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South Sudan Press picking up the Puot Kang Chol sky news story - https://www.eyeradio.org/kang-oil-is-south-sudans-only-steppingstone-to-renewable-energy/
Rockyride - let's hope we all get news that we deserve as soon as possible with government sign off as well. Taking economic effective date into account I would be very surprised if the closing price is not at the very least sub $700m, obviously it could be even lower. I am hoping that 19 months or so of economic effective date if still 01.01.2022 as reported by a few on here previously will enable us to avoid an equity raise. Hopefully a few additional months than the original anticipated closing date would have negated the chad doba oil field revenues that may have been factored into the deal.
Obviously we would all prefer the deal to be done with cash and debt as per the RNS back in December. However, as you rightly say, assumed revenue from Doba was probably in the equation back then, so I’d guess the mix of funding will have changed significantly since day 1. And also let’s not forget that every day that goes by, the final payment will be reducing nicely, especially with the rising price of oil. Very crudely (pardon the pun) on a wild guess of $30 per barrel to SAVE and 50k per day the headline figure of $1.25bn would be reducing by $1.5m per day and has probably averaged more than that over the 19 months (if 1//1/22 was the economic interest date) due to >$100 oil during 2022. So if the $1.25bn did remain as the starting point, what is the balance payment due? Maybe ($1.25bn - ($1.5m per day x 575 days)) = $387.5m to pay. AM I MISSING SOMETHING HERE AS THAT SEEMS A RIDICULOUSLY LOW SETTLEMENT PAYMENT? Zengas IZ PF help please?
But for this note, I’ll carry on with $387.5m to pay and how would this be funded? Cash and or debt and or equity? Did the primary finance providers insist on AK providing a junior loan and could something like this happen again? We can assume cash is more limited now without Doba and I hope not to see issue of equity. So personally I’d like to see the balance 100% debt funded but am not sure if I’m hoping that pigs fly!!! But with the uncertainly linked to the security of the export pipeline through Sudan, I’d guess that the typical debt funders would be extremely nervous. And as Petronas want out and much as we want in, could the remaining debt be taken on by them and linked to SS production? Yes, I maybe dreaming and this would be absolutely perfect in theory to SAVE and ourselves and I’d hope that it could be a possibility. $387.5m to Petronas is small change and would be paid for with another 259 days of production based on the numbers above from 1/8/23.
Another thing which is perfect in theory would be a full completion RNS on Friday with explicit government sign-off. And who knows, it may already be signed and we’re just waiting for the ink to dry before somebody changes their mind and nationalises the SS oil LOL.
Finally let’s not forget that Accugas is making very healthy FCF every day
Accugas debt to be restructured to match the 15/16 years remaining of our contracted gas
Niger oil test and first oil getting very close now
Another >475MW of renewable business to be signed in 2023
At least 1 more hydrocarbon deal signed and maybe completed in 2023 (my guess is Cameroon)
And hopefully no more suspensions although I fear we will if SS should fai.
Court award for Doba & Totco in our favour and >$1bn awarded to SAVE taken from production at the point of sale in Cameroon - OUCH to the Niger administration.
One way or another it should be a VERY interesting 12 to 18 months and a sincere GLA.
Robberyrob - Apologies I am not trying to mislead in any shape or form I was just seeing what the extreme scenario would look like if they did a raise so i did numbers to the extreme up to 2 billion shares in issue, I am not saying that will happen and fully agree that the company did say no use of equity is likely................
However with that being said a modest equity raise can also not be ruled out as well they raised $65 million dollars for the last deal at suspended price of 19.35p so wouldn't be surprised if they raised a little through the use of equity this time round too. The comment around them mentioning that they will use cash at hand and debt was on the SPA announcement on 12th December, but at that point they probably thought they would have had access to our 8,000 bopd net share of doba revenues................
Also they might get the fundraise out the way alongside this deal so they don't need to use equity for the following deal, if the following deal is also close to being wrapped up this year as Andrew suggested delivering another significant m&a opportunity this year.
Why are you talking about equity raise so much? The company have previously stated this is not the intention.
Not having a dig, just wondering why this keeps coming up.
An equity raise would be a bit of a failure at the moment to my way of thinking. They have previously demonstrated they can get support from the sellers essentially, securing their divestment goals and clearly this is of benefit to SAVE. I would have thought that would be more likely, no?
Part 2
Market Cap at suspension @ £343 million assuming we complete south sudan acquisition at lets just say we use a very conservative increase in market cap of £700m on open and re-listing, so effectively an increase in market cap by £350 million.
Based on the above equity raise potential price targets on open
1.3 bn shares + 100 m = 1.4bn - £700m / 1400 = 0.500p open price - 50p
1.3 bn shares + 200 m = 1.5bn - £700m / 1500 = 0.466p open price – 46.6p
1.3 bn shares + 300 m = 1.6bn - £700m / 1600 = 0.437p open price – 43.7p
1.3 bn shares + 400 m = 1.7bn - £700m / 1700 = 0.411p open price – 41.1p
1.3 bn shares + 500 m = 1.8bn - £700m / 1800 = 0.388p open price – 38.8p
1.3 bn shares + 600 m = 1.9bn - £700m / 1900 = 0.368p open price – 36.8p
1.3 bn shares + 700 m = 2.0bn - £700m / 2000 = 0.35p open price – 35p
Please note the above does not take into account the complexities of the deal and the debt funding structure, this is purely based on issue of equity vs potential market cap gain if the transaction closes. Just simple equity vs share comparison. Obviously, it goes without saying the lower the equity dilution and the higher the market price will mean higher the share price on open and admission.
Current Shares in issue circa 1.3 billion worked up to 2.0 billion below:
Equity Raise Scenario’s if we complete Petronas South Sudan acquisition at suspension price of @26.25p:
100 Million @ 26.25p = £26,250,000 (USD - $33,800,000)
200 Million @ 26.25p = £52,500,000 (USD - $67,600,000)
300 Million @ 26.25p = £78,750,000 (USD - $101,000,000)
400 Million @ 26.25p = £105,000,000 (USD - $135,000,000)
500 Million @ 26.25p = £131,250,000 (USD - $169,000,000)
600 Million @ 26.25p = £157,500,000 (USD - $202,000,000)
700 Million @ 26.25p = £183,750,000 (USD - $236,000,000)
Market Cap at suspension @ £343 million assuming we complete south sudan acquisition at lets just say we use a very conservative increase in market cap of £500m on open and re-listing, so effectively an increase in market cap by £150 million.
Based on the above equity raise potential price targets on open
1.3 bn shares + 100 m = 1.4bn - £500m / 1400 = 0.357p open price - 35.7p
1.3 bn shares + 200 m = 1.5bn - £500m / 1500 = 0.333p open price – 33.3p
1.3 bn shares + 300 m = 1.6bn - £500m / 1600 = 0.312p open price – 31.2p
1.3 bn shares + 400 m = 1.7bn - £500m / 1700 = 0.294p open price – 29.4p
1.3 bn shares + 500 m = 1.8bn - £500m / 1800 = 0.277p open price – 27.7p
1.3 bn shares + 600 m = 1.9bn - £500m / 1900 = 0.263p open price – 26.3p
1.3 bn shares + 700 m = 2.0bn - £500m / 2000 = 0.250p open price – 25p
Market Cap at suspension @ £343 million assuming we complete south sudan acquisition at lets just say we use a very conservative increase in market cap of £600m on open and re-listing, so effectively an increase in market cap by £250 million.
Based on the above equity raise potential price targets on open
1.3 bn shares + 100 m = 1.4bn - £600m / 1400 = 0.428p open price - 42.8p
1.3 bn shares + 200 m = 1.5bn - £600m / 1500 = 0.400p open price – 40p
1.3 bn shares + 300 m = 1.6bn - £600m / 1600 = 0.375p open price – 37.5p
1.3 bn shares + 400 m = 1.7bn - £600m / 1700 = 0.352p open price – 35.2p
1.3 bn shares + 500 m = 1.8bn - £600m / 1800 = 0.333p open price – 33.3p
1.3 bn shares + 600 m = 1.9bn - £600m / 1900 = 0.315p open price – 31.5p
1.3 bn shares + 700 m = 2.0bn - £600m / 2000 = 0.30p open price – 30p
Zengas - when talking about valuations the other day and closing the gap on peers the easiest way to do this would be to listed on the main market alongside the completion of Petronas South Sudan acquisition that will help the enlarged company be valued more appropriately and would save the need to be listed in another exchange for the time being.
On a separate note even if we don#t receive the admission document this week we should definitely see a Q2 operational update as that has been long overdue at the very least.
He sure does sound like a pragmatic man the bit where he says that we are not opposed to transition, but should be "Just, equitable and inclusive". Also they are not opposed to renewable but need to increase revenue from oil, to transition into other sectors like agriculture and renewable.
I am sure we will also announce a few renewable deals in South Sudan as well like we have done in NIger, Chad, and Cameroon.
Thanks' for the post, the minister appears to be a very pragmatic politician.
One would assume that a joint comms plan is probably in place and finalised last week which will be worked through in the next few days and weeks. South Sudan clearly marketing its self for investment they have oil 14 blocks on offer and what Better way to attract other investors than to approve our deal to say South Sudan is officially open to business
Approval of our deal is a wider plan by the South Sudan government to attract many other partners.
Surely all of this is not a coincidence comms starting to step up over the weekend with the sky news interview talking about the South Sudan need for investment in the oil and gas sector, receiving an award this week in London for foreign direct investment.
https://youtu.be/QnB7fB9uTbc
Pout Kang Chol tweets 30 mins ago - https://twitter.com/puot_kang/status/1682776697500758016?s=46&t=bdVeLrGB139mDog1SFRNlw
Are the ducks starting to line up for a big week next week surely has to be it now…………………..
South Sudan Embassy in London tweet - “completion of their missions in London” - sounds very cryptic let’s hope the mission include us………………….. …
Happy to host Hon Minister Puot Chol @mop_ssd; Hon Minister Awut Acuil MP @MinistrySsd & Hon Eng Awow Chuang, Technical Advisor @mop_ssd for courtesy visits upon completion of their missions.
The Hon Ministers applauded the Embassy for work conducted & professionalism displays
https://twitter.com/southsudan_uk/status/1682505779172065281?s=46&t=bdVeLrGB139mDog1SFRNlw
I was just looking at the annual report this afternoon in detail. I couldn’t help but notice and didn’t know that they stated that they considering hydrocarbon acquisitions in Cameroon alongside further renewables so could that be a follow on deal which we could wrap up quickly
Page 68 annual report
Quote from Antonine Richard Chief Operating Officer Savannah
“We are actively working on further hydrocarbon and renewable energy asset opportunities in country”.
It was a sneaky way to put it in not many people ready the admission document word for word but I thought I would find time to see if something interesting popped up.
Suggest we could see a hydrocarbon deal in Cameroon quite quickly if they felt comfortable to quote as such also could come part of the admission document or quite quickly following.
Zengas - I couldn’t agree more, I believe Kosmos valuation is higher due to the fact that they are listed in the US too which probably gives it a premium……………… but saying that our organic growth capacity from accugas, Niger, and South Sudan hopefully post closing could give us the potential to close that gap between us and kosmos. Even without another acquisition after this and renewables aside.
On the renewables front I would prefer to keep it under one umbrella for now as is one of the many reasons that we are able to access capital for oil and gas acquisitions for now as finders look at the companies ESG profile. I would also like to get to first power on some renewable projects first or at least begin commissioning the development before a spin out is considered as they say stronger together for now……….
For the money man and deal maker that AK is, surely at some point he would seriously consider a dual listing on the NYSE -not just a move to the main market off AIM.
Oil Company valuations are much better compared to those in the UK. Even Shell is half that of its comparative US cousins.
This would give us even closer to parity on reserves, production, revenue and possible cash flow to Kosmos that has that dual listing.
Given that SAVE is already moving to become one of the biggest renewables investor in Africa and a target of 2.4 GW in motion in the next 17 months alone, surely the appeal for greater investor interest to lift the value must be significant.
AK himself is a very significant holder so i would be surprised if this will not be considered once the next few acquisitions are completed as i'm sure he'd rather have as much as possible for his shares from all possible value creation and recognition angles rather than less in the UK alone.
I think we will be undervalued in the UK alone and we will on all intents be both a very large oil & gas company and a major emerging renewables company.
Two things -
The SAVE oil/gas business should more reflect the growth to match that of Kosmos which itself is solely oil/gas - and by the way has no renewables arm.
KOS currently has a £2.46b m/cap and $2.1b/£1.64b net debt with 580 mmboe 2P & 61K boepd production.
The SAVE renewables arm could be floated off separately - but if not it should attract a significant valuation in its own right but i fear being part of a traditional oil/gas Co might be undervalued/misunderstood by being solely listed in the UK.
There must be valuations attributed to both in time.
Lekela Power with 1GW of operational African wind and a further 225 MW in development was sold for an enterprise value of $1.5b. I would hope to see our renewables division grow to a much greater level given the 240 GW African target by 2030.
https://news.cision.com/aker-horizons/r/mainstream-renewable-power-and-actis-complete-sale-of-lekela-power,c3736799
I suppose probably one of the many reasons why AK wants to stay on Aim, there is a lot more freedom to do this sort of things........
Morning TiL, I've looked through the FCA handbook and the Aim rules and I can't find anything that restricts the number of RTO's or any time limits . In the FCA handbook, where it talks about analysing balance sheets for previous years it refers to companies which have gone through an 'RTO or a series of RTOs', so I suspect there aren't and we can go from one RTO straight into another. Hopefully it isn't the case though!
I am going to be a devils advocate and say we will get an update next week to say they have extended by another month to 31st August 2023
Morning All,
For the more knowledgeable posters on here, can you answer a question I have, if we were to be re-admitted is there a set amount of time that we have to be trading for before we can or are allowed to grant another suspension.
I know silly question but i would have thought there must be some rules around back to back suspensions ?
Can't think further than this acquisition for now to be fair even though we know the company is on the hunt for lots more but they truly need to get this one over the line first
Rockyride - It would be nice to have 24 hours to actually study the document.......... personally not a huge fan of releasing the admission document and re-listing on the same day.....
On a separate I am guessing you haven't spoken to anyone from IR this week have you to assess the state of play.......... I was expecting at least a Q2 update similar to how they released a Q1 2023 update but i am guessing they probably holding of as it might tie in with admission document..................................... also if they released it they would be bound to give an status update on south sudan acquistion where they are not yet ready to provide on
Who thinks 4.30pm admission document and then trading resumes Monday 8.00am?
28/7/23 and 31/7/23 that is. And then a new SPA signed for >10kboepd on Tuesday 1st August LOL
Right now my wish is to see S. Sudan completed on non recourse debt terms and not so much COTCo given where our size will hopefully soon be.
If as i hope S.Sudan circa 300 mmbls reserves and 50-55k bopd = possible $1.3-$1.5b revenue + i believe Accugas should be circa $300m revenue after that last gas contract = $1.6-$1.8b.
There's a 2nd Hydrocarbon asset top come by year end - but if it's 5-10-15k or more bopd region its possibly another $135m - $400m+ revenue range to think about, it all depends on how small or big the next deal is (and more than 1 possible).
Right now the S.Sudan deal is reducing in cost until completed.
As for Exxon Chad - let'stake it in our stride and context of overall lost immediate revenue - it's with the ICC as the proper course. End of the day we win the case or don't and Chads oil has to load at Kribi and leave the Cameroon coast by ship for international markets if we win.
We lost out on the 22.5K bopd revenue from Chad Exxon/Petronas - about $600m + a combined revenue for TOTCo + COCTCo of $152m - so in all the 2 deals were worth an expected revenue region of $750m.
Overall that would have meant we would have been on a revenue guide of about $2.35b - $2.55b by now ahead of the intended acquistion beyond S.Sudan -so thats how close we were and maybe still are depending on the next deals by this year end and '24.
Our remaining 41% COTCo revenue share should still account for $75-$80m as the pipeline element was about 90% COTCo to 10% TOTCo.
Nigeria/Accugas $300m, S.Sudan estimate $1.3-$1.5b and on deal completion see us on $1.7b - $1.9b revenue ahead of the next follow on hydrocarbon deals.
As for S.Sudan i think they will derisk it further by building on a few more geographically spread hydrocarbon deals ('at least 1' by this year end) and to me its the unfortunate order they come to market in as on how risk is percieved now - versus a few more deals under our belt when non recourse to the company.