’s probably enough progress for the finance provider/s (if we are taking debt on) to put all their wheels in motion. I genuinely think we have a decent chance of a Q2 completion now.
I'm fine wit this extension.. and if there's another similar duration one thereafter then ok by me too. Thereafter again probably sees me say it's realms of the ridiculous now though.
You add much value here RR. Thanks v much for all of it !
ps: I really identified with your - RR - post of 8.55 am.. but - also - somewhat strongly disagree with one part of it :
''By the way, should we get the in Country approvals by 2nd April, there is not a cat in hell’s chance we will be trading again before 1/7/24.''
Ian - I think quite the opposite. After all this time II’s will see huge growth and yield potential should SS close. They unlike PI’s in many respects but to mention 3:-
They don’t get bored
They don’t need to take cash off the table
They don’t forget the reasons they bought in
Yes there will PI’s who sell but I see far more demand if and when we land a big one.
And when we do close an incremental accretive deal I’m sure we will see a significant dividend initiated. AK has already previously mentioned $12m and $10m. This will be the number 1 reason II’s are still here and AK will now need to pay them back for their unwavering support as soon as the big fat lady sings!
Cavendish are joint brokers to the company, but have been largely silent since the suspension. They had been bulls of the company with a target price of 85p pre the SS deal.
All brokers and the NOMAD will need to play a crucial in the run up to the relisting, keeping the big institutions onside and potentially buyers of more stock.
My feeling is there may be a pent up order book of sell orders ( I’ve been an inadvertent large holder of this for too long and may want to rebalance) so if the SS deal is completed we’d need an orderly deal flow on both sides.
Until then, the waiting game continues.
Hi RR
Good colour on your chat from the NOMAD. Fingers crossed for all those projects you listed.
With reference to the Shore Capital note, they are just a sponsored broker, hence why their notes always have a disclaimer for investors to view it as marketing communication. ("This material is considered to be a marketing
communication and accordingly it has not been prepared in accordance with legal requirements designed to promote the independence of investment research nor is it subject to any prohibition on dealing ahead of the dissemination of investment research. This material is issuer sponsored and has been prepared pursuant to an agreement between
Shore Capital and the issuer in relation to the production of research".)
Thus would not attached too much significance to it.
The other brokers who seem to cover SAVE are "Cavendish" and "Hannam & Partners" who might be independent and not hired by Savannah directly however cannot see anything published by them (which I guess is not a surprise as we have no data/ financials to analyse!)
And a big fat juicy $50m distribution announced with a fx of 1.27 = BANG ON 3p per share or 18.2% based on my average buy price.
Tick tock…
TiL - thank you. and based on a 2 month further extension I see this as very positive. I spoke to the NOMAD in early Jan and AIM were asking for some very solid reassurances on significant progress being made in SS. If they did not get those strong reassurances, a further extension from today was highly debatable. We must have made progress in country.
If Shore are saying a realistic chance of AD in next 8 weeks, either the debt financiers are also happy with in country progress to incur their legal costs putting the deals together or as my previous note, we are not taking on debt for the deal.
Granted Shore will know some decent stuff to put that note together but we were also told from IR very clearly that Accugas debt re-finance deal would be closed before end of December 2023!!!
Anyway, based on where we are at, we could not have wished for a better note from Shore.
Return price on or before 8th April ……………………wait for it…………
89p
Thanks for your post RR, However i don't agree with your resumption date of 1.07.2024 for trading upon approvals, if we get approvals pre 2nd April we will be back up trading within days of admission doc submission in my opinion .
Noix - the main thing being worked on are the license extensions. In addition to those work streams, there are the finance packages, shareholder approval and SS gov approval.
K - yes I do agree finance in place before AD and readmission.
Whilst we all want to see this back ASAP, I too am pleased to see the further extension. Obviously my number one aim is to see the deal done and dusted. However, as TiL alludes to, I also see it like this.
The longer we see suspended, the better chance we have of the SP returning at a higher price even should the SS deal fail. Let’s say the deal failed today and we returned at a made up SP of 25p.
Now let’s say the deal fails in a few months time instead. By that time we would:-
Have a few more months of strong Accugas revenues reducing next debt, therefore pushing SP up.
Improved chance of seeing first oil in Niger and 35mboe moving from 2C to 2P
Possibility of an interim ruling on 4 court cases re Chad / Cameroon
Another M&A acquisition could be announced (or are we not allowed to announce due to everything else at the moment)
Accugas debt restructure may eventually get done in this window
Compression project in Nigeria completes and significant new gas customers possibly signed up
So if a few of those came in over the next few moths before deal fails, the SP would return at a premium compared to what it would be had the deal failed today.
So with all the World volatility and the vast amount of uncertainty we have, a few more months of suspension gives us a chance of some of our issues improving, whilst the Worlds issues will probably deteriorate even further with all the incompetent Governments we have making it all up as they go.
By the way, should we get the in Country approvals by 2nd April, there is not a cat in hell’s chance we will be trading again before 1/7/24.
Should we complete then we may have had 30 months of EI since 1/1/22 to take off the headline deal figure of $1.25bn. A mere $20 per boe equates to $913m leaving $337 to be found from future production deal and or debt and or cash.
At an economic interest of $27.38 per boe, the $1.25bn would be paid in full after 913 days from 1/1/22 = 1/7/24, ever likely AK is camping out in SS. Maybe he will return with a net worth higher than EM!
PS Shore Cap have just issued a note, does anyone have access to it?
Savannah Energy+ (SAVE, Suspended, Under Review)
South Sudan acquisition update
In a short RNS this morning, Savannah has confirmed that (further to its prior announcements) the company continues to advance the various workstreams – including the receipt of relevant approvals in-country – required to complete the acquisition of PETRONAS International’s South Sudanese portfolio.
Regarding this major proposed reverse takeover transaction, Savannah reports today that AIM has granted a further extension to 2 April, with subsequent updates to be provided as and when appropriate.
Given the further eight-week extension that has now been secured, regarding this obviously significant transaction, we believe that publication of the related AIM admission document can be very realistically expected within this newly updated timetable – and will look forward to further news in due course.
Whilst acknowledging that publication of the admission document (relating to the South Sudanese reverse takeover deal) had originally been expected to occur at an earlier stage, we continue to sense that Savannah is pressing on to ensure that this can occur as soon as possible – noting AIM’s granting of the further extension announced today.
We will obviously continue to look forward to admission document publication, at which point we will be in a position to fully assess the incoming South Sudanese assets. Whilst the shares will naturally remain suspended ahead of this, we continue to forecast material organic revenues and cash flow in the meantime. Our last-published Risked NAV estimate stands at 45p/share.
Not sure of the answer to that PF. I'd imagine they need both, approvals from the varioul ministries plus the overall approval of the govt., but happy to be corrected. Either way, I do think that the extension shows that the powers that be (AIM, Nomad) have been convinced that the transaction still has a good chance of completing.
RR, for the AD doc. to be published I'm pretty sure that the finance workstream would need to be completed. You would have thought that any new timeframe given by SAVE i.e. 2nd April would include that as well. At some point I would expect the financiers will be satisfied that things can re-commence and that the end date reflects that.
Needless to say not happy how AIM has let them of the hook again. What workstreams ? How long can they be allowed to push this out ? end of 2024 ? I don't think they would get away with it on main market.
Is “approval of the Government of the Republic of South Sudan” the same as “receipt of in-country approvals”. Has Government approval been granted and we now await other “in-country approvals”?
Komakino
I believe it's flagged government approval as the main (not necessarily the only) sticking point.
I'd like to think that pretty firm verbal assurances have been given, otherwise why prolong the agony.
My thought when I saw that included Noix, was that it was a simply a little more information for shareholders indicating that we won't see the AD until they have secured the in-country approvals. The update today was fine with with me. I know others want to recommence trading and have access to their cash, which is understandable, but I'm taking today's update to signify we are more likely than I'd thought previously to complete this transaction.
They said this in the rns of 12/12/22 announcing the SPA :
"The Transaction is conditional upon the satisfaction of certain conditions precedent including, inter alia, approval of the Government of the Republic of South Sudan, the approval of Savannah's shareholders and re-admission to trading on AIM taking effect."
In any of the extensions (updates) since, approval of the government of SS doesn't figure, until todays rns when this is included " whilst it continues to advance the various workstreams, including receipt of in-country approvals,"
One can draw ones own conclusions.
Good to see the deal still alive but we are many months away from completion. I’ve said this before but some folk say I’m wrong. But the debt provider/s will not start their work in earnest until some of these in county approvals are achieved. Whilst we could come back to trading when these approvals are granted, there will still be a fair bit of WIP to complete until the deal hopefully gets completed 100%. Having said all that, the longer this stays suspended, the less debt we need to take on. There is a growing possibility that we don’t need to take on debt. The deal could soon be financed by $1.25bn - credit from 1/1/22 - cash payment and the balance from future production payments.
Hoping to see operational & financial update soon but not holding my breath. Whilst all our very sensitive projects are ongoing SAVE have cut back on updates and only given mandatory updates. We may not see anything substantial until 30/6 when 2023 finals are due. We haven’t even seen anything on X since 6/11/23 so I guess we’re not sponsoring anybody in the Olympics this year - ha ha ha…
At least we are not being taken as April Fools.
Pretty pleased with that. Sounds positive and implies progress being made which is what I wanted to see. Happy to be patient here
1 February 2024
Savannah Energy PLC
("Savannah" or "the Company")
South Sudan Acquisition Update
Further to the Company's announcement on 14 December 2023, the Company confirms that it remains suspended from trading on AIM, with a revised cancellation date of 2 April 2024, whilst it continues to advance the various workstreams, including receipt of in-country approvals, required to complete the acquisition of PETRONAS International Corporation Limited's energy business in South Sudan. Further updates will be provided as and when appropriate.
Pushed to 2 April
We will know soon if RR is actually ‘inside’.