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.
Eland Oil: Jan 2016: 21p.
Oct 2019: 164p.
Nice wish!
Looking at the the Seplat takeover of Eland gives me great confidence with the value of Savannahs assets.
The £382 million all cash offer for Eland would value SAVP at around 43p a share. It just highlights how massively undervalued this company is. The potential growth on offer here is huge, with the expected increased demand for gas in Nigeria in the next few years.
Fundamentals looking excellent, with the reported increased interest in partnering Savannah in Niger this week. Hardly surprising given the CNPC deal to build the export pipeline from Niger, in which SAVP has access to.
Personally I am surprised the share price has drifted back to these levels given the potential near term news flow on offer. As I have previously mentioned the placing to finance the Seven transaction was at 35p. The company's fundamentals have improved massively since then, so in my opinion 22p gives a great opportunity to buy at discount prices.
GLA
ZENGAS, very astute and typically spot on as usual! Thank you for your excellent Posts.........you add considerably to the value of reading this BB!!
I Post, purely to endorse the drift of your point. That there is a considerable volume of currently flared gas, to which AK referred in an video interview (about 12 months ago I think) which he implied was a low cost win win to be obtained in due course.
In the "grand scheme of things", capturing these flared gas opportunities will probably be small bier I would think. But they serve to add to the portfolio of massive upside for SAVP once the deal is finally "put to bed"!!
And to think, I only invested originally for the "thrill of the drill" in Niger...........only to find an O&G company very likely to multi-bag!!
GLTA LTH's
NK
A few things that may be of interest/beneficial to us and drive future acquisitions to us in terms of additional gas.
We know there is a huge pool of 40 TCF gas within tie-in distance of Savps Accugas network. That's some 6.5 billion boe of stranded gas - some of which they will pick up no doubt.
There are numerous oil fields and like all have licences that must be renewed at some point.
Everyone is probably aware of the gas flaring problems.
When Elands OML-40 licence came up for renewal last year - it was granted 11 months ago for a further 20 years but one of the conditions built into it was they had to have a gas sales agreement of 25 mmcf/d signed within 5 years (4 years left). This imo will be a feature of many licences/renewals where producers will require to have a market for produced gas or else they can't produce oil and breach their licence and gas flaring regs.
Seplat obviously a big gas distributor (just as Accugas) so ideal for Eland to sell up at this point perhaps . Imagine if Eland didn't recommend the offer - where would they possibly sell gas to in 4 years in that area - they'd have to build a pipeline and some sort of facility to somewhere so Seplat an obvious but limited choice. If they didn't accept now, then perhaps in 4 years maybe no route for them available to sell anyone their gas to if Seplat are already well supplied.
This is what i see as a big opportunity for Savp - there'll be many smaller Nigerian companies that will not have the financial capability to deal with their gas and the more of them looking for a sales market that is tight could in theory mean a reasonably cheap resource just to get a sales outlet or risk their oil business in terms of licence conditions and especially flaring restrictions.
Eland 12-11-2018 Confirmation of Licence Renewal
"The consent is conditional on payment of a Renewal bonus of US$6.3 million within 90 days and a commitment from the OML 40 JV to gas monetisation and additional sale 25MMSCF/Day with the gas sales agreement to be signed within 5 years."
Apologies, Agadem, I should have made it clearer. Page 22 of the presentation, where I got the figures from, were just production for SAVP Nigeria fields (Uquo and Stubb creek). I would think if we add on Niger and Accugas valuations then we are getting close to Zengas's £2 per share.
Thanks, O&W.
So Savp would be worth double Eland's market cap.
Then add on Accugas.
And Niger.
Not long to wait now.
I'll have a stab at it:
On a combined 2P/2C basis for 139mmboe, Savp valued at $1040mn.
On a 20,000 boepd production basis and growing, Savp valued at $950mn.
The above assuming Savp has full ownership of the oil reserves and production.
Thanks, Zengas.
And for SAVP:
Upstream (page 22 of presentation):
80 mmboe 2P reserves + 59 mmboe 2C Rersources
2P production of 20,200 boepd
average gas price of $2 per mcf.
Midstream (my recollection of previous posts on here):
investment in infrastructure circa £1 billion.
Anyone want to do the sums - using the Eland valuation to produce an equivalent SAVP valuation?
Diversified, i've had a look at Eland from time to time and this is my take from their results and presentations.
Seplats takeover of Eland @ 166p = £382m/$475m.
45% of OML40 498km2. Gross 2P oil = 82.2m mmbo (net 37 mmbo).
40% of Ubima 65 km2. Gross 2P oil = 9.3 mmbo (net 3.7 mmbo).
Further gross 2C of 54.9 mmbo combined (net 24.4 mmbo).
Half year results to end of June
Gross production 22,106 bopd (9,948 bopd net).
Net revenues $106m.
Net debt stood at $30.9m.
So $475m for a growing 10,000 bopd Nigeria only focus producer (all oil) with 40 mmbo 2P + 24 mmbo 2C.
Roughly $7.50/b for 2P/2C combined or $12/b for 2P only.
https://www.elandoilandgas.com/media/1400/eland-oil-gas-plc-standard-bank-africa-investors-conference-june-2019.pdf
https://www.elandoilandgas.com/investors/results-reports-and-presentations/
Unfortunately I haven’t got the time to share direct numbers by comparison to 7E and Eland, but when you start to do the research on resources, free cash flow, net production. You can quickly understand how valuable 7E will be by comparison.
I am expecting a massive rerating when 7E completes.