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A great example of risk mitigation is we know the clauses on the Exxon debt facility was amended post chad nationalization something that wasn't explicitly stated but was part of the annual report. So we know Savannah are pretty good at taking measures to protect inherent risks.
Hence I think many who have spoke to IR and Nominated advisor have mention that AK is looking to come to market only when there is some assurity so if the company does release the admission document and re-admits without formal approval i would be certain that background assurances would be granted which we may not be privy to until formal approval news lands
So I am confident that when Save do release the admission document even if it doesn't have all formals approvals in place there would be measures taken in the background which we may not be immediately privy to especially after lessons learnt from Chad deal to ensure that the risk is minimal as possible post release of admission document and re-listing. ...
NicetoMichu - I believe everyone on here would prefer to be suspended and wouldn't mind a few additional months suspension if that were the case. We have waited this long what's a few additional months. Everyone is assuming that this deal is solely dependent on South Sudan Goverment approval but the list of approvals is far greater for this deal and Savannah has not explicitly stated the wait is because of the government approval it is something that investors are inherently jumping too..... they have always referred to workstreams which is a lot more broader.
UK Approvals
1) UK Government
2) UK Listing Authority
3) FCA
4) Competition and Markets Authority
5) Savannah Shareholders
South Sudan Approval
1) South Sudan government approval
2) South Sudanese National Petroleum Commission
3) Nilepet approval
4) Minister of petroleum approval
5) Minister of finance approval
Potential US government approval ?
1) We may need US government approval as South Sudan my be subject to international sanctions
Approvals from other partners like CNPC and ONGC the PSC
The list could be exhaustive and who knows whether we need all of the above or some and some may come together.
So you can imagine with so many approvals and stakeholders to please timelines can always and likely shift.
Of course Savannah Energy may need all of the approvals to feel comfortable to come to market but I would imagine they would have got legal advice on what is utmost importance which will make the deal as watertight as possible and one which can not be back tracked on once we commence trading.
Regarding SP, the chairman's decision to subscribe at the suspended price of 26.25p is a compelling endorsement of the company's current valuation. This not only solidifies the market's optimism about our future plans but also lends extra credibility, especially considering the chairman's unique insight into the company's prospective growth.
Our strategy of increasing cash reserves and lowering net debt puts us in a robust financial position as we work towards finalizing another acquisition. Even if additional deals don't materialize, our focus will remain on strengthening our financials by continuing to reduce net debt and accumulate cash.
Regarding SP, the chairman's decision to subscribe at the suspended price of 26.25p is a compelling endorsement of the company's current valuation. This not only solidifies the market's optimism about our future plans but also lends extra credibility, especially considering the chairman's unique insight into the company's prospective growth.
Accugas increasing cash reserves and lowering net debt puts us in a robust financial position as we work towards finalizing another acquisition. Even if additional deals don't materialize, our focus will remain on strengthening accugas asset through additional gas contracts which in turn will strengthen financials by continuing to reduce net debt and accumulate cash that alone will provide upside headway to the company
Whatever happens with deals, we have plenty to go fro in terms of accugas growth new contracts and higher volumes. always have said we if we can be strong and aggressive in executing on the accugas front than that alone could take us to being a £1bn market cap company in it's own right....................
Half year report to come end of September will be very interesting in my opinion and will provided further outlook as well
Whatever happens , happens so to speak NiceTMU when we eventually come out of suspension.
I'm just saying i don't want to get my hopes up on high expectation that we will see govt approval alongside the adm doc and take that as a negative if it doesn't arrive or if both are delayed come the end of the month for that matter. Great if it happens but i just think it might be a case of the cart before the horse just now - but who knows but it doesn't and won't change my perspective and I think TIL has hit the nail on the head with the 'Deals' post. I'm focussing on the longer term especially with other deals in the pipeline and Accugas continuing to evolve and the compression project to complete and the impact of more deals.
We've had a considerable number of new gas contracts (5) where we haven't seen the impact on a full year basis yet.
First gas sales to - TransAfam only started 28th June 2022. To Central Horizon only started 27th June 2022. To FIPL TransAmadi 22/6/22.
Likewise Notore Chemicals was only signed 16th August 2022 and connected so i assume may have started supply then.
That's 4 contracts that barely accounted for 6 months in the latest full year accounts to end 2022 released on 8th June this year.
In addition the Amocon contract didn't start until end of May this year.
There could be a significant amount of revenue playing catch-up to come through on a full year basis regardless of any new contracts in the pipeline and next years completion of the compression facility. All of this i would hope to have a material impact on reducing the net debt forecasts that much faster than anaylsts previously guided on prior to these additional contracts.
Zengas, some might - rightly or wrongly - perceive that post as subtly trying to minimize s/p damage in a scenario where Save comes out of suspension with South Sudan deal still absolutely wanting completing by AK but with government approval still pending on it
(and I'd be one of those some :-)... but see merit in the post still too.. for a variety of reasons)
PS: I'm absolutely for this staying suspended for longer again if South Sudan deal has not received government approval by the end of this month.. that is if there isn't another significant deal fully signed sealed and delivered instead /as well by the end of this month.. and my guess is there won't be another significant deal FULLY completed by the end of this month.
Agree, I believe that AK has previously warned us of bumps in the road.
Although operating in Africa, he was presumably referring to the state of UK roads as a benchmark.
So with every deal that Savannah does in the future it will also be about testing the investors patience.....................If you play the long game than I truly believe everything will be fine.................................
It's all about looking with a longer lens accugas asset has proven that, there was so much issues from the point we struck the deal to getting the asset to where it is today at one point there was even worries of being paid on time................ a few years on and the asset is effectively placed us in our current position where we are able to access financing to go for other inorganic deals and potentially transforming the company into the next level.................... Nothing is easy but the persistence and determination showed by AK in getting the accugas asset to where it currently is nothing short of commendable and one thing the accugas asset has shown is AK drive to make a deal a success regardless of the timelines.
Every upstream deal in africa has it's own sets of challenges, and there aren't any easy deals, it's about being persistent, patient and playing the long game......... The challenges can come in a number of forms, employee unrest, political unrest, environmental concerns, approvals inertia............................... etc......................................
ENI / OANDO deal worker protests
https://www.majorwavesenergyreport.com/pengassan-pickets-agip/
My view is that in a lot of these deals a preliminary binding approval can be granted subject to so other customary completions perhaps AK is looking for something similar before coming to the market. There isn’t a set structure as to when approval can be granted.
RR I've absolutely no doubt that Financial & Co IR are and would be expected to be very close to II's.
8 II's above 3% hold 53.87% and Cavendish that holds the EBT shares is another 5.26% plus the directors 4.79% is just shy of 64% in total and i've no doubt there are smaller II's below the 3% figure.
That's isn't my point about turkeys voting for Christmas but i'm just wondering how they feel about risk and if any of them decided to drop out or demand something for their support v risk since you ask. They know like us there are other deals being pursued so its not like S.Sdn to them is the only opportunity on the horizon.
That's why i posed the question about relying on or expecting govt approval and the adm doc at the same time.
Far from it being 'strange' to pose it - I never rule anything out especially after the fundraisings which came all the way down to 19.35p to get Chad through. They (II's) got more of the pie (inc AK) versus PIs and it's not PIs who call the shots. I'm hoping that everything will be fully debt financed this time around and obviously that all II's remain supportive.
My post was on the adm doc/Govt approval expectation happening in tandem.
There were two more SPAs signed in the last 3 weeks.
M&Prom/Assala in Gabon and a few days ago ENI/Oando in Nigeria with both subject to later govt approval - that's why i asked is there a set protocol or legal avenue that is followed in seeing a SPA through to completion rather than trying to get govt approval prior to a shareholder vote if that is the protocol/legal route ?
Financial IR and company IR are very close to II’s and we have their full backing for the SS RTO deal fro Petronas.
Z - I find it very strange that you even pose that question. In the picture you paint, what do you think would happen to the SP if they voted “yes” and what do you think would happen to the SP if they voted “no”?
I can’t really see the II’s being akin to Turkeys voting for Christmas!
Does anyone know the protocol or legal route in taking a SPA through to completion ?
I'm just wondering that in light of what happened in Chad are we fooling ourselves in thinking that in order to prevent similar happening again we are expecting S.Sdn Govt approval along with the adm doc release ? I'm just thinking that it could be a case of the cart before the horse ?
If it was the case that Govt approval came first - but what happens if some (institutional) shareholders don't like it and it doesn't pass the GM Vote at all.
This in the belief that we are trying to tie in govt approval first and all that effort and time waiting to get that done first. What would the govt think that we as shareholders haven't voted on approving the matter first to see if the deal is even over the first hurdle - ie shareholders. I say this particularly with the situation in Sudan which came almost 4 months after the SPA was announced. How do the main shareholders feel about the risk level since then - are they all still fully behind this or instead could AK end up dealt a blow by the vote not being a majority - while we think rightly or wrongly all this time is being taken up trying to get Govt approval along with the release of the adm doc and restoration of trading. We've seen absolutely nothing of note in relation to figures ie even approximate capex, opex, reserves, production, FCF etc some 9 months later so how is an opinion to be informed if it is a good deal or not.
SAVE SPA for Exxon Chad 13/12/21.
Adm doc & Restoration 31/12/21.
GM Shareholders result to approve deal 24/1/22.
Consent deemed given with Completion 9/12/22
Afentra SPA with INA 19/7/22.
Adm doc & Restoration 10/8/22.
GM Shareholders result approving deal 30/8/23.
Recd Govt consent 12/1/23.
Completion 10/5/23
The INA SPA was a minor acquisition to the additional main Sonagol SPA signed in April 2022 and the later July 2023 Azule SPA making up 3 SPAs in total and currently suspended for the 2nd time.
On the remaining 2 SPAs' this is how Afentra set out the timeline to completion.
"The Company will now publish an updated Admission Document in due course, which will also convene a General Meeting at which the resolutions for shareholders to approve the Amended Sonangol Acquisition and the Azule Acquisition will be proposed - ***Subject to shareholder approval*** - the Company will proceed to obtain Governmental approval for both transactions with an expectation to complete both transactions in Q4 2023."
I could be absolutely wrong and to temper possible disappointment i am leaning for the expectation of a similar timeline as the above to how things progress - ie ad doc along with restoration of trading - then GM for shareholder vote - then expectation of Govt approval/deal completion.
Thanks Rocky much appreciated, if we don't hear from you hope you have a great holiday........
TiL - I commented on the lack of material news and RNS’ with regards other areas of the business while we have been suspended. Specifically, I said that I am surprised that we have not heard more about incremental growth to existing gas contracts along with new gas contracts. I also commented that with only 4 months left of the year, I’m also surprised that we have not seen another SPA for “at least one more” hydrocarbon acquisition which we are hoping to complete by the end of 2023. Whilst I can not remember the comments back work for word the reply was something along these lines:-
“AK is working harder than ever but until things are RNS’d he obviously keeps things very close to his chest and there are very few people in the business who know exactly what’s going on. However, as the SPA for Petronas SS deal was issued in December 2022, and we knew that AK has been working on bringing in at least one more deal, we are assuming that something will be very well worked up and could be announced at any time. With regards additional gas sales, for new and existing companies, although we have nothing concrete to go on (and it would have to be RNS’d first anyway) we are hearing rumours that things are going very well on multiple fronts”
After the reply, the only point I discussed further was to ask if we could see a new SPA RNS prior to Ad Doc and relist or whether we would have to wait until SS completes due to the very complex RTO rules. I id not get a clear answer here, but my interpretation of what was said is that we would not see another SPA RNS until we are back trading, with or without SS. I could be wrong here though and i think there is a low probability that we could see a SPA while still suspended.
Hope this helps.
Rocky - are you able to elaborate slightly more on “ I do think we will see new custmer/s and contract extensions and or contracts increased by volumes ”.
I have always wanted a bit more aggression from the company in growing the accugas asset considering the pipeline capacity we have. Just wondered whether you got strong inclinations around the timing of these and perhaps how close this might be towards execution.
I was always of the opinion that we should and can be quicker on optimising and maximising the gas around our accugas pipeline and increasing volumes……. And wanted or am looking for more amocon style contracts
Thanks so much for sharing Rocky!
Hey no probs Streets, just my observation from the court papers. Still upbeat and hopefull for a successful SS outcome.
Rocky Thanks for update
Struck out for lack of merit according to Punch
https://punchng.com/breaking-tribunal-dismisses-apms-petition-against-tinubu-shettima/
Surely we could not have more bad luck and Tinubu loses this.
The ruling to determine the winner of the 25 February presidential election in Nigeria is under way in Abuja.
The court will decide on the petitions brought before it by opposition candidates of the People’s Democratic Party, the Labour Party and the Allied People’s Movement seeking to overturn the declaration of President Bola Tinubu as the winner of the election.
Expectations of the ruling have sparked tension across the country following the the deeply polarising election.
In the capital, large number of soldiers and police personnel have mounted road blocks at strategic locations within the city centre and the surrounding communities. There appear to be fears the judgement could trigger protests, depending on who loses out today.
The proceedings are being televised live in order to be fully transparent, the court said - though it did decline to allow live broadcasts during the hearing stages when lawyers made their presentations.
K - sorry I missed of the NOT
The LAST thing AK would want to do is comeback without SS Gov full approval, especially after the Chad fiasco.
AK is desperate to come back with all I’s dotted and T’s crossed and just then seeking shareholder rubber stamp.
I just want to reiterate that sentiment. Thanks for taking the time to share your findings with us here. I have been a holder now since 2017, contributed practically nothing to this board but read regularly. Of the 5 or 6 boards I visit the contributions here are the best and I really appreciate them - you know who you are. Please keep it up even if it appears to be a small audience.
Thanks RR, we all appreciate you sharing this with us, so many thanks.
Quick question, when you say 'NOMAD will decide on further extn if not completed by end Sept but AK will def want to comeback without ALL approvals inc Gov consent ' do you mean 'AK will def NOT want to come back without ALL approvals'?