We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
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
Good update from Cotco / savannah. Confirming that chad claims are false and spreading misinformation.
https://www.londonstockexchange.com/news-article/SAVE/cotco-update/15984066?showDisclaimer=true
You would think that with the aggressive nature in which chad is moving that the ICC must expedite the case or at the very least provide a temporary injunction until a formal verdict is reached. If chad end up muscling in on DOBA like this that’s going to create a big problem for majors who want to divest as other countries May follow the chad rule book and nationalise assets forcefully without proper rule of law. Whatever happens to our stake in DOBA this case may become a case study for future disputes so how ICC act on this will be crucial for future investment climate in Africa and appropriate ownership and transfer of assets
Chad steps up drive to force UK-listed oil player out of country
African nation’s government removes all Savannah Energy directors from company controlling key part of Chad-Cameroon oil pipeline.
Chad’s government has up the ante in its long-running campaign to force London-listed Savannah Energy out of the country, by removing its representatives in a company holding a key stake in a pipeline that exports Chadian oil to world markets.
https://www.upstreamonline.com/politics/chad-steps-up-drive-to-force-uk-listed-oil-player-out-of-country/2-1-1460821
Sounds like the admission document ready and probably been signed off by all parties involved. So probably a matter of timing now more than anything else.........
Just had a chat with IR.
Still on track to issue admission document before the end of June. Expect shares to start trading within 24hrs of issuing admission document.
Final results will also be announced before end of June and expect further info as to what is happening in Chad.
I have asked them to do a presentation via Investor Meet and they say it is very likely that will happen after the results have been announced.
Savannah has announced that its Accugas midstream subsidiary in Nigeria has entered into a natural gas sales and purchase agreement (NGSPA) with domestic producer AMOCON. The agreement is for gas produced from AMOCON's OML156 block and facilitates the onward sale of these volumes to Accugas's customers.
Savannah reminds investors today that Accugas processed and transported an average 145mmcfd of gas through its pipeline network in FY22F, with all gas sourced from the company's Uquo field.
Gas is processed at Accugas's 200mmcfd Uquo central processing facility for onward transmission to customers through its c.260km pipeline network (with transportation capacity of up tc c.600mmcfd). The agreement with AMOCON represents the first time that Accugas will be supplying gas which has not been produced from its own Uquo field.
Gas purchased from AMOCON does not require processing and therefore does not utilise available capacity at the Uquo CPF. Under the terms of the NGSPA, Accugas has agreed to purchase up to 20mmcfd of gas over a ten-year period, with the cost of a short tie-in to Accugas's infrastructure having been borne by AMOCON (which has been responsible for all cape required to connect its early production facility to the Accugas pipeline network). Accugas has therefore not incurred any additional capital expenditure in relation to the project. Savannah confirms today that the contract is already operational, with gas supply to Accugas having stabilised at c.20mmcfd
The tariff associated with the AMOCON agreement is not disclosed in today's RNS, although we note that 20mmcfd is a material level of throughput with reference to existing Uguo volumes and will look forward to assessing the overall revenue impact on the group. These will certainly be high margin third-party volumes requiring minimal incremental expenditure by Savannah, materially supplementing the third-party oil processing volumes already assumed in our model.
We agree that such agreements to transport (otherwise stranded) gas provide an important source of growth for Accugas going forward, adding to a business which has already been performing strongly under Savannah's ownership, in our opinion.
We continue to look forward to publication of the AIM Admission Document relating to Savannah's major South Sudanese reverse takeover deal by the end of June and, in the meantime, forecast material organic revenues, profits and cash flow - along with very manageable gearing levels. Our last-published Risked NAV estimate stands at 45p/ share.
AA & shorecapmarkets.co.uk
You could roughly refer to the price Savannah sells its Uquo gas to Accugas which processes it and sells it on.
This latest deal is stranded gas and without the Accugas network they would have no other way of selling it. Probably being bought at a similar price as Uquo gas. Could therefore be worth $6+ boe to Accugas.
Accugas could be getting $2.50 mcf + transport fee of perhaps 50c so perhaps worth some $8-10 per boe to Save ?
If it was simply a transport or tolling of 3rd party gas we wouldn’t be engaged in buying it, therefore I think those margins may be significant at little cost to us.
Accugas still has the potentially to generate monster revenues for us if we can get more untreated gas to flow through our pipeline. 600 MMscfpd - 145 MMscfpd = 455 MMscfpd of spare capacity of untreated gas through our pipeline. Hopefully this agreement is a blueprint of how we can use our pipeline network to increase the flow of untreated gas and try and maximise as much of our pipeline capacity as possible.
Sorry I believe there is a misconception that I may be overhyping our potential value on South Sudan Deal completion. I would like to clarify I am not and my comparison to Kosmos Energy was purely on the basis of discussion to show the level of disparity. I for one like everyone else on here can not ascertain what our true value is no one can and ultimately the market will decided what fair value is. I was merely trying to show differences. Agreed that Kosmos Energy have a better geographical spread and also LNG asset that is probably priced by the market at a premium. But that's something that savannah energy can also achieve within the next 12-18 months. It wouldn't surprise me if we go for a LNG project or get a stake in one.
Do I think we will be equivalent to Kosmos Energy straight away - No. Do I think we can achieve peer valuation over time, I think yes. I am not comparing apples to pears. I am just comparing Green apples with red apples, if I was to use that as an analogy.
SHT Purchases Petronas Stake in Doba - https://www.upstreamonline.com/energy-security/petronas-sells-chad-oil-assets-to-government-after-collapse-of-earlier-savannah-deal/2-1-1457426
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/053023-interview-chad-hits-out-at-exxon-and-savannah-energy-in-doba-oil-field-dispute
Funny thing is that post the South Sudan acquisition even if we don’t complete another acquisition we could have potentially 2x kosmos energy production, half net debt as kosmos and potential equal 2p reserves. So it will definitely be interesting to see how the share price will be priced by brokers and analyst if South Sudan deal does complete
Andrew knott has been confirmed as speak at the South Sudan oil conference 2023. Let’s hope this is the start of increased news flow as we head towards the conference date and beyond.
https://twitter.com/energycappower/status/1663196505770012672?s=46&t=bdVeLrGB139mDog1SFRNlw
Tinubu's first act has been to abolish the Nigerian fuel subsidy.
26 minutes ago 29/5/23
'The new president of Africa's largest democracy, Nigeria, has used his inaugural address to make a major policy announcement to ease pressure on government finances.
Bola Tinubu said the decades-long subsidy on petroleum products was being scrapped.
"Fuel subsidy is gone," he told a packed crowd in the capital, Abuja.'
https://www.bbc.co.uk/news/world-africa-65737846
Says can no longer be justified. Devoured $7.5b last year. Money to be spent on public infrastructure. Something the IMF and World bank have been calling on for years but no predecessor got to grips with.
As a previous 2 time govenor of Lagos and transforming it, he hopes to apply the same plan across the country.
It will take something like this to radically increase the power supply to 30GW from the present 7.7 GW.
My dream company in the next 12 - 18 months. As follows
180,000 - 200,000 Bopd
2p reserves in excess of 2 billion.
Net debt $2.5bn dollars.
1.5 - 2 GW of renewable projects.
That’s my dream for savannah energy it is definitely possible and not completely out of question. Our current production is circa 50k Bopd as per q1 update, let’s hope we successfully close South Sudan and assume it adds another 60k Bopd takes our production to 110k. Net debt as per Q1 update was circa $400m let’s assume we close South Sudan at around $700m. That brings our net debt to $1.1bn. Let’s assume we have capacity to borrow up to $2.5bn that means we have room for probably another 100k Bopd worth of assets which we could acquire through acquisitions. So not completely impossible.
To put it all into perspective kosmos energy as per the q1 update have 60k Bopd and net debt of $2.1bn. We could reach similar debt levels through acquisitions but have production probably 3 times greater. Their current market cap is £2.4bn.
So I fully understand the aggressive nature of acquisitions that savannah energy is pursuing cause the value multiples speak for themselves. To put it all into perspective our suspended market cap was circa £350m.
If South Sudan acquisition or any acquisition of similar size comes through then we are in for one hella of a ride.
I think the Chad situation was different where it's likely they realised they wouldn't get Chad approval explicitly but decided they could make it work though the regulation of tacit approval by Chad not giving written notice of disapproval. Think they took a gamble knowing the fall back position of worst case (which it appears we are experiencing) is compensation via the arbitration. SS; I asume they are confident of approval (everything points to that - conference agenda, gold sponsor etc) but realise the market needs reassurance, so are waiting for sign off before we get into relisting.
Personally if we are getting South Sudan government approval at the oil conference then I am happy to wait and list after the conference as that will provide a massive boost on re-listing price. I wonder if they were forced to this time get government approval before coming to the market and re-admission by institutional holders ? Perhaps so, I reckon the institutional holders must have been adamant to AK and say we can’t have another chad scenario where we got HM approval and completed the deal with Exxon without formal acknowledgement from chad government. So I believe this time round they may have been forced by institutional holders to get government approval prior to re-listing than the GM approval from savannah shareholders becomes a formality. This also ties in with what Agadem said when we were suspended in December, I believe after one of his catch ups he did mention that IR had informed him that savannah only wants to return to market once South Sudan government has approved the deal. I would say the next few weeks are probably the most exciting times in savannah energy plc history as a company. As the South Sudan deal has the ability to eclipse everyone’s expectation if we manage to get formal government sign off and approval
Thanks Porsche - Just an observation but the list of directors in this company has Todor Emilov TRIFONOV and if you look at all the list of companies that he is a director for savannah on is accugas and the funding arrangement for the chad exxon acquisition, so I wonder if this new entity relates to a hydrocarbon acquisition........
I am probably clutching at straws but just an observation
New company formed today. SC?
https://find-and-update.company-information.service.gov.uk/company/14893567
Does this agreement open the door for a compromise settlement for Perenco to acquire the disputed Exxon operating stake?
https://www.journalducameroun.com/en/cameroon-chad-resolve-pipeline-discord/
I am not aware that there is a requirement in the Articles for SAVE to give more than 14 days notice for a General Meeting.
With a minimum of 14 days notice required to call a GM to approve the transaction, it is still possible the AD could be issued with SAVE returning to the market before the GM vote and ahead of the South Sudan Oil Conference, but I doubt it.
With a minimum 21 days notice to call the AGM to approve the accounts, I anticipate the notice will be issued (together with the accounts) sometime between now and Friday 9th June, with the AGM on 28th 29th or 30th June. Last year the AGM was on 30th June 2022.
IMO it is likely that the GM will be combined with the AGM with the minimum 14 days notice being given at the same time as the AD being issued W/C 12th June and trading commencing after the formal sign off with maximum publicity at the Oil Conference.
If the press speculation and our conjecture on the reasons for the many new companies being formed is correct, AK will need a bounce in the share price after relisting to avoid another RTO suspension. To this end the timing of the above is critical.
I have got a feeling that we might open lower than suspension price and rise quickly from there. I am planning to grab another 50K whatever happens
Wouldn't surprise me to have another Nigeria acquisition in the offing. They obvipously have a good reputation in Nigeria so would think the govt. would be keen to see them involved in other projects. Can't be too long before some sort of news flow, given Full Year results imminent (usually 7th/8th June) plus the SS conference. Meanwhile, as The Distractions sang 'Time goes by so slow' :-)
Savannah Tweeting about participating in Nigerian Oil & Gas Opportunity Fair (“NOGOF") 2023.
https://twitter.com/Savannah_Energy/status/1661656047709306880
Are they possibly hinting at a nigerian acquisition after the south sudan acquisition and deal completion..........