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Angola has decided to leave Opec with Quota disputes, could this be a new trend amongst top african producing nations as they try to maximise there hydrocarbons, wouldn't surprise me if Nigeria is to also go down this path soon, other may follow.
https://www.reuters.com/business/energy/angolan-president-approves-opec-withdrawal-statement-2023-12-21/
African countries in summary are done playing with the west and now we will see many try to put their interest ahead of west. It would be interesting to see how Saudi and Russia respond to this. Are the wheels finally coming of the opec cartel. Don't think there will be any winners out of this if the market is flooded with supply than. All 3 top producers will suffer:
1) US will suffer as shale has a high price of breakeven.
2) Russia and Saudi budget is heavily reliant on oil price at certain level.
Fully concur we should really aim to to get accugas producing 50,000 Boepd at stable consisent rates and pay down as a much debt as possible, whilst re-financing. Work up a solid plan for Niger and be aggressive once export pipeline commences. These acquisitions are only good when they come of successfully but most governments in Africa will either nationalise or majors will sell to local players so the I believe the perceived opportunity from African investment is no longer exists would love to be proven wrong but that is just my view
The French remain 100% out of favour in Niger. I wonder what the relationship is like between Chad / the French and more importantly between the ‘current’ Chad rulers and Perenco?
Niger coup leaders expel French, but not US, troops fighting jihadists https://www.bbc.co.uk/news/world-africa-67772422
And FWIW I’d do the following if I was AK:-
Strictly manage SG&A.
Refinance debt ASAP.
Put future business development (apart from in Nigeria) M&A on hold.
Put renewable projects on the back burner (pardon the pun) as African Governments take this as seriously as the West.
Direct the saved CAPEX from Niger well test and EVERY other spare penny in to reducing our very expensive debt.
Concentrate 100% on getting compression completed and adding new customers.
Commence Niger well test only when things have proven to be stable.
Work through the 4 x ICC cases and only start incurring large acquisition costs when we have positive awards and certainty we will see the $’s from the awards.
We have had a significant amount of bad luck over recent times and we can’t keep running forward at pace anymore and need a period of consolidation. Controversial I know but this is my view and I’m open for debate.
Greetings across the pond. 16:33 here.
Disappointed as nothing delivered as promised. No SS deal, no refinance, no new contract. I’m not as detailed as you are Rocky, I’m just aware of the obvious ones on the list.
Getting a bit late in the year for a decent RNS. Just flicked though SVE’s latest presentation and there are 13 KPI’s still stated to be delivered by the end of 2023. Obviously I’m interested in all 13 but the main ones are as follows with my comment against each one in brackets:-
1 To have 1GW of renewables in motion (We have 525MW announced in motion but can’t see as we are making much progress on any of the 3 contracts that make up the 525MW. Like TiL, I’d like us to get a contracted deal in place in Nigeria and am a bit surprised we’ve not seen something announced by now).
2 To well test or 5 discoveries / 33m 2C in Niger (can’t really see this happening until mid / late 2024 now at best)
3 Close South Sudan RTO (simply not going to happen TY)
4 Close at least 1 more significant M&A inorganic hydrocarbon deal (not going to happen as an SPA being signed or similar would have needed to be announced by now)
5 Close the Accugas debt refinance (I have recently been told that this is still expected to close TY but it’s getting tight now)
Anyway, let’s hope we get a BAU update with some decent information in it before the end of the year and hopefully before Christmas. I have a sneaky feeling we may see something tomorrow or Friday.
Rumours that Wcat PSA has been signed and sp up 70%. If true maybe ours will follow shortly, fingers crossed.
RR it would be nice but not sure achievable, with AK being a finance man would have thought he would have had this over the line by now.
LST - maybe wishful thinking on my part but I’m hoping AK has been waiting a bit for Naira stability before pushing the button on our debt refinance deal. Additionally I wonder if it could possibly be linked somehow as a tracker deal similar to some UK mortgages? Ie if and when Naira trades better we track the movements for our interest payments. One way or another it’s way beyond time for us to see this deal closed.
Cheers TIL, read an article last week that the refinery was doing its final testing and will be in production in a matter of weeks. This in time will also have a positive impact of in country fuel prices and stability of the Naira.
TIL - great research matey, please keep your newsflow coming?
Doing some further research I believe our partnership with AKWA IBOM Power company will turn into a material event. Here are a few articles why :
New oil refinery coming online in AKWA ibom for 200,000 bopd next year will probably need stable power and will be souced from IBOM power station
https://www.legit.ng/business-economy/energy/1568228-after-dangote-refinery-project-begins-consignment-arrives-china/
The plant produces current installed capacity of 191 MW and is owned by the Akwa Ibom State of Nigeria. But can produce up to 732 MW. The new deal shows that the aggregate maximum capacity of the gas turbine generator unit was capable of producing up to 732 megawatts.
https://www.vanguardngr.com/2022/05/akwa-ibom-firm-seal-deal-for-732mw-ibom-power-plant-expansion/
New substation investment in region to transfer power from plant to national grid -
https://guardian.ng/news/fg-kick-starts-construction-of-n6-8bn-substation-in-a-ibom/
Power distribution licence approved to local neighbouring states from ibom power
https://businessday.ng/news/article/nerc-approves-electricity-distribution-company-for-akwa-ibom/
Akwa Ibom gives Fed Govt nod to offtake power from Ibom Power Plant
https://thenationonlineng.net/akwa-ibom-gives-fed-govt-nod-to-offtake-power-from-ibom-power-plant/#google_vignette
Seems like there is material potential in our partnership with Ibom Power company
There seems to be plenty of optimism in the Nigeria Gas sector and some recent comments from NNPC and total energy committing $6bn
https://championnews.com.ng/well-use-gas-to-revolutionise-nigerias-power-industrial-sectors-kyari/
https://www.ogv.energy/news-item/total-energies-plans-6bn-investment-in-nigerian-oil-and-gas-assets
I can see plenty of opportunity to have Amocon style agreements to use third party gas through our network. The beauty of our pipeline is that we have 10 TCF of undeveloped gas resource in and around our pipeline.
"The Accugas facilities and pipelines have significant spare capacity and are strategically located in South East Nigeria, an area where there is both substantial undeveloped gas resources (c. 10 Tscf undeveloped gas estimated to be located within tie-in radius of Accugas pipelines) and significant expected demand for gas from power stations and industrial off-takers in the Calabar, Port Harcourt, Aba and Uyo areas."
Rocky - the company and IR could be doing a lot more in keeping the shareholders appraised no matter how big or small the operational updates are and regardless of whether we are in a suspension period or not, there isn’t really any excuses there
TIL - thanks for all your research and keeping some decent content on here. shame SAVE can’t give us a bit more info and they haven’t even put anything on Twitter for 6 weeks. With all that you’ve found going on in Nigeria, the least they could have done is put a few positive Tweets on. They seem more interested in letting us know about Graduate sponsored degrees than O&G. Hopefully we’ll get an update by YE but I’m certainly not banking on it.
Lets help ibom power with efficiency and optimal performance hopeful leading to a higher uptake in gas from us.
https://www.linkedin.com/feed/update/urn:li:activity:7142930068057595904?updateEntityUrn=urn%3Ali%3Afs_feedUpdate%3A%28V2%2Curn%3Ali%3Aactivity%3A7142930068057595904%29
Seems like we will have a greater influence in the running and making Ibom power plant efficient. Let's hope we can increase our take / pay gas from 20 MMscfd which is due to expire this month.
https://www.linkedin.com/posts/kuthompson_kuthompson-ariseagenda-umoeno-activity-7142765274172231680-_MMB?utm_source=share&utm_medium=member_desktop
On a separate note looks like the CPF construction is running at full steam ahead we have hired a new construction co-ordinator
https://www.linkedin.com/posts/adebanjoadebowale_im-happy-to-share-that-im-starting-a-new-activity-7142414769243820033-Bflu?utm_source=share&utm_medium=member_desktop
One thing that does intrigue me and can work in our favour is if we help power stations become more efficient like the Ibom power limited company link I posted below.
Seems to me that we are acting like techincal partners helping the power station become efficient and de-bottling the station to be able to handle stable transmission as part of this I am sure we can sell more gas to the Ibom power limited. It seems like we can act as technical partners and advisors for our customers and in return for more gas uptake, sounds like a win win model. We get more stable gas sales and potential increase in volumes.
Wouldn’t surprise me if we are doing that with a lot of our power station customers or plan to adopt this strategy.
Longshort - agreed it is frustrating to be suspended. But even without another acquisition there is a credible path to circa 50,000 boepd based on accugas alone in the next 6 -12 months if they pick up a few more gas contracts which I am sure they must be keen to get a few more.
Accugas has and is the crown Jewel of our portfolio and its organic growth and projected growth more than underpins the company regardless of acquisition outcomes and Nigeria being probably the most stable country to own an oil and gas asset.
Hence I was and still i am a bit surprised that they haven’t been able to secure another asset in country yet or perhaps they might in the not distant future.
Nigeria has signficant number of development assets which are capital starved. I am sure they are quite a few that could give 5 - 10 k Bopd per asset they should be more aggressive with these too and not just assets that majors are selling.
Yes granted we all want the big deals as that is overnight transformation and all I want for Christmas is deals for savannah whether SS or another.
If raising debt for SS is proving to be difficult and there are other assets going in relatively attractive jurisdictions we should go for those considering our ability to finance deals is hedge on the jurisdiction as we always opt for ring fenced financing perhaps it’s time we went to our lenders with an alternative deal which isn’t SS.
Sadly TIL, we as a company are not in a position yet where perceived asset value is reflected in share price due to the risk jurisrtitions we work and that will contine until we creat cash.
Based on the below growth rate of new gas contracts in motion and potential more gas contracts with hopeful debt restructure will have a material impact on the accugas business significant increase in revenues with debt restructure to match contract life can easily shift the Risked NAV estimate well beyond 45p/share.
I did a spreadsheet table this afternoon looking at the gas contracts we have shame I can't post the table on here for all. Our H1 2023 run rate was H1 2023 with an average of 25.3 Kboepd. Here is some of my highlights:
1) Notore Chemical Industries PLC - 10 MMscfd (1,772 BOEPD) Contract July to September 23 have averaged more than twice this at 26.3 MMscfpd (4,661 BOEPD) 12 Months Extension in H1 2023 + 16.3 MMscfd (+2,889 BOEPD)
2) Shell Petroleum Development Company of Nigeria Limited - 6 MMscfd (1,063 BOEPD) Added +3 MMscfd (+532 BOEPD) August 2023
3) Amocon - 20 MMscfpd (3,545 BOEPD) -Delivery Commenced April 2023 at 18 MMscfpd (3,190 BOEPD)
4) Ibom Power Company Limited (owner of the Ibom power station) - Contract till December 2023 (Extension Discussion Ongoing Potential opportunity to increase supply materially here I reckon as we are working with the local government to make this power station efficient and stable so as part of our assistance we could perhaps increase the current 20 MMscfpd (3,545 BOEPD) Take / Pay materially would be nice to double it to 40 MMscfpd (7,090 BOEPD)
https://thesouthernexaminer.com/why-eno-is-seeking-partnership-to-enhance-nigerias-epileptic-power-sector-p11079-202.htm
"Then we also have the Savannah Energy that supplies gas, they are willing to assist by coming up with solutions."
I would expect our H2 2023 average to be a lot closer to 30,000 boepd (H1 2023 (25,300 BOPED + Notore increase (+2,889 BOEPD)+ Shell increase (+532 BOEPD) + Amocon (3,190 BOEPD) = 31,911 BOEPD or circa 180 MMscfpd
I believe there is still additional scope sell more processed gas up to 200 MMscfpd (35,448) or 240 MMscfpd (42,538 BOEPD) as per Rocky IR update, and that's without the CPF facility to come in H1 2023 next year so in theory we can add anywhere between 20 MMscfpd (3,545 BOEPD) - 60 MMscfpd (10,634 BOEPD)
Would love to get daily production stable and in the range of 35,000 - 40,000 BOEPD, prior to CPF facility. Let's hope the company is hunting for additional gas customers aggressively perhaps we might get it through number 4 above Ibom Power Company Limited (owner of the Ibom power station) contract up fro renewal December 2023
Thanks tc - did you draft the article for Zac?
In case anyone missed it.
SAVE was mentioned yesterday on Zak's website.
https://www.share-talk.com/traders-cafe-with-zak-mir-the-week-in-small-caps-sunday-17th-december-2023/
TIL: I think we are all with you on that.