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Anyways I am hoping the board are able to provide an operational update and perhaps close out the ever illusive accugas debt re-structure before the end of 2023.
RR i agree the conditions surrounding the debt for SS deal have changed significantly, SS war , significantly higher interest rates, if fundraise through shares at say 25p every £100m would be 400m extra shares (i for one do not want significant further dilution). I would like to see final payment being no more than £5-600m and Petronas being part of the debt structure with certain covenants in place.
Thanks for confirming rocky, I wasn't aware that debt providers had pulled away since.
TiL - your last sentence is incorrect. Whilst the Chad issue did not put off interested debt providers but the Sudan war that broke out on 15/4/23 certainly did. Some of the interested debt providers withdrew their interest due to worries over the export pipeline. The debt workstream is far from completed and still needs a significant amount of work.
The Africa Energy quote I was referring to below was an article from April 2023 - "African Energy understands the expropriation of Savannah’s upstream assets in Chad should not affect the deal, as financing for the South Sudan deal is ring-fenced."
It's clear the chad nationalisation as not affected our ability to raise finance for Petronas deal, that quote was April 2023 and we are in December so one would imagine with economic interest date the debt needed would be even lower thus making in more easier to access financing.
Clearly the challenges for this deal lies elsewhere and not related to companies ability to access capital.
As for financing is concerned for this deal. My understand is that the financing for Petronas deal is ring fenced meaning the chad revenues and fx loss has not affected our ability to finance the Petronas deal and this was highlighted in the Africa energy article earlier this year
So with African energy being quite a credible news source it’s safe to say funding this acquisition is not what’s holding this deal up.
Rockyride - I for one believe the company should have reasonable inclination of whether government consent is forthcoming or not as one would imagine that there is some financial incentive tied to this deal for SS government as well and by that I mean a signing bonus and not just revenues from an incremental production by a new operator. If government approval is only thing outstanding that you would like to hope that the South Sudan government have agreed commercial terms as I am sure there are payments to them attached to this deal.
Personally If I was AK I would use every day of extension period to secure another deal and walk away from SS deal if we are going no where but obviously it’s hard for me to say when we don’t have all the facts from the company
TiL- I can’t say too much on here but I think you’ll find that the last RNS is solely to do with the extension AIM have allowed to our suspension. I mentioned the RTO 6 month standard suspension time in my recent note on here and we are now 6 months beyond the first 6 month timeframe. The longer a company go past the initial 6 months, the closer AIM look at it and start to put more pressure on wanting to see significant progress being made for any workstreams that still need completion. I believe that if we have not made significant progress by 1st Feb we may be forced back to market by AIM and not that we would voluntarily walk away. To the best of my knowledge we don’t have Government consent and it’s that which is needed before another major workstream could start in earnest. As things stand and on the assumption we make good enough progress to keep AIM happy I don’t think we will see an AD until. Few weeks after 1st Feb at best. If we don’t make enough progress to keep AIM happy, I think we may be back trading and forced out of the deal in early February. In summary, I think it’s going to get harder and harder for Savannah and Strand Hasnson to be granted further suspensions post 1st Feb 2024. But I would say we have the best people we could possibly hope for working in all of our interests.
On another note with regard to the deal, I’m not sure how many options we have for the debt finance. There was initially a lot of interest at the beginning but I think a few interested parties would have walked away when the war broke out in Sudan. I hope we have enough interest left in order to complete on a debt package (getting significantly les and less as the months tick by) and hope we don’t have to issue equity at a discount. If we do need to issue equity I sincerely hope we get a chance to participate and are offered to by 1 share for every so many held. I would also like to think that part of the debt balance due post economic interest discount could be paid for from future production OR taken on by Petronas, similar to what we dis with ExxonMobil for the Doba / Pipeline deal in Chad / Cameroon.
Finally I hope we get an ops / finance update this month which show that production is strong over at Accugas and that we have made strong progress in reducing existing debt after the terrible fx hit we were reported to a few months ago.
Now come on AK lets see your wet ink signature on the debt refinancing before the end of the month.
I was just carefully reading the wording written on the Thursday RNS and they have purposely omitted the word “admission document”. I could be wrong but I reckon from our side the admission document is complete and until we get explicit government consent I believe savannah will not come to the market with the Admission document without approval as they don’t want another chad situation potentially so hence I believe Admission document is complete and we have got an extension till 1st February to get explicit consent so we can release admission document / feel comfortable enough to release AD or if SS government don’t give Explicit consent or if they drag their feet than I don’t see us releasing the admission document and perhaps we will just walk away at that point without admission document actually being brought to the market.
The above scenario might be credible considering rocky has always insisted in his IR updates that AK only wants to come to market with admission document and government consent.
Personally and being very realistic something drastic would have to happen in the space of 5-6 weeks for government to grant approval so is this extension more speculative hope that government of South Sudan approves or is it backed by genuine and credible expectation and progress made in firm approval timeline backed by pre-conditional agreements already which are binding toward explicit consents we will see…………….
“Further to the Company's announcement on 29 September 2023, the Company continues to advance the various workstreams required to complete the acquisition of PETRONAS International Corporation Limited's energy business in South Sudan. In this regard, a further extension to the Company's cancellation date has been granted to 1 February 2024. Further updates will be provided as and when appropriate.”
Rocky SCAP update alluding to a shorter timeframe “ Given the relatively close proximity of the prior 15 December 2023 extension deadline, and the beginning of February 2024, we maintain confidence in Savannah's ability to publish the related AIM admission document within this newly updated timetable”
The above comment from SCAP is interesting - the use of the word “confidence”. I am hoping their “confidence” is credible and backed with genuine expectation as they might have better insight and access to the stage the company are at with this transaction and hopefully they know how approvals are progressing or whether we have made significant progress i.e if we had to get 10 approvals in total than we have secured 7 is what I mean.
Also this is interesting “ within this newly updated timetable”. That says to me that admission document should be published much earlier than 1 Feb 24. The use of the word within the timetable. So if we start to head into the final 1.5 - 2 weeks of Jan approaching the 1 Feb 24 deadline than it would be safe to assume we haven’t made any progress s
Resorting to personal insults, longshort. I win this one hands-down.
That you cannot refute what I have said will niggle away inside your brain, though.
Thank You, now go pedal your rightgeous sh--e somewhere else your filtered.
Even the term ' Conspiracy Theory ' has been corrupted and co-opted.
Definition CONSPIRACY :
An agreement to perform together an illegal, wrongful, or subversive act.
A group of conspirators.
An agreement between two or more persons to commit a crime or accomplish a legal purpose through illegal action.
https://duckduckgo.com/?q=definition+conspiracy&t=brave&ia=web
Definition THEORY :
A set of statements or principles devised to explain a group of facts or phenomena, especially one that has been repeatedly tested or is widely accepted and can be used to make predictions about natural phenomena.
https://duckduckgo.com/?q=definition+theory&t=brave&ia=web
So, a conspiracy theory is ..... a widely tested and accepted ( through facts, evidence, discussion, evaluation, analysis etc ) explanation of an agreement to perform an illegal, wrongful or subversive act. ( to paraphrase earlier definitions. )
A perfect description of the destruction of the Nordstream pipeline, no less !!
Thus, this Conspiracy Theory is a righteous, beneficial or good thing to me !!!
I'm Proud to be a conspiracy theorist on these terms.!!!
Another example of how propaganda twists things in the minds of unquestioning and unthinking people.
What, that the Russians would blow up their own pipe, thus denying themselves the income from their gas sales !
This is the excellent and well referenced article produced by that impeccably respected and award winning journalist ( Oh sorry, Putin Puppet and Hitler sympathiser ) Seymour Hersh.
https://seymourhersh.substack.com/p/how-america-took-out-the-nord-stream
Here is Zombie Joe Biden saying that the US admin will destroy Nordstream :
Speaking to reporters on February 7, Biden said: "If Russia invades, that means tanks or troops crossing the border of Ukraine again, there will no longer be a Nord Stream 2."
https://www.youtube.com/watch?v=OS4O8rGRLf8
Also said by Nuland and Blinken
"We continue to have strong, clear communication with our German allies," Under Secretary for Political Affairs Victoria Nuland said. "If Russia invades Ukraine, one way or another, Nord Stream 2 will not move forward."
Her comments echoed those made by Secretary of State Antony Blinken earlier this week, but reporters pushed back on the ability to enforce this threat given the pipeline’s physical completion.
https://www.foxnews.com/politics/state-dept-vows-nord-stream-2-hunk-metal-bottom-ocean-russia-invades-ukraine
You UK guys need to climb out of the Plato's Cave of propaganda you are continually fed by the BBC and regime controlled
mainstream media and question things a bit more. I know that many foreign channels are blocked or ignored in the UK. Honestly, you are receiving a totally different version of reality than those of us who live outside the UK and get a more balanced and nuanced version of events, and freer access to both facts and a range of opinions.
Well you can't beat a good conspiracy theory !!!
You think anyone will ever again let the US near an oil or gas pipeline, after they blew up Germany's Nordstream ! and 2 !!!
Hopefully the US can step up in the region as a whole to act as alternatives to France and Wagner.
Let's hope positive things to come in Niger with export pipeline potentially starting Jan 2024 and potential ease of sanctions
https://www.reuters.com/world/africa/niger-junta-agrees-plan-restore-democracy-togo-minister-says-2023-12-15/
Thanks for sharing Rockyride - I do truly believe the downside risk is limited Accugas going from strength to strength. You have to remember that we would have been suspended for a whole year and Accugas has continued to grow with Amocon gas contract as well all of that will be factored in when we return, plus if they finally get the debt restructuring out the way than that will contribute to the sp as well alongside the CPF facility completion in a matter of months, if Niger and CNPC start pipeline export i can see some positive sentiment filtering through from that as well as the market will anticipate a potential higher chance of us starting work in Niger.
Somebody very kindly sent me this a little earlier. And to reiterate my previous point without wanting to be defensive or negative, should the SS deal fail, the longer it takes for us to be informed, the higher the re-list price due to the excellent performance of Accugas. I would estimate that the debt being reduced at the moment is adding around 0.5p to 1p to the SP each month. And at this rate, compression will be completed with new customers added before we find out our destiny of the SS deal which is still huge. Whilst a failed deal could relist us lower than 26.35p and a successful deal at 80p, I would be extremely happy for 30p and 60p for the 2 respective scenarios. Here is the SCAP note that I was sent:-
E&P trading comments
Savannah Energy+
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 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 1 February 2024, with subsequent updates to be provided as and when appropriate. Given the relatively close proximity of the prior 15 December 2023 extension deadline, and the beginning of February 2024, we maintain confidence in Savannah's ability to publish the related AIM admission document within this newly updated timetable.
Whilst publication of the admission document relating to the South Sudanese reverse takeover deal was previously expected to occur around now, we sense nonetheless that Savannah is pressing on to ensure that this can occur in a matter of weeks - 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.
I remember us being interested in Zafiro at one point, one thing is for certain there is a growing theme amongst African countries is they are not to keen on oil majors selling to other international independents and most assets will become either state owned or local players
Oil divestments will happen in africa but i reckon national oil companies or local players will end up with the assets in 95% of the cases. Only 5% of the cases you may see a small incremental deals go through but the bulk of the big deals will be hard to close from an approvals perspective.
The project that matter strategy in Africa may need to be reviewed if Savannah is unable to land hydrocarbon deals in Africa there will come a point where the company might need to pivot and look for assets elsewhere around the globe if possible, or just continue to maximise accugas assets and work up an aggressive exploration, development and production plan for Niger when possible to get to 20,000 bopd per day from Niger.
As far a hydrocarbon deals in Africa go most deals will be similar drag unless consents are granted when SPA is struck otherwise these deals become pointless.
Equatorial Guinea
Teodorin puts finishing touches to ExxonMobil's departure
The US major is selling off all its assets to the Equatorial Guinean government, which is in the process of selecting its future oil partners.
ExxonMobil could sell the Zafiro oil field to Equatorial Guinea as early as 2024. Africa Intelligence understands that Antonio Engonga Oburu's oil ministry is on the point of wrapping up exclusive negotiations with Petrofac to create a partnership to operate Zafiro. The choice is surprising given the British company's plummeting share price following liquidity problems.
According to the terms of the deal, Petrofac would act as technical partner and would have to provide a new floating production storage and offloading (FPSO) platform to collect the crude oil, as the current FPSO is damaged. The state-owned GEPetrol would be the official operator of the field (which produces 25,000-30,000bpd), a solution strongly supported by the vice president and heir to the throne, Teodorin Obiang Nguema. He took over responsibility for oil and gas after his half-brother Gabriel Obiang Lima left the oil ministry in February and now decides on everything in the sector along with Antonio Oburu, with whom he maintains friendly relations.
in 2019-2020, the Equatorial Guinean government - and in particular Nguema - refused to accept Trident Energy as a buyer of (see our previous coverage), and since then ExxonMobil has failed to find an alternative.
ExxonMobil quits exploration
Besides Zafiro, ExxonMobil in early December put the finishing touches to the sale of its two exploration blocks in the Equatorial Guinean offshore fields EG-06 (obtained in 2015) and EG-11 (2017). Chevron will take over these two licences, where gas discoveries have been made, notably in EG-06 in 2017 (Avestruz-1).
Chevron has become a key player in Equatorial Guinea since it took over Noble Energy in 2020. The company owns producing fields at Aseng (oil) and Alen (gas) as well as discovered but as yet undeveloped fields at Yoyo (on the Cameroon side) and Yolanda (Equatorial Guinea), both rich in gas and condensates. An agreement was signed on 17 March in Yaoundé between Cameroon President Paul Biya and his Guinean counterpart Teodoro Obiang Nguema on the sidelines of the 15th summit of the Central African Economic and Monetary Community (Cemac) to jointly develop these deposits.
Https://careers.savannah-energy.com/job/Victoria-Island-Senior-Electrical-Engineer-LA/849288555/
Reading the concluding paragraphs here puts our investments in perspective.
Admittedly it is from the odious United Nations, but paras 18-22 made me pause and reflect.
https://reliefweb.int/report/south-sudan/statement-mr-nicholas-haysom-special-representative-secretary-general-and-head-unmiss-united-nations-security-council-briefing-14-december-2023?utm_medium=social&utm_campaign=shared&utm_source=twitter.com
As most on here know, AIM mandate suspension and Ad Doc to be issued / resumption of trading within 6 months of suspension date for all RTO’s. We often see extensions being issued to the 6 month rule (VERY OFTEN for Savannah Energy LOL), especially for RTO’s taking place in slow and cumbersome jurisdictions, such as the ones in which we chose to operate.
AIM are quite accommodating and very understanding of the complexities involved in complex deals, especially in African Nations. When extensions are granted, AIM will want to see progress being made and think there is a realistic chance of completion. However, they do not give extensions for fun and they do not grant them ad finitum.
With the date of this latest extension being mid-week and no mention of the Admission Document or re-list (for the first time), I think this RNS is specific to our AIM listed shares and specific to AIM requirements. If so, AIM will want to see significant progress by 1st Feb 2024.
As we move forward I can only see 4 possibilities:-
1 The deal progresses well and Savannah issue an Admission document / re-list date.
2 We make progress, not enough to issue AD but we do make enough for AIM allow another extension.
3 We don’t make enough progress by 1st Feb for AIM to allow extension and we are forced to re-list. Ie SS deal dies!
4 Extremely remote chance of it happening but we could be de-listed from the stock market
I get the feeling that significant work-streams are still being worked on and AIM’s patience are starting to run out. I may be a million miles off the mark here, but in the absence of any meaningful information being provided by AIM - this is my best guess of where we are at following the RNS this morning.
Shame that they've made use of the one year suspension period to inform shareholders of virtually nothing, and when they do put out an RNS with a supposed update, it tells us - virtually nothing. Would have been nice to combine with an ops update of what's going on elsewhere. I hope they are not still paying Comarco a quarterly retainer.