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Just got a feeling AD, Results and poss other news will be released within a 48hr period for max impact. Equally nervous and excired.
I may be speculating but could have more Nigerian acquisitions forthcoming. Starting to hear a lot more chatter of Savannah Energy Plc and partnerships also starting to see a lot more of the savannah energy plc Nigeria MD on socials. I don’t believe we are far away from more Nigerian acquisitions could come with the admission document or straight away after completion of South Sudan.
https://twitter.com/napenigeria/status/1666566291719704576?s=46&t=bdVeLrGB139mDog1SFRNlw
Last 2 years the Annual Results have been on the 7th June, so wouldn't be surprised to get them this week along with a Chad update, leaving the focus for next week on the AD.
LST, yes! Lets have some flamboyance. Best, 🐸
Will we see approval and signing of deal next thursday at conference, AD 7.00AM Friday 16th, trading resumes 8.00am 16th, cracking set of results released either 15th, 16th or 19th. Could be a very busy week next week lets hope its a positive one SP wise.
This moves probably has strengthened Savannah hand in the dispute as it does show that chad is not acting in good faith and it's simply a case of asset grabbing without proper transactional law and governance it would be hard for Savannah to lose this case at arbitration as nothing that savannah has done to date suggest that they have acted in bad faith.
It's no coincidence that Chad is trying it's hardest to get SAVE removed from COTCo.
Chad is now very exposed if it loses the ICC arbitration case and any award against them. It would mean that SAVE could seize Chads share of revenues/FCF or possibly shares from COTCo should Chad not pay up over Exxon Chad oil fields and TOTCo seizure.
Saves valuation for it's 41.06% share of COTCo in the CPR was valued at $277.5m with upside to $358m on the higher throughput figures being met down the road.
Although they sold 10% (still in process) for $44.9m to SNH Cameroon this shows the value that is attributed to Chads 33.77%
Either on a pro-rata basis what SAVE sold their 10% for.
Chads COTCo stake = $151.6m or on the CPR valuation = $228m.
SAVE's 41.06% Revenue from COTCo was about $80m and $30m FCF.
This would mean Chads revenue for 33.77% is about $66m and FCF of $25m yr on present throughput.
This mornings revelation shows that Chad are prepared to even act against the business agreements it made to CEMAC over COTCo. At the very least it shows how Chad act and shoot themselves in the foot ahead of the ICC case.
zengas - thanks for posting. firstly they dispelled savannah for doba oil fields which is a territory they could force there hands in but now they are ****ed that savannah energy pipeline interest in cotco was independent of the doba fields and now they want to influence savannah holding in the pipeline interest however they are overreaching their hand here as pipeline runs through cameroon so cameroon has as much share if not greater with chad being land locked.
it seems to me that starting a dispute on the pipeline interest it's a stretch to far and also seems to me that the the pipeline is covered by cotco company by laws and not chad government laws so they can't nationalise the pipeline like they did with the oil field.
Pt 2
Chad's buyout of Petronas was made official in late May. The cost of the operation was not made public. Savannah Energy was also in the running, but the right of first refusal allowed the Société des Hydrocarbures du Tchad (SHT) to take possession.
Thinly veiled threats
In his 2 June letter, the head of the SNH also requests that Chad cede 20% of its 53% stake in COTCO - a demand that he claims has the backing of President Paul Biya, with whom he has been close for a good 60 years. As such, Cameroon, where 80% of the infrastructure is located, envisages the distribution of a 35.17% stake for itself, and a 33.77% stake for Chad, in order to restore balance.
Moudiki makes no attempt to hide his irritation in the letter's conclusion: "While awaiting the outcome of our discussions on restoring balance, make sure that you allow COTCO to continue operating in a serene manner, so as to prevent a potential shareholder crisis from seriously affecting the running of this company which has strategic value for both of our countries."
Moudiki, who was disappointed by unrealised promises of a transfer of COTCO shares from Chad to Cameroon, particularly after the SHT's buyout of Chevron's 25% stake in 2014, continues to support Savannah Energy's position, come hell or high water. The latter company transferred a 10% stake in COTCO to the SNH in April for $44.9m.'
Pt 1 6/6/23
' ExxonMobil-Savannah: SNH boss Moudiki ups the ante in letter to Chadian oil minister
The head of Cameroon's Société Nationale des Hydrocarbures sent a scathing letter to Chad's oil minister. Since ExxonMobil's withdrawal from southern Chad, the battle between Savannah Energy and N'Djamena has rekindled a recurring conflict between Cameroon and the Chadian junta.
Chadian and Cameroonian authorities are far from seeing eye to eye on the Savannah Energy issue. Unlike Cameroon, Chad is at loggerheads with the British junior oil company. These differences in opinion were underscored on 2 June by Adolphe Moudiki, managing director of Cameroon's Société Nationale des Hydrocarbures (SNH), in a confidential document sent to Chad's oil minister, Djerassem Le Bemadjiel.
Moudiki begins the two-page letter by attacking the Chad presidency's statement, released that same day, about the general meeting held on 24 May in Paris that assembled shareholders of COTCO - the joint venture that runs the pipeline exporting Chadian crude oil in Cameroon - during which directors representing Savannah Energy were reportedly dismissed. Savannah bought ExxonMobil's shares in the Doba fields and the export pipeline via COTCO and TOTCO (in Chad) in December 2022. The Chad state, which was against the transfer, nationalised those assets on 23 March. Only COTCO's stake, which previously belonged to ExxonMobil, were unaffected by the operation.
Yaoundé ghosted in Paris?
In his letter, Moudiki asks the Chadian minister to send him, in his capacity as a COTCO shareholder, "the written resolutions, as well as the summons letter to this general meeting, and finally the board of directors' resolution approving the agenda". According to the SNH boss, his company did not take part in a general meeting in Paris on the date cited, nor did it receive a summons letter. The SNH's managing director goes on to say that "in these conditions, were such a general meeting to have taken place, resolutions arising from it would be void, because they would be in breach of COTCO's statutory rules on the summoning and holding of general meetings".
Moudiki also points out that Chad had committed to "maintaining COTCO shareholders' representation on the board, limiting the number of Chadian directors to four, handing over a part of COTCO's shares to the SNH, and not including resolutions on ordinary general meetings' agendas that concern, inter alia, the appointment of COTCO managers, other than Chadian directors". N'Djamena originally made those concessions to get the green light from the Economic and Monetary Community of Central Africa (CEMAC)'s competition authorities, in order to acquire Petronas's 20% stake in the Doba-Kribi pipeline and the oil fields in southern Chad.
Here is the link: -
https://wp-savannah-2020.s3.eu-west-2.amazonaws.com/media/2023/06/COTCO_Press-Release_June-2-2023.pdf
Best, 🐸
We note Friday evening's update from Savannah, which in turn notes a news release from Cameroon pipeline company COTCo clarifying an earlier statement by the Republic of Chad.
COTCo's full release can be found here although, in summary, we believe that this provides considerable reassurance with regard to Savannah's holding in COTCo (following the Republic of Chad's earlier statement on Friday).
Ahead of publication of the AIM Admission Document relating to the major South Sudanese reverse takeover transaction, we continue to forecast material organic revenues, profits and cash flow - along with very manageable gearing levels.
Our last-published Risked NAV estimate stands at 45p/share.
In the draft agenda, there's a scheduled announcement and deal-signing ceremony slated for 11am on the 15th, parties unnamed.
The same day, Knottie is on a one hour panel at 2.30pm on the future of onshore E&P in Africa and the ME.
China tightens grip on Niger's oil with Sinopec
5-6-23
China's state-run oil major Sinopec has set it sights on the northern African country, where it is poised to become the second largest Chinese firm operating there behind China National Petroleum Corp (CNPC), an old hand in Niger.
Niger could shortly welcome a second Chinese oil major after its oil minister Mahamane Sani Mahamadou, known as Abba, and Xue Weisong, the new deputy executive director of China's state-owned Sinopec, signed a memorandum of understanding in Niamey on 26 May. Already present in the country is China National Petroleum Corp (CNPC), where Xue Weisong once worked, which has been operating in Niger since 2008.
In Niamey, Xue Weisong was accompanied by his firm's financial director and the technical director of Sinopec's "new business" branch. While he was there, the Chinese executive did not give any details of the agreement or the precise purpose of his visit.
Africa Intelligence understands that Sinopec wants to take over three areas in the region of Agadem which were handed back to the Nigerien authorities by CNPC. These areas, known as R5, R6 and R7, contain proven reserves. Sinopec is also considering acquiring the Dibella licence which was formerly owned by Labana Petroleum and Advantica Gas & Energy, owned by Nigerian billionaire Alhaji Dahiru Mangal (AI, 17/04/23).
A Sinopec deal in Niger would strengthen China's grip on Nigerian oil. Since its establishment there, CNPC has developed the Agadem area - which has yielded more than a billion barrels - by building the Zinder refinery which processes 20,000 bpd. A new pipeline to Benin currently under construction and scheduled to come on stream at the end of 2023, could enable the export of 100,000 bpd.
Other than CNPC, two other oil majors are present in Niger. Savannah Energy operates in the Agadem area (permits R1, R2, R3 and R4), which should be ready for production in 2024. Algeria's Sonatrach operates the Kafra licence, where the first drillings in 2018 yielded positive results with an estimated 150 million barrels.
One thing that remains to be seen is if Savannah Energy Plc manages to complete acquisitions successfully and becomes a producer in the region of 150,000 - 200,000 bopd. How long before it will be independently allowed to operate until institutions look for a quick exit and approve a takeover. In any case if we are producing roughly 200,000 bopd and reserves of 1 billion with debt circa $2.5bn and 1GW + renewable projects in pipeline that I would accept no less than £2.50 per share
Personally not to worried about chad it will play out in its own time. If South Sudan deal completes we can easily go for another acquisition which covers the 11,000 Bopd and associated reserves that we are missing out on in chad doba fields in fact we can go for a larger asset to replace lost potential and till end up with the doba asset after tribunal
I wonder if we get results this week and a scheduled GM at the end of the month post SSOP 2023. If we get South Sudan government approval at the conference than all that is left is for GM approval for deal which can be done together with approving accounts
We know very little here, in truth.
The arbitral settlement looks a very complicated one that I would expect to run well in to 2024. I imagine, if we win (and we may not), the award will run from the date of asset sequestration and will consist of receipt of contribution earned from the assets to that date plus a payment for the deemed asset value at that date.
Three things seem important in the mountain of mess:
1. Have we got control of the former EEPCI bank accounts into which revenues for the sold oil are flowing? I believe so. I can't see us recouping our share any other way. This is far and away the most important issue.
2. How much, if anything, remains outstanding on the debt facility with Exxon?
3. If we receive an award for valuation of assets at date of sequestration, there are unlikely to be sufficient funds for it in escrow (see 1) so could we end up continuing to take contribution from the account for months after the ICC pronouncement to make this good.
Most of the rest, to me as a humble armchair chief exec, seems to be noise.
It’ll take more than a few paracetamols to sort this mess out 🤔
Part 3
When contacted for further information, Attorney Michel Voukeng, a member of the group, revealed that the June 2 hearing has been postponed to June 7 to allow for the submission of evidence. He did not disclose the identities of the clients he represents but mentioned that they have opposing interests to Mr. Soumahoro.
According to reliable sources, the challenge to Mr. Soumahoro's interim position comes after the dismissal of at least four directors of Cotco within a week. Attorney Michel Voukeng questions whether, even as an interim CEO, Mr. Soumahoro has the authority to do more than handle day-to-day affairs and whether he can terminate executives appointed by the Board of Directors.
Regarding the disputed statement from the CEO of Cotco, which supports Mr. Soumahoro as the interim CEO, the lawyer argues that Nicolas de Aubin de Blanpre himself does not have the authority to act as the CEO of Cotco. Firstly, he points out that the resolutions made during the Board of Directors meeting on May 24, 2023, in Paris, need to be authenticated by a notary to have legal effect in Cameroon. Additionally, this appointment still requires ratification from the General Assembly and validation from the Minister of Employment through the signing of the employment contract, per the law. "You cannot transfer something you don't possess yourself," says Attorney Voukeng. Furthermore, he notes that Mr. De Blanpre himself has been dismissed by the majority shareholder of Cotco, which is the Chadian oil and gas corporation.
Part 2.
Despite this, Chad has asked banks holding Cotco SA accounts in the Cemac zone, as well as the Cemac central bank (Beac) to block fund transfers requested by the dismissed directors, particularly abroad. “The fund transfer restrictions do not concern the payment of the salaries of Cotco SA's Cameroonian and Chadian employees, as well as the taxes and social contributions owed to the administrations of Cameroon and Chad," the statement read.
On its side, Savannah Energy is also holding tight. Nicolas de Blanpre issued a press release on June 1, 2023, in which he presented himself as the company's CEO, despite Chad's protests. "(...) Mr. Soumahoro Khalif Allah Ahmed is currently acting as interim CEO for Mr. Nicolas de Blanpre, under a special delegation of authority dated May 24, 2023. Within the framework of this interim assignment, Mr. Soumahoro Khalif Allah Ahmed has full powers to represent the Managing Director and to commit the company," he wrote.
Tense social climate
Nicolas de Blanpre made that statement because the position of the Acting CEO is also opposed. Indeed a group of lawyers challenged Mr. Soumahoro's appointment in a June 1 statement. They argue that Mr. Soumahoro Khalif Allah Ahmed cannot serve as the CEO, even in an interim capacity, of Cotco because Mr. Nicolas de Aubin de Blanpre was appointed as the director and CEO of Cotco on May 24, 2023, by the Board of Directors. However, this appointment is subject to validation by the General Assembly and the ministry responsible for Employment, considering regulations regarding foreign workers. The lawyers also mention that a legal opposition has been authorized against all the actions and official communications of Mr. Soumahoro Khalif Allah Ahmed Stéphane and the requested nullification of these actions will be examined starting from June 2, 2023, by the court of the company's registered office.
Tense social climate
Nicolas de Blanpre made that statement because the position of the Acting CEO is also opposed. Indeed a group of lawyers challenged Mr. Soumahoro's appointment in a June 1 statement. They argue that Mr. Soumahoro Khalif Allah Ahmed cannot serve as the CEO, even in an interim capacity, of Cotco because Mr. Nicolas de Aubin de Blanpre was appointed as the director and CEO of Cotco on May 24, 2023, by the Board of Directors. However, this appointment is subject to validation by the General Assembly and the ministry responsible for Employment, considering regulations regarding foreign workers. The lawyers also mention that a legal opposition has been authorized against all the actions and official communications of Mr. Soumahoro Khalif Allah Ahmed Stéphane and the requested nullification of these actions will be examined starting from June 2, 2023, by the court of the company's registered office.
Part 1.
Business in Cameroon) - Nicolas de Blanpré, the former head of the Chadian subsidiary of British Savannah Energy was appointed MD of the Cameroon Oil Transportation Company (COTCo). The information was made public this week by Savannah Energy, which claims to have acquired the assets of American multinational Exxon Mobil in Cotco.
The twist here is that the newly appointed MD was expelled from N'Djamena, Chad, in December 2022 following a conflict between the British oil company and the Chadian government. The dispute was over the takeover of Exxon Mobil's assets held by Esso Pipeline Investments Limited (EPIL) in the Doba oilfield in the southern region of Chad and the Chad-Cameroon pipeline.
In a statement released Friday, the Chadian Oil Ministry made it clear that “as majority shareholders of Cotco SA, the Republic of Chad and SHT (the Chadian oil and gas corporation) will take necessary measures, in consultation with Cameroonian authorities, to swiftly appoint a new CEO for Cotco”. Following the green light given last month by the Cemac Council of Competition for the acquisition of Petronas Carigali Chad Exploration & Production Inc. by SHT, Chad (both SHT and the government) now holds a 53.77% stake in Cotco. And based on this shareholding, the county now has the power to name the leaders of the company.
On the day Savannah appointed the new CEO for Cotco, a General Assembly of Cotco took place in Paris, resulting in several significant decisions.
Firm opposition
During the General Meeting, which "was held despite the many time-wasting tactics by Esso Pipeline Investments Limited (EPIL) allegedly owned by Savannah Energy (...), to have it postponed", the Chadian Ministry of Hydrocarbons points out, several decisions were taken. The participants have decided that all the directors of EPIL (Savannah Energy, ed) will be dismissed with immediate effect and that almost all the draft resolutions previously proposed by EPIL, including the resolution proposing the allocation of profits and the distribution of dividends for 2022, will be removed. This means that no dividends will be distributed for 2022.
"As EPIL (Savannah Energy, ed) is no longer a member of the Doba field consortium in Chad, it no longer has the right, under Cotco SA's articles of association, to hold shares in Cotco SA", the press release explains. But what the statement did not mention is that although Chadian authorities dispute Savannah Energy's takeover of EPIL's assets in their country, the case is still pending before the International Court of Arbitration of the International Chamber of Commerce in Paris. A clear verdict has yet to be given.
I just can’t get excited about the SS transactions at present until the warring parties in Sudan find common ground for a permanent cease fire.
‘The fighting between rival military forces comes as truce talks mediated by the US and Saudi Arabia collapsed.’
https://www.bbc.co.uk/news/world-africa-65777311
Let’s assume the following -
Gross production as of spa announcement - 153,200 Bopd
Petronas net share based on above gross number - 56,320 Bopd
Petronas net revenue - $1.2bn
Petronas net operating expense - $600m
Petronas South Sudan free cash flow - $600m
Closing price of acquisition circa - $500-$700m
Post acquisition numbers
Production circa - 100,000 Bopd
Net debt circa - £800m - £1bn
2p reserves circa - 350 - 450 mmboe
Combined free cashflow - £600m - £700m