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nenn, No.
A lot happier now RE Nigeria and with Agadems post on 5/12 re CPR updates so looking forward to the Niger one.
Debottlenecking for Stubb Creek oil in 2021 is around $28m gross (circa $14m net) for the facilities and a water disposal well to take production from 3k to 5k bopd. 3 wells are producing 1k bopd each. 2 further wells are already drilled and completed so that should see a further 1,000 bopd net of additional oil for Savp. Potential for further upside there.
With Aloaji Power Station to come on in H1 and smaller but higher margin smaller gas customers to sign up, its all about delivery on upside now from this current base case in Nigeria
Zengas, did you take up your own thoughts of talking to some of the ii’s or are you happier now with this and potential updates to come.?
I still expect them to refinance in the coming months which should yield material FCF and earnings upside
I've been criticalof the company at times in getting on with things but would just like to acknowledge Jessica at IR when i asked earlier in the year what was happening to the cash flow that was being generated while the delay went on in closing the deal - was told that it was paying down debt and ultimately beneficial for us.
Certainly the case with debt reduced by $40m and cash of $15m.
The plan was to refinace that debt at a cheaper rate post deal.
Yeah... worth about 4-5p per share lol
?Inherited debt slightly lower than we assumed: Estimated end-19 gross debt held by the Accugas subsidiary of $402m is lower than the $455m we had assumed.
Slightly??? Only $53m lower!!
Our view: The updated Nigerian reserve/resource estimates and broader update contains no material surprises and gives us greater confidence (at first glance) in our current 37p/shr Tangible NAV. With the transaction now complete, Savannah can begin delivering on its plans to expand its customer base for gas in Nigeria, which should provide upside to the already attractive cash flow profile management are presenting for the assets. We rate the stock Overweight.
Key data points from the CPR and operating update :
Reserve and resource estimates consistent with prior guidance: Updated gross 2P reserves of 99.6mmboe (84% gas) and 2C resources of 98mmboe (100% gas) are consistent with the previous end-December 2017 CPR aside from adjustments for production and applying an economic cut-off to gas reserves.
• ?Nigeria assets to be FCF positive: Savannah has published CPR expected net free cash flow estimates for the Nigerian assets averaging ~$129m/yr during 2020-23. Cash collections are estimated to total $190m in 2019, funding operations and debt service.
• ?Inherited debt slightly lower than we assumed: Estimated end-19 gross debt held by the Accugas subsidiary of $402m is lower than the $455m we had assumed. The $109m gross debt held by SUGL is in line with our estimate. Savannah expects total leverage within the Nigerian assets to have declined by ~$40m during 2019.
• ?New gas customers targeted: Contractual take-or-pay gas volumes of 129mmcf/d in 2019 should increase during H1/20 with the addition of the Alaoji power station (subject to technical and commercial workstreams), while Accugas expects to announce the addition of further new customers in the coming months.