If you have any questions for next week's webinar guest speakers (Clifford Gross Ph.D, CEO, Tekcapital, Mark Selby, Chair & CEO, Canada Nickel and Werner Klingenberg, CEO, Goldplat) please submit 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:
You will only have one login account. Registering with multiple accounts is not allowed. Any user found to have more than one account on this site will have all, and any future accounts suspended permanently.
Your email and password must only be used by you. If a post is made under your account, it will be considered that it was posted by yourself.
Your account nickname must not be the same, or contain, listed company names or board members' names.
While debating and discussion is fine, we will not tolerate; rudeness, swearing, insulting posts, personal attacks, or posts which are invasive of another's privacy.
You will not;
discuss illegal or criminal activities.
post any confidential or price sensitive information or that is not public knowledge.
post misleading or false statements regarding the share price and performance. Such posts are deemed as market abuse, and may be reported to the appropriate authorities.
post any private communication, or part thereof, from any other person, including from a member of the board of directors of a listed company. Such posts cannot be verified as true and could be deemed to be misleading.
post any personal details (e.g. email address or phone number).
post live price or level 2 updates.
publish content that is not your original work, or infringes the copyright or other rights of any third party.
post non-constructive, meaningless, one word (or short) non-sense posts.
post links to, or otherwise publish any content containing any form of advertising, promotion for goods and services, spam, or other unsolicited communication.
post any affiliate or referral links, or post anything asking for a referral.
post or otherwise publish any content unrelated to the board or the board's topic.
re-post premium share chat posts on regular share chat.
restrict or inhibit any other user from using the boards.
impersonate any person or entity, including any of our employees or representatives.
post or transmit any content that contains software viruses, files or code designed to interrupt, destroy or limit the functionality of this website or any computer software or equipment.
If you are going to post non-English, please also post an English translation of your post.
If you are going to post non-English, please also post an English translation of your post.
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 and Verified Members
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. 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.
The ‘one man show’ and succession was my webinar question.
From memory AK said they don’t tend to employ for promotion rather best person for role. Which absolutely makes sense but imo at Bod level there should be others as able as AK or at least the potential.
Totally agree, Agadem. Keyman risk is one of SAVE's biggest risks: possibly *the* biggest risk. There may well be fantastic and inexpensive opportunities in region, but there is also the risk of overreach and loss of focus. For instance, I am a little nervous on the proposal of a renewables purchase.
Also, having a very hands-on CFO who can manage the banks, key counterparts and key strategic investors is essential. The appointment should really help take the weight off AK. It'll be interesting to see if Nick Beattie gets the role or not.
Steve Jenkins and the NEDs should be guiding on these issues.
It's easy for us all as PIs to sit at our desks and do excel models or talk about Price to FCF ratios or adding another big ticket, but the team are clearly working flat out on complex deals in difficult geographies. At some point, people need to come up for air, take a break and take stock - we're all human.
I know this post isn't analytical in the same way the great posts are from a number of you on here, but I think it is still extremely important.
SAVE came back and said AK has to review Q&A but does not have a second spare while he works away in Chad.
Good that they let me know but I find it difficult to believe that a very highly paid internal IR team & external Financial IR team do not have the knowledge / authority to compose and sign off themselves.
As SAVE get bigger and bigger there is no way a CEO can be working effectively if he chooses to stay involved in this level of detail. This adds to my concern that far too much revolves around AK and I absolutely dread what what would happen to the company / strategy should anything untoward happen to Andrew. And we never need to lose sight of the very dangerous jurisdictions in which he spends most of his working life. I’ve asked on numerous occasions to have more visibility of other BOD members but they just seem to say ‘noted’. Whilst I clearly understand the WEB casts fall into the remit of the CEO, I’d still like to see something from CFO / COO even if something small like entries from them in future RNS’s.
Anyway let’s hope he has his sub teams working their socks off re-doing Accugas debt finance deal, buying new production, planning for Niger and signing up new customers in Nigeria. However, my concern is that he’s trying to do all himself and that’s why we see progress being too slow. We need to see all these running in parallel and not in series.
Z - great information as ever. If that transpired to be the situation, and I clearly understand there will be many twists and turns, what would you think the market cap - sp would be on a fully diluted basis.
I know he wont commit to a certain % of FCF being paid as dividend and very much sees SAVE as a growth company but I really do look forward to future dividend payments which will provide an excellent annual income. This will stop me looking for the >4% income stocks for a while until I see what the SAVE dividend ends up being when it settles down in 2/3 years. Unless of course he does sell the company but that said, I guess would make me very happy too. With everything going on I’d be disappointed to see sale of the company for anything less than £2.00.
As ever GLA and I’ll post my Q&A ASAP if I ever get a reply. Maybe he will address them at the General Meeting next week.
As posted earlier re FinnCap analysis and the bare base case, it could be possible that by end 2024 Save could be in a net cash position and thereafter generating a substantial cash build from then which is likely to buy/expand into further reserves/production assets that in turn throw off their own cash contribution.
Currently having 176 mmboe 2C makes it a distinct possibility that the company can sell on the business in a near debt free or net cash position with the original P2 valuation intact.
In fact on a 5 year basis without touching on 3C or exploration upside in Chad or Nigeria, the assets could produce 50,000 boepd and only consume 90mm bls reserves and imo should be more than replaced by the current 2C without eating into the original reserves.
I beleive we could add a further 250-300m P2 and 50 -75k of production and still be at a net debt position of only $1-$1.2b while being an 85 - 100k+ boepd producer with upside from their base case and having the benefit of significant midstream assets.
With Niger production still to come, where would that take their production profile ? Overall, i see the possibility for 1b boe of P2 reserves being achieved.
'No new production wells have been drilled on the fields by the operator since 2015 and Savannah intends to make further investments in the fields, including drilling an average of 12 wells per year from 2023.'
Suspending the drilling of new oil wells for 7 years on these assets due to low oil prices has seen the average field production drop from 46,218 bopd in 2017 to circa 33,500 in 2021. Since 2015, only the two hundred high performing wells responsible for 75% of total production were prioritised for work-over. The top 200 wells averaged 173 bopd each in 2015 while the other 400 wells averaged 29 bopd. Comparative figures for 2021 are 124 bopd and 21 bopd respectively.
New production wells in the Doba and Doseo basins typically test at rates up to 2,200 bopd and 2,368 bopd in the lower and upper cretaceous reservoirs respectively. Consequently, recommencing drilling in 2023 with a 12 well a year programme, should have a highly material impact on production.
According to BP’s January 2018 statistical review "over 40% of Chad’s reported proved reserves of 1.5 Bn Bbls, that is 635 MM Bbls, have been produced from four production licenses in the Doba Basin fields operated by ExxonMobil. This implies that as of the end of 2017 around 900 MM Bbls remains to be produced from the fields and areas that contributed to the original estimate."
Successful restructuring of Chad oil field operations
The restructuring program began in early 2015 following EEPCI’s decision to reduce both capital and operational expenses by suspending the drilling of new wells. The company’s focus shifted to maximizing oil recovery from the project’s producing wells.
By the start of 2016, the project had transitioned from operating multiple drilling and completion rigs to one well work rig. The demobilization of equipment was accompanied by a reduction in contractor and employee staffing. These actions resulted in a 95 percent decrease in EEPCI’s 2016 capital expenses compared to 2014, the last year of substantial drilling.
Described below are the operational changes that led to a 20 percent reduction in operational expenses from 2015 and an all-time best safety record.
Top 200: Recognizing that 30 percent, or 200, of its 600+ wells produce 75 precent of its oil output, EEPCI opted to give maintenance and well enhancement procedures priority to this “Top 200.” To the extent time and resources permit, crews also repair and restore lower performing wells outside the Top 200.