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1,564 to 1,477 today
Another 7 days like that please
Feeling like our ducks lining up at last
BANG BANG
Reminds me of when we were lucky enough to visit SA when it was relatively safe to do so. What a lovely country and it was probably one of our finest adventures, even including getting bumped off our flight from Joburg (airport not city) to Cape Town, which led to an epic event, probably too long for here.
When we overnighted in the Kruger, we kept hearing sounds of items falling from trees.
The next morning we looked outside and we were surrounded by Macadamia trees and the noise was the nuts falling to the ground.
Macadamia, king of of nuts you are Noix. If you’d prefer fruit, Durain the king then :)) good to see all are feeling a little jolly today. Yes I’m a huge durian fan.
Brent lso sat at $86 per barrel at present which is also encouraging. "are we on a roll" ?
RR
My thinking was more along the lines of, if neutral to bad news is to be announced, surely they would have wanted something to sweeten the pill.
For the sake of 8 trading days, why issue this news today.
Rocky - This morning's news alongside hopefully Niger coming into play again has certainly alleviated some of my concerns. now and continue to be supportive of further accretive growth.
NTM
Just call me walnuts :)
Noix - I’m with you mate, let’s get the smallest good news out of the way and clear the path for a big RNS.
TiL - I’m happy to stay suspended as the intrinsic value of the company is growing day by day.
Hopefully today’s news will mitigate a lot of the bad luck we’ve suffered should we need to return with a failed SS deal. And should SS fail, I now feel quite confident that we would resume no worse than the suspended price.
You Sir are the Noixtimist
If you like, but one could be forgiven for believing that today's news may indicate a positive development at the end of the month.
Zengas - 100% agreed on the basis that Savannah can bring additional deals in this suspension window with or without south sudan I would be happy for the 2nd April date to be extended if they can secure another material acquisition alongside or instead of South Sudan acquisition. We did throw our hat in the ring for Assala assets ass per the Jan 2024 africa intelligence article so on that basis clearly our current position is not hindering additional deals.
In light of today's SPA happy to be suspended to bring incremental or bigger deals in this suspension window.....
A lot may disagree with this but this is just my opinion of course if south sudan is ready than happy to come back as soon as possible.
Is there any workable timescale for shares to trade again. Thank you
Good to see the Stubb Creek deal completed with Sinopec though i wasn't expecting the oil element which is a bonus.
My thoughts this past few weeks were on Save possibly doing something in tandem in Niger with Sinopec given they were after 4 neighbouring blocks to us but which the Niger government is rumoured to now want to develop themselves.
That's a lot of gas and oil before any further acquisitions.
Also a welcome dollar income boost from new additional and expected to double oil production.
Sinopecs Sipec made $27.8m after tax profit in 2022 so should overall improve our dollar income/less reliability on the naira and with overall production expected to double should really improve things.
This perhaps looks like the 'at least one further acquisition' which was expected by the end of 2023.
This has moved our net 2P/2C up to over 180 mmboe with Agadem net (220+ mmboe gross).
It' shows how quickly things can take a step change.
If they can push on this year in Niger and if the segments in Amdigh are as hoped for in pressure communication (which were not included in the first time around in the cpr), it could add a sizeable uplift in 2C. Approx 100 mmbo additional to play for in 3 existing fields.
Of course if S.Sudan could only complete and with a rumoured 300 mmbls reserves (A.Intel) would put us in a different 2P/2C and production league.
Thanks for Sharing RR.
Still awaiting soooo much news (Accugas refi, SS aqn completion, Niger production start, Chad legal challenge), but good to hear company is still alive and doing value adding moves like this. As is always the case, the longer we have without any news, the more worried and suspicious we get. So good on the company to provide some marginal relief.
Good luck to all.
This SCAP note brings the RNS to life and makes me realise what a great little this deal is for us. PS thank you - you know who you are…
SAVE LN Equity } Savannah (SAVE) is buying out its partner (SIPC) from the Stubb Creek oil and gas field in Nigeria, raising its exposure to a strategically important asset for the company with strong oil production enhancement and gas development potential at an attractive price.
Savannah will pay US$61.5m in total for the 49% of Stubb Creek it does not already own. This equates to an acquisition price of just US$1.3/2P+2C boe and is well below our US$102m valuation for 49% of Stubb Creek at US$70/bbl Brent.
The acquisition is expected to be funded through a new debt facility and existing cash resources. The transaction has an effective date of 1 September 2023 and completion requires regulatory approvals, but this is expected to be relatively straight forward over the coming months.
Savannah is acquiring reserves and resources of 46 mmboe, boosting its resource base by almost 30%. Of this, the 227 bcf (38 mmboe) of gas resource is especially important with development anticipated in c2033 as the Uquo field gas production comes off plateau, helping to satisfy Savannah’s growing Nigerian mid-stream gas requirements.
SIPC 2024 oil production is estimated at 1,400 bopd. However, management plan to implement a low-cost debottlenecking programme within 12 months of the deal completion that is expected to more than double Stubb Creek gross production to 4,700 bopd.
The acquisition has strong strategic and commercial rationale. It looks attractively priced and gives Savannah total operational control over a producing asset it knows well where oil production can be rapidly increased at modest cost. It brings a complimentary gas development asset into the portfolio that can support Savannah’s long-term midstream gas distribution ambitions. For investors frustrated by the South Sudan RTO, this smaller ‘bolt-on’ transaction should be welcome, demonstrating that management has not neglected its core business in Nigeria.
Very brief coverage from Cavendish this morning, please see below:
"Stubb Creek acquisition Savannah is buying out its partners from the Stubb Creek oil and gas field in Nigeria, raising its exposure to a strategically important asset for the company with strong oil production enhancement and gas development potential at an attractive price."
Niger:
US out, Putin in.
Bodes less well, I fear.
https://www.nytimes.com/2024/03/17/world/africa/niger-orders-american-troops-out.html?te=1&nl=morning-briefing%3A-europe-edition&emc=edit_mbe_20240319
And clearly SAVE deem it more important to wish people happy Ramadan on X than to promote a nice piece of new M&A. Wonder if we will be wished a peaceful Easter next week and Happy Christmas and New Year later in 2024?
PS 48.1% of Africans are Christian!
CYB - indeed and re your point 4, I notice AK has written Projects That Matter in BOLD on the first line today. Maybe he thinks Kiir has impaired eyesight too - LOL
Re the Naira - I note it’s started to improve a tad and gone from an all time low of 1,624 to 1,560 - baby steps but a strong trajectory towards 700 - 900 would be hugely beneficial to us all IMHO.
Let’s hope SAVE’s 5 x 2023 KPI’s are delivered in 2024 and I’d take that all day long.
Very interested to see Z’s views on the production increase, additional 2P and financial structure of this little deal.
Mwahahaaa! Thanks, kat!
Standard Chartered and Citi also join Goldman in predicating a naira recovery this year.
https://www.legit.ng/business-economy/money/1584147-two-top-firms-bold-pediction-naira-dollar-exchange-rate/
The jury is still out on whether this is a good deal, as the share price has hardly moved.
Agree TIL it would be nice to see a steady increase in positive news flow over the next week or so leading to Admission doc with completed SS Deal.
Initial thoughts on this:
1. Our operating (commercial) interest in SC after this goes through appears to be 100%, with the legal ownership at 62.5% (or just over). There seems to be an unusual arrangement with UER here: see the 2022 glossy. Please correct me if I've misunderstood.
2. This deal is to be funded by a Standard Bank facility and cash reserves of the company. Good. Suggests group liquidity remains healthy.
3. I've mentioned before that the existing Nigeria TOP contracts have thus far involved a lot more paying than taking. This acquisition suggests that either that situation may soon start to reverse or other credit-enhanced customers may soon be secured. Or both. Given the parlous state of the Nigerian economy, this is encouraging.
4. The Accugas post-2017 growth story reads like a valedictory aimed directly ay HE President Kiir and his team.
5. Were the parties awaiting some degree of NGN stability before announcing this, I wonder? Is the fabled Accugas debt restructuring soon to follow?
Anyway, I'm cautiously encouraged.
Best wishes, all.
Let's hope the news this morning is just the start of news flow from growth perspective, nice move to consolidate the Sinopec shareholding strengthens our accugas position giving us circa 5,000 bopd oil production but more importantly gives us material gas feedstock and with CPF facility hopefully completed soon it significantly enhances the accugas asset, allowing significant gas throughput.
I found this line interesting "Savannah remains committed to growing our core business in Nigeria through a combination of both value accretive acquisitions and organic projects."
I hope more Nigeria acquisitions are on the cards as I have always mentioned I prefer us to go for a material oil producing acquisition in Nigeria and let's hope that we do.
Here is to new beginnings and more wins for all Savannah shareholders.