The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Was hoping for an rns first thing this morning. We all know now it’s 100% the deal has not been approved. Sure the government hasn’t said yes or no, but pretty sure they’re unlikely to say yes. Let’s hope Nigeria is doing exceptionally well and we have more new contracts. Niger? Well who knows when we will see rewards and honestly it’s not even on most people’s minds. Happy/sad Friday we still have to face it. Rest well tonight everyone.
Mr B I absolutely share your frustrations along with a multitude of others on here. With being so heavily invested here I do flip flop a lot with my thought train - and by God do I think about this a lot.
But when I look at the risk / reward and the size of the prize should we land a big one, people will hve differing views but at the end of the day, in all honesty, we have been given plenty of info from AK to let us know what he would be trying to do.
One of the ways I look at it is this:- Whilst admittedly, we could have been spending the time and money on something else, but there are no guarantees anywhere and if we'd have done something different, even in Nigeria, we could have hit a similar set of challenges. But all things being equal. I estimate we would hve spent circa $40m on the Exxon / Petronas deals on Chad / Cameronn and on the current SS transaction. If we had not spent that and paid down debt, it would equate to 2.5p on the SP. So as I am in for a lot more than 2.5p, I think this is a risk worth taking.
We have know idea how SS will play out but I genunely belive that we will win the 2/3 x ICC cases and will be rewarded with anywhere between $500m to $1bn - afterall we did pay $400m for the stuff.
I still think AK is right by saying "small deals come with as much hassle as big deals, so we may as well only take on the big ones"! We have recently seen that small deals elsewhere hit the same troubles that we encounter.
Finally, I firmly believe that AK will have known that SS is very high risk and I am genuinely hoping that he has some other stuff 50% to 80% worked though which will either soften the blow should SS fail or be the icing on the cake should it succeed.
Sleep well this evening and let's see what tomorrow brings - MASSIVE FINGERS CROSSED AND GLA
It is frustrating when a share is suspended with any company for a lengthy period and the proposed deal fails to materialise. In Savannah’s case I suppose that’s the nature of the business that we choose to invest in. Speculate to accumulate as they say. We win some and loose others.
Anyhow nothing in set in stone at present and we should all know more tomorrow. No doubt the bb will be busy again. Fingers crossed for a juicy update and progress report.
Has anyone contacted the company , nomad or firewall that is cammarco ?
State owning and nationalising assets is not always the dream NIgeria is at a stage where it will divest some of it's assets from NNPC for better performance and operations
https://africaoilgasreport.com/2023/06/farm-in-farm-out/six-year-plan-to-sell-down-nnpc-stakes-needs-careful-management-could-raise-40billion/
https://www.bloomberg.com/news/articles/2023-06-13/nigeria-president-tinubu-advised-to-sell-state-oil-assets-refineries
1) Assets owned by state may lack the competitive incentive to optimize operations and reduce costs, which can result in wastage of resources.
2) Corruption can divert resources away from productive uses and also deter foreign investment.
3) State might face challenges in raising capital for investment compared to their private counterparts and they don't always like to dip into their own treasury to develop and maintain assets, must countries don't even have ability to finance their own capital programme
4) Additionally, the perception of political risk might deter foreign investment, which is often crucial for the development and expansion of oil and gas sectors.
5) State-owned oil and gas companies may lack the technical expertise, technological advancements, and innovative approaches that private companies possess.
4) Over-reliance on state-owned oil and gas assets might hinder economic diversification, making the economy highly susceptible to global oil and gas price fluctuations.
I see Nigeria as an opportunity if NNPC are selling assets and we bid competitively than they are likely to approve their own asset sell as suppose to divestment from majors or both.
Besides we have already reviewed plenty of assets this year and already down technical studies on them. So it's a case of striking a deal if Petronas doesn't bear fruition.
You could say what took Petronas, Exxon, Chevron, Sinopec, CNPC, ONGC, Sonagol and others to these places and sunk billions in developing fields and pipelines and running these assets until they were mature when they were already so called 's' holes 20+ years ago and made money from them.
If Chad wasn't worth chasing for over TWO HUNDRED MILLION FCF yr at $65/b oil what was. Have you seen the number of other companies that chased deals there and got whittled down to preferred bidders not to mention others that have arrived ?
Family owned Perenco made their cash in so called s.holes.
There's others chasing assets in both S.Sudan & Sudan alone never mind Niger which didn't seem to be a concerning s/hole up to the latest coup.
If you can't understand when you read a strategy to expect ups and downs you shouldn't be complaining later. Whatever happens re S.Sudan doesn't change our underlying value regardless of emotional sentiment about S.Holes and why are we there.
M&P acquiring Assala during a Gabon Coup - fools ?
Meanwhile Afentra is doing exactly the same in West Africa in creating a 'west african independent' - 'opportunity for new, credible and responsible operators' on transition assets. All on a buy and build strategy. They too are chasing similar to what they have negotiated so far as well as larger operated/non operated being evaluated across West Africa.
Maybe they all went to the AK school of thought or maybe like many other CEOs they seek out assets relevant to cost, risk and non recourse debt financing. I didn't buy into SAVE or a few other African plays hoping to be a UK/Norwegian north sea operator.
Correct MR B he believes these assets are cheap and also the Accugas underpins our current business and more, So perhaps knowing that Accugas is a massive insurance policy for the company he is willing to take a swing at these assets. If Accugas wasn't a strong asset that is currently outperforming since acquisition and continues to have double digit percentage growth year to year.
‘What the ffs is AK doing in these places?’
He probably considers these assets cheap as chips and is prepared to take a little risk.
One thing I found interesting is that in the 8th June update they talked about
"Our focus in the short term is on the recruitment of the in-country management team ahead of completion of the proposed acquisition of the South Sudan Assets"
"The Group has previously used hedging instruments to provide protection against fluctuations and following the acquisition of the South Sudan Assets, the Group is expecting to enter into a rolling hedging programme to provide protection against oil price fluctuations."
Surely it was cart before the horse what made them say this..........................................................................................
Was the transaction further along the line that made them say this with confidence.............................................................
At the end of the day, SS is a sh..thole in which to do business. Ass is Chad. As is Niger.
What the ffs is AK doing in these places?
Longshort - Russian interest is not a new threat or an elevated threat. They have been in an around for a while
https://energycapitalpower.com/south-sudan-snp-group-bentiu-refinery-ssop-2023/
https://oilprice.com/Latest-Energy-News/World-News/South-Sudan-Welcomes-Russian-Firms-To-Its-Oil-Gas-Sector.html
Under the current climate and foreign sanctions even a proxy deal would be exposed involving Russia so would be hard for Petronas to entertain such a deal.
Besides very rarely does Russia or it's companies participate in JV's outside of Russia in oil extraction. They prefer local partners where they can impose their influence............You have to remember the other partners in these PSCs are state oil companies of India and China..................................... So the exposure is much greater and Russia foreign policy has always been to operate illusively in the shadows without too much traceability.
I alluded to the likes of Russia and mercenary groups in my post yesterday, Elections are due next year and the President is not certain of getting in. I am pretty sure Petronas wouldn't deal direct with Russian state buy by proxy possibly but at what cost to South Sudans future ?
South Sudan’s President Salva Kiir is in Moscow for talks with Russian President Vladimir Putin.
The visit comes at a time when Russia and Western powers are trying to woo African support in the wake of the invasion of Ukraine.
Mr Kiir arrived in the Russian capital on Wednesday and was received by Deputy Foreign Minister Andrey Rudenko Yurevich, according to statement from the president's press unit.
Mr Kiir's office says the meeting with the Russian president on Thursday will discuss prospects for the development of bilateral relations in various areas, as well as regional and international issues.
It adds that the visit aims at deepening diplomatic relations and explore other areas of co-operation on trade, investment opportunities and security.
The two leaders will also discuss the lifting of an arms embargo and targeted sanctions imposed on individuals in South Sudan, the statement added.
In May, Russia abstained in the UN Security Council vote to renew sanctions imposed on South Sudan, which include asset freezes, travel bans and an arms embargo.
Rockyride - oh believe me I am not hinging on that fact. I know they are not worth the paper in normal circumstances. But we don't know the specific clauses that were attached or the petroleum contracts in place as zengas alluded to earlier and how that ties in with the South Sudanese petroleum law. At the end of day I totally agree it's a binary choice between us or no sale, unless they can muster up the loan but there is a slim chance of that. The third option is deal inertia as i referred to earlier continuing to drag the deal without a yes or no..........................
I’ve had customers issue letters of intent (UK Police Forces and travel companies such as Airtours, Tompsons & Stagecoach). They are not legally binding here (and I’ve known companies pull out late-on when they have ‘found’ a better deal. They certainly aren’t even worth the paper they’re written on over there. We’ve already seen evidence of that nearly 3 months after we should have completed. I would not hang your hat on that one TiL. Is they want us to have the assets we will get them and if they don’t - we won’t. It’s as simple as that!
Interesting, thanks TiL. I guess for us it's whether the govts. we are dealing with pay any credence to them and if not what is the recourse. For Chad it was the international arbitration, but not sure if that's applicable to SS?
Also usually the Letter of Intent would cover pre-emption rights specified within a timeframe, giving the government a specified time-frame to find a competitive bid obviously a genuine one or to exercise the rights itself. .............................
I was speaking to a M&A lawyer mate of mine earlier this evening. His not oil and gas specific but mainly tech deals……
I asked him what happens prior to an SPA is signed and this is what he told me in most cases before the buyer and seller proceed with the transaction they Obtain a letter of intent from the government. A letter of intent is a non-binding document that expresses the government's willingness to proceed with the sale of the oil assets. It should include the key terms of the transaction, such as the price, the assets to be sold, and the timeline for completion.
So I would imagine that’s what we would have received prior to signing the SPA, hence we proceeded
Moho - I think that question needs to be posed to no one on here is entirely sure if new flow is restricted because of this deal………….. or genuinely could be no updates
I'd be against any further suspension. The shares were suspended for a deal that possibly isn't even in the frame, and the current deal if not approved imminently is likely to roll on for who knows how long. If the shares are trading it will at least warrant rather more news updates than we have become used to.
I’ll kiss you all if by Friday rns says it’s all done and dusted.
I am more interested in all other areas of the business and what the company has been up to as they have been on a news blackout for a while so one hopes they have been making moves..........................
I’m hoping Mercedes will refund me……..on the umbrella I ordered on the strength of a positive outcome.
I’m hoping for an extension now!