The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Leaders of Niger's ruling military junta say they can't accept a high-level diplomatic visit because there'd be a risk to the visitors' security.
Delegates from the regional grouping Ecowas, the African Union and the United Nations had been due to fly in today.
But the coup leaders told Ecowas that sanctions and the threat of invasion from the bloc had created public anger, so the delegation couldn't be hosted with calm and in security.
They added that Niger's land and air borders were closed.
Reports from the capital Niamey say many people have greeted the coup as a breath of fresh air, even though the toppled President, Mohamed Bazoum, was democratically elected.
Washington has warned there's a danger Russian Wagner mercenaries will take advantage of Niger's coup.
The Junta seemingly building their empire in Niger:-
Niger junta leader Gen Abdourahmane Tchiani has named a former finance minister as the new prime minister following the 26 July coup.
Ali Mahaman Lamine Zeine replaces Mahamadou Ouhoumoudou, who was in Europe during the coup.
Mr Zeine, reported to be in his 50s, served as cabinet director and finance minister from 2001 until the overthrow of the late former President Mamadou Tandja by the army in 2010.
His appointment was announced in a statement read on state-owned television channel Télé Sahel on Monday night by a junta spokesperson.
Mr Zeine has worked for the African Development Bank in Chad, Ivory Coast and Gabon in recent years, according to the privately-owned ActuNiger news website.
The junta on Monday also appointed Brig Gen Amadou Didilli as the head of the country’s High Authority for Peace Consolidation (HACP) and Brig Gen Abou Tague Mahamadou as the inspector general of the army and the national gendarmerie.
It named Col Ibro Amadou Bachirou the private chief of staff of the junta leader and Lt Col Habibou Assoumane as the commander of the presidential guard.
And I’d be interested on the Chinese view of this!!!
Niger coup: Wagner taking advantage of instability - Antony Blinken https://www.bbc.co.uk/news/world-africa-66436797
Does anybody think our Chairman is really James Cleverly in disguise? #spittingimageinperson
AK must surely be confident of adding material hydrocarbon production as he’s still recruiting personnel with salaries between £50k and £100k.
Personally I’m looking for Savannah to have a market cap in excess of $2bn within 12 to 18 months.
Also Savannah probably need to demonstrate that they have a corporate infrastructure in place to take on sizeable oil and gas projects prior to approvals as well.................................
They need to prove that as a company they are ready to integrate any asset of any size into the existing business......
Rocky - We can sustain it without new acquisitions in all depends on how aggressive they are in signing up new gas agreements as I said the Amocon 20 mmSCFD works out to be roughly 3,000 boepd if they can add a few more of these and produce arounf 40,000 - 50,000 boepd from accugas any other acquistion in addtion will just be a a bonus..................
I am sure there must must be so degree of confidence in acquiring oil and gas assets whether it's south sudan or not perhaps other Nigeria oil and gas assets may be an easier route to go down also perhaps oil and gas assets in cameroon considering our chairman knows the cameroon market so could probably flex his muscle quite quickly there...............
Savannah are doing some great stuff in the community as per the post on X below for some stuff going on in Nigeria. Also a few months ago they sent a small team of people to Niger to take kids from a school to teach them how to make water wells in the Desert. Don’t think they’ll be making many more water wells in Niger anytime soon.
I do like all this community / PR stuff but the picture just goes to show once again what a HUGE, very expensive workforce we have. I think SG&A budget for 2022 was $75m and we came in at $66m. For 2023 the $75m has remained static and it will be interesting to see what the 1H 23 numbers come in at when we see the RNS on 29/9/2023.
The workforce is obviously being built to support a very large company and we have to do it this way (horse before cart and all that stuff) but I do worry that a lot of it was scoped with Doba oil being in the equation. Over recent years we have always reported gross margins as 75% / 80% of revenue and let’s look out for this number as I see this as a key metric in out numbers moving forward.
From X recently:-
#Savannah is pleased to announce that #Accugas, its midstream subsidiary in #Nigeria, has recently signed a Memorandum of Understanding with the Inoyo Toro Foundation, for the establishment of the Savannah Energy Education and Internship Training (“SEE-IT”) programme within secondary schools located in the Akwa Ibom and Cross River States. Education is an important part of #Savannah’s corporate social responsibility and integral to our purpose, to meaningfully contribute to the economic development of the countries in which we operate through the development of projects that will make a material difference. The SEE-IT programme will enhance access to education and improve the quality of education in the two states. This is indeed a Project that Matters. We look forward to working with the #InoyoToroFoundation and to seeing the results of this exciting partnership.
Ps Different gravy! Thanks NtM
In the event of a successful conclusion to our South Sudan expedition, my equations predict....86p!
Or for me to push the boat out on a price prediction: Rocky Agadem's model is a great one: ie somewhere between 15p and 100p is the answer :-)
I'm thrilled by the quality of the posters on this BB... it's just different gravy! Thank You
With all these up in air variables, my answer to a price prediction now for 'then' is - annoyingly to plenty. I expect .. but it's my best answer, I promise- how long is a piece of string :-)
With the Seven acquisition, there were question marks over the profitability of the assets, as Seven was in deep financial trouble because they weren't getting paid consistently. Getting the World Bank to guarantee payments was critical, even though we haven't had to call on the guarantees. So the market was wanting to see the accounts for a couple of years imo before attributing value to it.
I think today's AIM market is also very different to what it was a number of years ago. There appears to be less money about and whereas a few years ago an announcment of a drilling program would send the sp of a junior oiler rising sharply, these days it doesn't register.
Key for me is the purchase price of the asset. If we end up spending $500m or less because of the effective date then I think we'll get a strong rise, but as to putting a number to that, it really is anyone's guess. Best thing to do is to see what the brokers value it at and then divide by 4!!
Sorry I meant rocky not zengas
Zengas - not sure of price targets but anything less than a return price of 35p would be deemed a failure in my opinion regardless of what’s to come operationally. To be suspended for over 9 months and to not return to the market even at a modest premium would be a failure even if the premium is as modest as 30p. Luckily for Savannah they can achieve this simply through additional gas contracts if they can’t land a hydrocarbon deal………
Another legal hire from bracewell llp, let’s hope all these corporate hires will bear fruit and we are pursuing more hydrocarbon deals whatever happens with the South Sudan deals.
https://www.linkedin.com/posts/lauren-kelsall-a69b258b_im-happy-to-share-that-im-starting-a-new-activity-7093536815655079936-yCq2?utm_source=share&utm_medium=member_ios
While it’s quiet on here and no news (AI etc) on the deal, what are peoples views of this all being an anticlimax and we dont see the SP reaction we all hope for if SS closes with full Government blessings? In my opinion, in the past when we’ve had large successes, the SP has not reacted as positively as people may have possible expected. Ie:-
1 Although we all know there was no export pipeline, we saw hardly any reaction at all in Niger when we drilled 5 very successful wells from 5 wells drilled. You don’t very often see 5 from 5 from a junior starting out on exploration projects such as that and the SP reaction was very disappointing.
2 I still don’t know why we did not rise significantly on the successful close of the 7E RTO.
3 With regards to point 2 above and how successful Accugas has performed, I still see the SP as very much as underachieving.
So if SS Petronas 100% successfully completes, are people seriously expecting to see a significant rise? I certainly am but as you know, I am the ultimate optimist. The question for me is what will the equation look like on re-list. In ver y simple terms we have:-
Suspended price of 26p
Plus the upside of the SS deal if 100% completed
Minus the potential drag of Doba / Totco ICC case
Minus trouble in Niger
Minus trouble in Sudan
Plus potential Accugas debt re-sign, I think AK previously said could be worth $28m pa to SAVE
Plus any new hydrocarbon deal signed and closed
Plus potential additional renewable deals signed
Plus potential new customers in Nigeria / additional take-off from existing custmers
So lots and loads of calls and puts in the equation I guess and guessing a new SP is nigh on impossible. I just sincerely hope we do see some decent upside if SS closes, especially if we take only take on 50% of the headline acquisition price as debt and come out of it with >50kboepd of incremental production.
Would love to hear peoples views although I note a few people have given up posting on here at the moment. I assume they still hold though PMSL.
My take is the following:
1) It will be wrong to assume there isn’t an exit fee involved, I am 200% certain there would be just because there isn’t public information on it would be wrong to assume there isn’t. The South Sudan government are in budget deficit so they need the funds and will be looking to squeeze every dollar out of Petronas. Therefore it’s as much as Petronas job of convincing the South Sudanese government and pay up to leave quickly as it is savannah to convince them they are safe partners.
2) savannah will be the last of the 3 parties between Petronas and ss government to pull out. If they were the one to make the call than they might be liable for termination fee so they will continue to extend the deadline until Petronas make the decision so they don’t have to pay a break in deal fee.
3) even though it may be frustrating most on here would be ok with further extensions as it means the deal would be still alive, let’s hope that they are not needed and September 2023 is the final one but don’t be surprised if it gets pushed back further.
4) further extensions could be a good thing as it could allow us to wrap up another deal alongside South Sudan deal or if the South Sudan deal is failing than would allow us to wrap up another acquisition in this suspension window as I feel AK would need to use this window to bring a deal successfully to market otherwise he may not get future approvals for suspensions…………..
5) wrong to assume there isn’t complex regulatory sign off as far as I think, we would need sign off from South Sudan government, malayasian government and uk government and the relevant authorities in those countries. Like for the uk I would imagine approval from the clients and market authority and fca perhaps another uk government body to approve our investment under foreign direct investment.
6) negotiation 101 states that the South Sudanese government will drag this out as much as they can in order to get the best deal they can for them.
7) with the extensions been granted you would like to assume that there would be visibility over what the SS government demands are rand they must be achievable if all parties are still working to proceed on the deal, of course if the SS government continue to move goal posts than that might be the time to consider whether this deal becomes viable
Yes, good points Zengas. I guess we possibly look at these deals a bit too simplistically, partly becasue we want it to happen quickly and partly because we don't understand the complexities that may be there. Having said that, we are working from Save's original published timelines and I guess any delays to that cause us to think the worst. Human nature I guess, particularly when a lot of people have potentially life changing amounts invested. Personally, I'm ok with things as it stands as I think AK is shrewd and will have considered all the scenarios.
West Africa focussed Afentra announced SPAs with the following for 'non operatorship' in a number of blocks where Sonagol, Ina, Azule and other partners are present.
SPA with Sonagol for 20% of a number of producing blocks.
Announced 28/4/22. (Effective date 20/4/22)
19/7/23 Changed to 14% as a result of Azule acquisition and unchanged effective date).
Suspended for 2nd time (19/7/23) with completion expected in Q4 2023.
SPA with INA for a 4% non operating stake in same producing blocks in Angola
Announced 18/7/22 - Completed 10/5/23 = 10 months. (Effective date 30/9/21).
SPA with Azule Energy for 12% of same producing blocks in Angola.
Announced 19/7/23. Completion expected Q4 2023. (Effective date 31/10/22)
The small INA deal took 10 months to complete.
Sonagol ongoing 16 months and expected to take to Q4 2023 - maybe 21 months in total.
Azule expected to take close to 5 months.
Delays to completing the Sonagol acquisition which was expected to complete in March ie almost 12 months after announcement was the wait for licence extensions and improved fiscal term agreements and then after that with Azule withdrawing the terms were changed to allow Sonagol to remain operator thus AET reducing the stake in the original agreement while increasing overall with taking on Azule.
The above was for an overall 30% and the smallest deal taking 10 months to complete, all non operatorship and an overall near 6k bopd from being a non producing company.
Saves SPA for S.Sudan was 12/12/22 - and by end Sept will be 9.5 months. There's some 64 fields which i expect to be more complex re any issues on dd like pollution, legacy issues, possible licence extension terms etc (i think block 5A 2027 ??? which is only 4 years and something Afentra had to wait to get changed in theirs as mentioned above). There's also likely to be discussions/agreements with the other partners - have any of them changed their plans ?
It's never all down to government but the overall picture needs consideration which none of us are party to - but to complete by end of September for such a sizeable asset, nine and a half months isn't unusual as if it's somehow seen as the government holding things up whenever they are crying out for investment just as Angola are.
Yes, I've always thought it should have been a relatively straightforward transaction. The most time consuming part of the Exxon transaction was the IT transfer I believe, which was estimated at 6 months, so with no such process required it's frustrating for it to still be ongoing, particularly when SS have made a big deal of saying they are open for investment.
Regarding the previous post about the COTCO email, Thommie from ADVFN made the valid point that the person sending the email was actually one fo the Save directors (a COTCO board member) so maybe it doesn't carryu the same weight as if it was one of the other non-Save directors. Anyway, he did make a good point regarding the options open toCOTCO if the arbitration award goes Save's way
'In the end they dont have any other options as all is decided by money as usual. As the money is managed outside the country by international banks that control the in and outflows of money from liftings at the kribi port or payments to the shareholders and to cotco - chad and cameroon can do nothing. The International banks dont have an option not to listen to the ICC ruling, otherwise they will get sanctioned as well... So again all depends on the final ICC ruling, if they rule in saves favour I have absolutely no doubt, that save will get its money quite fast through the revenue from liftings at kribi. There is no other option for chad to sell or use the oil inside their country in such quantity. They will always need the International markets. After the nationalisation of the 40% Exxon stake and the purchase of the 30% petronas stake plus the stake they already owned after buying the 25%.chevron stake some years ago they would own literally the whole doba fields. At current production of around 25-30k bopd the revenue from liftings should be quite big to pay down any arbitration ruling very fast by confiscating the kribi lifting money. If the ICC would award save with something around 1 billion $ the whole standoff would be worth all the time. 1 billion of revenue for work of 3-4 years sounds pretty fantastic and would open much more headroom for further even bigger aquisitions... Lets dream...'
If you take a step back and look at this with a clean pair of eyes, it’s crazy how long this deal is taking to complete. Apart from it being in Africa, this transaction should be relatively simple. Ie:-
1 We are not operator and simply buying a share of production
2 We are looking to spend significant CAPEX whereas Petronas are not
3 We don’t have large complex IT systems to integrate
4 We will be taking on very few staff in Country
5 We don’t need complex regulatory sign off similar to the Chad / Petronas deal that we could not get
6 We don’t have employees or Government, as far as we know demanding severance payments
7 I assume we had the buy-in from SS Gov since day 1
8 Our seller wants out ASAP and we want in just as quickly
After 8 months this is frustrating for all of us and let’s really hope this gets over the line ASAP and definitely within the next 8 weeks by the end of September.
Who fancies a post close Friday RNS and the following Monday seeing the resumption of trading? I do and we could get absolutely huge coverage in the press over the weekend.
Have always said I’d keep a large core holding until December 2024 and that’s still the case. However, that timeframe could be forced upon me at this rate - ha ha ha.
Finally I’m currently running my price model between 15p and 100p. Just goes to show how important the SS deal is.
GLA and let’s hope we get some positive news soon.
Yes,, no doubt a lot of uncertainty for probably a good while longer but it's good to see COTCO abiding by the decision, which should mean that SAVE continue to get it's fair share of revenues till the dispute is finally settled. Will be interesting to see the half yearly results end of September.