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The timing is quite something wonder whether it suggest that notice for re-admission has gone out to brokers already with a re-admission date planned and fixed this month ? Just intriguing timing plus it wouldn’t make sense for them to raise to 100% margin prior to allowing punters to cover but those that can’t cover would they be liquidated at the suspension share price, interesting to know just for knowledge ? If anyone would care to shed some light
What happens to those that can’t cover and obviously the share is not trading again ? Are there forced out of their positions?
IG increasing the margin on open SAVE positions to 100% from next week, suggesting to close if can't be covered. Obv not an option. It affects me and possibly a few others on here. Irritates the hell out of me when they do this as could have just stuffed it in my ISA.
Evening RR. Thommie, over on ADVFN, and one of the more knowledgeable posters posted this a few days ago:
'As I was speculating in my former posts, this effective date of january 2022 is absolutely outstanding. Just to repeat it without detail.
The revenue we are looking at in 2022: 60 000bopd x 365d x100$ brent average = 2,2 billion$.
2023: 50 000 bopd x 180d x80$ brent avg = 0,7billion$.
So Overall revenue for the 18 months to date is around 3 billion $. Only petronas and save know how much of free cash flow that amount produced to date, but as I outlined before comparing it to tullows 2022 final results that had nearly the same revenue, but a much worse free cashflow number due to high interest rates to serve their debt (350m$ in 2022) very high capex costs and decom costs and still were able to reduce their net debt by around 250m$ in 2022 I have no doubt that the final consideration after adjustments would be much smaller than the headline price of 1,25 billion$, even more if some of that were amounts only due if certain milestones over the years relating to oil price and production are met. If you only substract the 700m$ in 2022 if it would be equal to tullow and add another 200-300m$ for H1 23 there is not much left to pay...
So again. If this deal reaches government approval we will all be very lucky. The sp wont be able to ignore that even with the war in sudan...'
IF the economic interest date of the SS deal was 1/1/22 we have 194 days of production discounted from the headline figure of $1.25bn. Today Brent is around $80 and at 50kboepd is generating $4m gross per day. I don’t know what the average Brent price is since 1/1/22 but I would guess it has to be at least $80 due to very high prices for 9 months of last year. So 194 days x 50kboed x $80 = $776m. Also I have no idea how much of the $80 per barrel we would get credited with but at $50 per barrel to SAVE we would receive credit of $485m leaving $765m to be financed to close the deal. I wounded what the mix of cash and debt sand possibly equity will be? I know in the original RNS they said it would be funded with cash and debt but I think they were probably factoring quite a bit of cash from the Doba oilfield at that point. Also at $50 a day to us with 50kboepd of production the $765m will be reducing by a further $2.5m per day with every day that goes by from today.
Very exciting times and we could see the next RNS re SS (whatever it may say) any day now and we will have to have an update of some kind by 2 weeks tomorrow at the very latest.
Thanks Rocky. Interesting.
I disagree TL there is no clarity there , neither is there a ney it isn't happening, Sally has to cover her bases. they do not discount negotiation. Maybe just maybe we see a positive.
Thanks Rockyride - perhaps my source jumped the gun a bit in any case lets hope we can reach resolution as quickly as possible whichever shape or form that may come in.
Unsurprisingly, very little can and will be said on this lot while the dispute remains in full fling. Whilst we may be trying to negotiate a settlement with chad in the background, i still think the Paris court case / ICC looks the more likely route of this dispute coming to a ruling. We can all hope and speculate but no doubt we will be told more when the company are in a position to update the markets. Nevertheless it would seem that there are many other great opportunities being assessed and developed. My be a bit like a spray and pray approach but surely something good will come of it all soon.
“Thank you for your email and I hope you had a good weekend. This recent press speculation should be viewed within the context of the ongoing dispute with Chad. Savannah is pursuing all our legal rights in respect of the dispute. Should there be any material developments, we would issue an RNS
Kind regards,
Sally”
Komakino - In one of my earlier post I did say we were interested in acquiring a stake in the GTA LNG project and the link you provided says - "Petrosen owns 20% of the Senegalese part of GTA" - ;)
Thanks TIL. Interesting article on Petrosen
https://african.business/2023/04/dossier/petrosen-our-ambition-is-to-make-senegal-an-oil-and-gas-giant
Looks like we could soon be in Senegal as well MOU signed in Senegal for partnership in oil and gas sector.
https://twitter.com/Groupe_PETROSEN/status/1678375382519631873
Rockyride - I think the only way to salvage something from chad is through mediation and savannah know that even if they did get to trial at ICC and were awarded significant damages chad would not necessarily pay up, so a resolution will be the best outcome for all parties provide certainty for savannah on the work programme and they can focus on other assets with access to cashflow from the chad assets, Even if let's say we pay $100m and end up with 25% of the DOBA PSC and retain the 31% of the cotco pipeline i will happily take it as it will alleviate a lot of the concerns and uncertainty.
Remember Exxon were prepared to pay circa $30m as per previous articles to exit, so this will just mean that in reality an additional payment of $70m.
I would be intrigued to know if there is a clause in the Exxon debt facility that we used to purchase the asset that allows us to adjust for the potential additional sums that we may need to pay as settlement. I believe the debt facility was circa $180m. So if we haven't paid all of it off yet it would be good to get an adjustment on the debt facility to reflect the additional premium we are having to pay for the asset to offset any settlement costs, that would be a dream scenario as it would mean we are not having to fork out from our pocket.
TiL - I’d like you to be correct on a friendly deal here and also your source of information being correct on quite a large acquisition in Nigeria too. There certainly seems a hell of a lot to shoot for in that Country. The new President is certainly making all the right noises so far and seems to be getting on with the job.
Re the deal you mention potentially being struck with Chad, if done this could bring a few more positive initiatives in the region and it’s USUALLY better sorting things out round the table than relying on a positive, long-winded and costly successful award from a judge.
Well we have to get an RNS by 2 weeks on Friday at the moment telling us something about the SS deal. Let’s hope we see something before then on that deal and maybe a few other updates on the inordinate amount of other things currently going on within Savannah.
They may be certain truth to this as the week before was the AGM on 30th June where they were hesitant on discussing anything to do with chad probably because this may have been in the works but as ever we will see..............
Rob - My guess is a good as yours and hence i did say treat it with caution apparently i. But a settlement of circa $100m is being talked about we may retain our 40% stake or reduce reduce down to 25%. although there could be slight variation on that but reckons that the settlement was agreed last week and it's just a matter of formal approval over the next few weeks, amongst all the news headlines that we were seeing the mediation process was continuing in the background through ICC.
As ever we will only know how reliable this source is if we receive formal confirmation through an RNS.....................
Hi TrustLie
Is your source reliable on that front? it would seem to suggest there is a dialogue between Savannah and Chad on this - i had assumed there was no dialogue and it was simply(!) in the process of the arbitration. Are you able to add anything further on that based on you information?
Thanks
Speaking to the new Chairman at the AGM, he was reassuring tthat the COTCO deal would complete as is being suggested with SAVE selling their 10% and keeping the rest. Fingers crossed as this gives us a nice cash boost and a healthy income stream.
What if we agree to pay $100 million over 5 years and keep our current 40% stake. I would be happy with that at least we can spread the payments over a number of years from positive cashflow whilst growing the field and investing in the asset a win for savannah energy and chad as well.
I was hearing that a settlement agreement has potentially been reached between the chad government and savannah energy last week on the DOBA field PSC not sure how true it is so take it with a pinch of salt or if true what the terms are but if it’s the case it is positive for everyone even if we have to pay up slightly more it would materially remove uncertainty. Not sure how that would affect Cotco side of the business but let’s see it is expected to be finalised within the next few weeks.
That would be one of the biggest pay-offs for blackmailers in corporate history.
Or perhaps we ending up paying chad and reducing our holding to 25%.
Savannah pay a total of $100 million to the Government of Chad and retain a 25% interest in the DOBA oil field, with approval and granting of a new long term production sharing agreement.
The only way we can have an out of court settlement is perhaps if we reduce our exposure of 40% in DOBA fields down to like 20% and giving chad or perenco 20% or perhaps selling our entire interest in the Doba oil field entirely but as a condition we retain our 30% interest in the pipeline network with approval and a couple of board seats on cotco think this is more of a likely outcome.
K - I hope so and I also hope our relationship with Cameroon has remained in good health post the to’ing and fro’ing between chad and Cameroon Governments over the last few weeks. The last thing we need is another sour relationship in a 2nd Country and possible withdrawing from the 75MW renewable project. If all is good I think a hydrocarbon deal in Cameroon could possibly come to fruition and there may have been 1 or 2 on AK’s list of 20 or so potential opportunities that he was running his rule over. I’m sure that AK is very keen to own %’s of infrastructure but also to pump some percentage of our oil through it. I’e not just own 31% of pipeline alone in a single country.
I did email IR mid last week re press speculation on the % ownerships of the pipeline but they have gone very quiet with myself along with others here. I’d hope to see, but also be surprised to see an RNS on it next week. I think it’s more likely that a 3-line whip has gone out from our legal team via AK to say ABSOLUTELY nothing at all to do with Chad and Cameroon until the court ruling is awarded. I know Cameroon is not part of the Chad case, but the last thing we would want to do is issue something regarding Cameroon and annoy the Chat extremist Government even more. So no news is good news for me and let’s hope we get the court decision in our favour within the next 12 months. From what we hear and read, i certainly can’t see an out of court settlement happening anytime soon. But if the Chad Government acted like adults, I’m sure that would be the best outcome for all concerned. I also think AK would be up for doing a deal to get paid an agreed figure but would never take anything on new again in that Country.
Possibly TiL, but unless they and Cameroon nationalise the pipeline too then there's no legal procedure I can think of for them to freeze SAVE out, which the article doesn't suggest with those %'s. As it stands Chad and Cameroon can both outvote SAVE when it comes to any decision making anyway. As always though, we'll just have to wait for the next RNS to clarify things.