Savannah Energy Share Chat (SAVE)

' Article in BusinessDayNG on reforms to the power sector bearing fruit

Latest market data shows the power distribution companies collected N65 Billion from the tarrif they charged last month, the most since inception.'

(Approx $170m)

Would thoroughly recommend extensive reading of the thought provoking reports these guys publish.

http://info.gorozen.com/goehring-and-rozencwajg-commentary-confirmation-page-4q-2020?submissionGuid=7ac5caa3-8d0d-49bd-9468-2b1c8b82c748

https://www.ft.com/content/27086ad8-bc84-4e2e-9195-91880fa6916f

3 early trades for a total of under £10 pounds
Yes I admit they were mine I decided to double my holding.

https://www.completesports.com/nigeria-ekuta-qualifies-for-judo-at-tokyo-2021-olympic-games/

https://guardian.ng/news/akwa-ibom-woos-u-s-government-on-deep-seaport-project/

Hee hee :-)

Excellent post as always zen , aj changed tact slightly with his comments on some interview a while back regarding the Niger farm out .
Along the lines of industry partner or an investment company. Never mentioned an investment company before .Seems to go along with your line .
Lots of mid cycle assets majors are looking to offload right now , that just don’t have the scale of production that the big boys require.
I believe it’s a wave of opportunity right now worldwide that was seen in the North Sea 10-15 years back allowing smaller companies get some world class acreage relatively cheap then going on to make substantial size companies.
I wouldn’t be surprised to hear that save were looking at 2-3 of these types of deals

I hope this is a taster of things to come for SAVE as they pursue significant production assets in West Africa.

Panoro Energy are currently a 2,500 bopd producer with just 13.4 mmbo 2P and 25 mmbls 2C and $16m revenue to end Sept 2020. Announced completion yesterday acquring Tullows Equitorial Guniea assets and effective from 1st July 2020. At $55/b oil, it represents an immediate $120m/yr revenue jump.

Purchase Price $140m.
Acquisition price $5.60 per P2 barrel or $2.60 per 2P/2C barell.
Producton 6,000 bopd. (rising to 6,900 bopd 2021).
2P reserves 25.1 mmbo with 29 mmbls 2C + material exploration upside.
Estimated payback in under 3 years based on 2P alone.
Financed by an equity raise of $70m and a fully committed debt facilty of up to $90m provided by oil trading group - Tarfigura.
https://mb.cision.com/Public/399/3283415/a7ed7064cacbc0fd.pdf
https://www.panoroenergy.com/wp-content/themes/Avada/cision/releasesingledetail.html?releaseIdentifier=AD560F5AE3E01C21
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By comparrison, Save targetting production assets in West Africa and mentioned as part of their strategy on numerous occassions. Vitol Oil Trading group has appeared as a blue chip investor in Save. Compared to Panoro, Save imo could possibly target a deal 3-5 times this size with a similar expected payback time frame of under 3 years.

As for Nigerias debt ring fenced asset - it is estimated to have a reduction of circa $200m debt or cash build by end of next year. Either they actually reduce the debt or leave it as is but refinanced at a better and long term rate - and thus have access to some $200m of that cash for other purposes ?

One question - could Vitol be planning to fund Niger but also be involved in a strategy to help Save acquire a meaningful West African asset and give it critical mass in terms of cashflow as part of its overall longer term plans in Niger. The difference here is that Vitol is a blue chip investor in Save. In terms of the size of the Panoro/Tullow deal, Save being mentioned as in the running for Oxy/Ghana some months back while Vitol was mentioned as being involved in a possible consortium - it goes to show how sizeable the next deal could be for Save.

Wish I had listened to zen on TXP

I totally second that.. our good ol’ Zengas.

So here's my best post yet here Tier:

I request Zengas posts more again here to fill the Agadem going radio silent void.

NtM and MrB, you both are now the new Agadem :) set the bar even higher.

https://www.developingmarkets.com/sites/default/files/Session%202%20-%20Maikanti%20Baru%20-%20NNPC%20Presentation_Extractive%20Industry%20Investment%20Oppurtunities_FINAL.pdf

Slide 13 shows the 7 projects

Includes 'Cluster development of OML 13 to support the expansion of Seven Energy Uquo Gas Plant'

Cluster gas development of OML 13 with 2P reserves of about 5TCF
• Expansion of the existing Seven Energy Uquo Gas Plant
• Development of the Trans-Nigeria Gas Pipeline to transport the processed gas further to the domestic market from Ukanafu

Proposed 1st gas phase for the project was 2020.

Naughty boy step for you :)

I'm guessing you're not looking for Happy Sparrow to step up and post more while you're away Agadem :-)

Right folks, some of you will be pleased to hear, I’ve decided not to post again until I see the next RNS. I’m on here too much and watching SP too much when there is no need, the SP, as AK says, will look after itself. He will not be looking, so why should I?

I’ll be looking at opening and closing prices only and have alerts set up should any intra-day RNS’s drop.

Hopefully be on here again quite soon, but until next RNS - CIAO

PS - great to see Brent up again at $61.60 this morning. X

The Article talks about 7 Critical Gas development projects. It would be nice to get a clear understanding of what those projects are and SAVEs involvement. That clarity might be useful in understanding the scale of SAVEs involvement in Nigeria's development of Gas resources and the role of other key players in the industry

https://guardian.ng/energy/as-nigeria-seeks-solace-in-gas-for-transition-power-challenges/

LST - I must admit I tend to agree with what you say. I have Max pullback of 15.6p, but all quite irrelevant in the longer term scheme of things to come and what we all hope for here.

Would be good to get audited 2020 a fair bit earlier than last year, that’s for sure. I think AK has clearly set his stall out now re the future revenue, cash receipts and debt reduction. I.e. he really wants to keep promoting these numbers, whist overachieving against the “soft” target expectations he’s set.

As relaxed as he is, he must still be really frustrated that the market had not woken up to the compelling story here. Now he’s more confident that SAVE are delivering against all they say they’ll do (albeit a little slower than a few of us wish for), he seems very determined to regularly keep repeating and updating the debt reduction numbers. I wonder how low he wants the debt before he’s comfortable carrying it.

Of course we need a good chunk of capex for both countries, but I’m also keen to see how much FCF he’ll use to buy back. I firmly we will see a buy back program this year and probably before the initiation of dividend next year.

Aspirationally I always try see where we will be in 2024 (which seems to get closer and closer very quickly) and tweak my thoughts / plans accordingly. I thought I had my plans all mapped out but if we should start to see a >5% dividend, this will turn in to a long term investment for me, well beyond 2024.

Finally, the only other thing that could and is highly possible is that SAVE maximise market cap from what we have and maybe add and then sell. When I first met him, he always very clearly stated that as his vision. If that should come to fruition (and assuming no more growth from M&A activity) I can not see us being sold for a cent lass than $2bn.

Time will tell...

Get that sp price up where it belongs you SL****AAAGG**S

Agdem, i personally don't think any pull back here will be beyond 16p as mentioned last week that was a serious upward resistance point, i also believe we will actually hit 28p before the next news as this share has been so coiled that their is a lot more to come in this unwind over the coming 6 weeks let alone 12 months.
Still hoping we see full year results late March or early April as i can't see any debt restructuring being plausible until audited accounts are released so there is a big incentive for early issue of these.

I’ve been in SAVE since pre RTO (as mentioned a few times). And yes of course too have had major doubts, horror days at big drops etc etc, but cld never bring myself to cut my losses, as never lost total belief. For me (and I think same for a lot of us ‘long termers’) I feel better than ever about this company, the job Andrew is doing, what he’s building etc. And I am in for long term (having initially invested 5 or so years ago for a quick in and out for the drills). I’m waffling, but the point I want to make is this board has some fantastic posters, Zengas, Agadem etc etc. What makes posters real, is posting negative views, as well as the good. I understand Malcys role in this business but i don’t read his views any more. I have no doubt he’s great company over a lunch, but 100% bullish posting doesn’t work for me. I feel I get much better insight here.

I think some of you are reading too much into it.
He doesn't actually say he doubted the company, he's actually saying he doubted whether to hang in there over recent years.

We had 2 lengthy first suspensions, the first one being Jan - July 2016.
Save was working on the 7E transaction from Jan 2017 then a second suspenson from early June - 22nd Dec 2017. We got ministerial consent in Aug 2019 and it was 15th Nov 2019 before the Accugas acquisition was completed and we took control. That deal dragged on from first announcement for 2 and a half years and it was April of last year before we got the supplemental adm document - ie 3 years while the expectation for much greater work in Niger was curtailed as a result.

I never doubted the quality of the assets but there was a period in maybe 2019 or 2020 when there was plenty of criticism voiced on the board including by myself and i think even Agadem for them to get a move on and provide more concrete news that everyone was anxious for, even though most of it was beyond their control. Bombarded with plenty of personal criticism by a few on various boards, private messages of concern, not to mention the sell off after deal conclusion i'm sure there wasn't too many faced with all that who privately questioned their reason for holding so long and infact should be perfectly natural in going over any investment made. Personally i'm glad to still be here as the asset potential is second to none and also to see Malcy still having the rationale to have Save in the bucket list. Directors added, Vitol in and 9 shareholders having 60% of the company.

I guess EVERYBODY had doubts during the extremely protracted RTO process. Our legal fees were phenomenal and many things could have gone wrong to scupper the deal. If anybody did not doubt what a tragic outcome could have happened, I guess they’d be lying.

Anyway, some of us brave hearts are still here and are now able to enjoy the upward trajectory we’re now on. Yes, there will be many ups and downs - blue days and red. However, we’re now part of a multibillion company being created and 2021 will be a year that nobody will forget.

I look in too often as that needs to stop, as every penny change, either up or down it’s quite scary to be honest. But when you have so much skin in the game, I must admit, it’s extremely difficult to not be watching during the stock market’s opening hours.

Anyway, let’s see what the rest of the week brings and let’s hope for news to mitigate the chances of re-tracing a few pennies.