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Shore’s note hardly touches on anything. Just repeating the numbers. Malcy will do the same. Doubt ak will do any interview. I’m only interested in our real/current core business in Nigeria. Don’t think SS will complete. Millions of reasons the government should say yes but only one word needed: no. Think the company had not been upfront with us on many fronts. Too many unanswered questions. A little worried to say the least.
Looks like yet another of the uber-bull poster's predictions has gone off rails - debt reduction. Where's that net zero debt expectation now, eh?
So glad I disposed of 90% of my holding before suspension. Will be lucky to get 20p'sh for the remainder when it re-lists.
..to say the least, and not many positives to take away. Especially disappointed on the debt issue which is about the one thing within their control and not made any notable progress. I imagine there has been a fair bit of back and forth with BDO and the Board on the nature of the qualification. Hopefully this will push the debt reorg to the top of the priority list. No update on SS and possibly to be expected as they probably haven't got much idea where they stand either. I'm sure SS will want to keep them dangling as long as possible while anyone and everyone in govt is trying to wangle some other deal that benefits them. I can't see it progressing. Time to retrench and focus on Nigeria and debt reduction for a period imo. Also want to see it back trading asap, as I feel shareholders have been left in the dark - even if only on simple ops updates, but the suspension been used as a convenient excuse not to feed the info flow. I'd be astonished if anything changes between now and mid December.
Savannah has released interim results for the six months to June 2023, reporting total revenues and adjusted EBITDA of c.US$139m and c. US$108m, respectively - representing a healthy 8% year-on-year increase on both measures. In our initial trading comment, we erroneously stated that these represented c.47% of our FY23F forecast - the percentage is in fact somewhat lower, although (in the circumstances) we see little reason to revisit numbers at this juncture. Adj. EBITDA margins were ahead of our expectations at 78%, with the only change to prevailing guidance being reduced capex to reflect the rephasing of certain planned projects in Niger and Nigeria.
Supported by robust customer demand and a number of new and extended gas contracts in Nigeria, average gross daily production increased by 12% to 25.3mboepd - comparing very favourably against our forecasts. Net debt at the period end admittedly increased to c.US$443m (compared to c.US$405m at the end of last year), although this appears to reflect in particular unrealised foreign exchange losses associated with Naira devaluation, which we would agree are likely to be of assistance to Savannah's previously-announced refinancing initiatives
Overall, we consider Savannah's operational performance in the first half of this year to be strong, with the company also confirming continued successful expansion of its renewables division.
However, a key takeaway from this morning's results statement is clearly the fact that publication of the AIM admission document relating to the major South Sudanese reverse takeover transaction is now expected to occur on or before 15 December 2023, with the shares to remain suspended in the meantime. We will obviously continue to look forward to admission document publication, forecasting material organic revenues, profits and cash flow in the meantime. Our last-published Risked NAV estimate stands at 45p/share.
Zengas - Shore and Cavendish have posted on research tree so if you have access to those, and happy to share apologies i dont have access to researchtree
https://twitter.com/research_tree/status/1707667828671733776
https://twitter.com/research_tree/status/1707672849341632574
From the 2022 final report:-
FY 2022 average gross daily production from the Nigerian operations was 26.8 Kboepd, a 20% increase from the average gross daily production of 22.3 Kboepd in FY 2021;
·Of the FY 2022 total average Nigerian gross daily production of 26.8 Kboepd, 90% was gas, including a 23% increase in gas production from the Uquo gas field, from 118 MMscfpd (19.7 Kboepd) in FY 2021 to 145 MMscfpd (24.2 Kboepd) in FY 2022
From today:-
Average gross daily production from Nigerian operations was 25.3 Kboepd, a 12% increase from 22.5 Kboepd during H1 2022. Robust customer demand led to a 15% increase in gas production from the Uquo Field to 138.5 MMscfpd (H1 2022: 120.3 MMscfpd)
H1 this year is clearly strong compared to H1 last year but how is H1 this year lower that than the 2022 averages for boepd and UQUO gas? Either H2 last year was extremely strong for some reason or we have had a very poor H1 this year.
I’ve read todays announcement again and being brutally honest, apart from a few crumbs, I am really struggling to take any positives at all. Is it time to put M&A on hold for a bit and straighten out some of the messes we are currently in? Maybe as TiL says just focus on Nigeria 100% for a year or two and bring in a solid deal or two to help Accugas underpin our company before we go in to other countries.
We won’t get it but we really need AK to get on a Webcast with us or as a worst case scenario get an interview with Malcy or somebody.
There’s a Panmure Gordon 8 page note out. I’m not a client and it’s not accessible on research tree.
I am interested to see the tone that south sudan take at africa energy week and also what savannah do. I believe we had a poster on here who was going to it so let's see...............
It's all well and good going to these conferences saying the country is open to business when in reality they are not willing to sanction any approvals....................
Thanks Mate - I know it's a lot to ask........................................ Only if it's not to much bother.......................................
At least you have kept us up to date in the quiet peroids when there has been radio silence from the company and I know we all appreciate the time you take to do it.........
RR I’d like to see a presentation and a view from the analysts as well going forward.
The refinancing delays had been put down to the naira dollar issue and now seen as no longer an impediment. So let’s see where they go on this and I’d like it elaborated on. Still need to take a detailed look but there’s costs that can be cut. We’ve been set back by 6 months on the net debt reduction and I’d like to see this back on track by year end so until we know what the position is on the next transaction I guess we’ll have to wait. A talk through presentation definitely needed for clarity imo.
TiL - Of course I will keep in contact with IR but I can’t do it too often. I usually try and touch base about once a month and only spoke to them a few days ago. I don’t really have a lot more to ask them after what we already know and what today’s RNS says. Adding both of those things together, it is pretty clear where we are at on all fronts apart from potential new deals.
I will probably check in with them again late Oct / early Nov depending on what we see over the next 4/5 weeks.
Also if you could check if that additional significant deal that they talked about still on before December or not.
Rockyride - I hate to do this to you mate but I continue to look forward to your periodic updates from IR. In the next 2 and half months............ I am sure there will be plenty if we are to run the full deadline again.
If and when you do, could you please ask will there be other news in the period surely not another 2 months of silence............................
I would expect the company to still keep things busy like the Amocon gas deal announcment etc.........................
Mr B - admittedly there could be work-streams still ongoing but I rather suspect that he is playing the long game with the government to watch how they play their hand over a period of time. This is a well used tactic in negotiation / deal finalisation and takes me back a few years to some of my training courses on closing corporate deals.
Disappointed there isn’t any meat on the bone in relation the SS acquisition in view of the recent shenanigans from the Govt. I appreciate AK’s hands are tied in relation to what he can or can’t say but there’s been radio silence, not even an RNS to explain the current situation when reports of Govt interference first appeared in the press
It just feels like AK is hiding behind the 3 month extension and kicking the can further down the road.
Morning Z - one quick question if I may please?
If as you say we would be debt free in 2 years, should we not choose to spend NOI on “other stuff”, how can we be in such a pickle with existing debt and desperately need to refinance it before it causes us to stop operating as a going concern?
I know we are looking to extend the debt terms to match our long term gas contacts (are there about 15/16 years left on them) but I am not looking forward to the interest rates. At best i think we will be forced to take 10% + LIBOR.
Oh and one more, although I can’t remember our 2P number, what would you see our valuation to be today with 2P (which I know you will document for me), 25kboepd and next debt of $440m?
Still going over the accounts from 7am. The one off devaluation of the Naira accounts for about a $54m hit.
While the going concern statement may look worrying. The notes to this are more upbeat further down on rescheduling term or the actual refinancing.
Staff costs have crept up and if the transactions for the acquisitions don’t go through, then they could take the decision to cut those back. A lot of savings could and can be made but we have to wait to see how S . Sudan or any other acquisition pans out this year.
There’s a fair amount of one off costs with the transactions which hadn’t given any ongoing benefit. At least one new net contract and increased gas amounts added in the last 6 weeks. Plenty of income and increasing so hopefully this will overcome last reporting period given we are virtually in Q4 now. If those acquisitions don’t materialise they could cut the bloat for them along with interest savings under a new refinancing agreement.
RR looks like you need to have another engagement with IR.
I vaguely remember from some posts that according to the company the devaluation is of no effect or even beneficial to us? I didn’t quite understand at the the time and wondered how could that be. This is actually very worrying. We need Zengas and Zone and other clever posters.
I did suggest some time back that the interims would be ugly and the fx hit and interest burden would be significant. Annoyingly, this seems to have been correct.
I have particular concerns over the Going Concern paragraphs of note 2. The penultimate paragraph (extract below) is worrying and, to be honest, I didn't fully understand it.
"A detailed credit-approved term sheet has been executed with lenders for a new Naira denominated debt facility (the "Transitional Facility"). Whilst the process continues apace, Accugas did not have a long-dated extension for the refinancing process at the reporting date beyond the period of the going concern review. As such the balance outstanding of the Accugas US$ Facility continues to be reflected within current borrowings until the Transitional Facility is in place...."
I think liquidity to offload NGN is just pretty much non-existent for big tickets, even after the peg removal. And we're getting paid in NGN for our USD receivables.
Rob, read that and it needs to happen before we resume trading but these results do not make good reading
RR - this has to be Number 1 priority by a country mile as this is the note on the other board from C7 that Tier alludes to:-
We draw attention to note 2 of the condensed set of financial statements which explains that the Group's ability to continue as a going concern is dependent on either the ongoing support from its lenders to amend the terms of the Accugas US$ debt facility or a refinancing of that the facility. As stated in note 2, these conditions, along with the other matters referred to in note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our conclusion is not modified in respect of this matter.
Shareholder have received nothing. What happened to the dividends we were promised years ago?
Nigeria gets its gas, and the lenders cream off 13.5% on increasing debt.
I'm starting to worry that AK will walk, how long have we waited for his promised refinancing of the debt?
Going concern warnings are ominous.
Niger is fecked, C&C is f3cked and SS is a complete basket case.
I'd happily take 20p just to be rid of this utter car crash.
From the report - Debt:
Work continues on the proposed refinancing of the Accugas US$ debt facility (as was detailed in the 2022 Annual Report). A detailed term sheet has been executed with a consortium of lenders for the provision of a Naira-denominated Transitional Facility and it is anticipated this will be finalised in Q4 2023.
I’m a little concerned as per Ch7’s post on the other board. Anyone’s opinion? Why is this refinancing taking this long? If we resume trading now it’ll be in the teens. We now desperately need another big deal in Nigeria.