Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Https://twitter.com/JavierBlas/status/1752617731143192648
*Sigh*
There goes another USD50m.
Https://www.southsudanminingjournal.co/en/post/petroleum-minister-backs-inclusive,-fair-global-energy-transition-from-fossil-fuels/548
SP. Sort of with you on this. I look at energy projects for a living from a commercial perspective with a view to raising finance for them - used to be mainly O&G, but now more renewables. I learnt a while ago to pick my battles. Spent ages of 'free time' looking at projects which had a low chance of securing funding and moving forward - for all sorts of reasons, - Geol risk, Tech level, location, management. Still do the odd high risk/reward but they're rare. I didn't buy into SAVE originally with my punt money, so maybe looking for something others aren't. I hope in a few days I'll be eating my words, but besides Nigeria some of these locations they're putting a lot their eggs into (even if they get sanction) are too scary for me and I'll be taking some money off the table.
Rockyride - That's how I read the article as well, plus they did mention one other acquisition by end of 2023 and this was in the half year report so they clearly had runway to do another acquisition alongside SS whatever the outcome.
Although AI can never be 100% accurate, they tend to call more things right than wrong. I read it as we are looking at the Gabon deals to replace the CC lost production of circa 20k. They did not hint that we were looking at Gabon for any reason to SS failing, in fact quite the contrary. I see AI as seeing us as having up to 30k of solid very profitable business in Nigeria, bidding for 20k-45k in Gabon and hopefully closing circa 50k in SS. On top of that we have a reasonable % chance of a significant award fro ICC cases. Roll this lot forward 5 years + ARB production in Niger and all the renewable projects and you can see a huge company. However, my investment period is not 5 years from now, my investment period was 9 years from 2015. I have always said since day one (2015) that I want to completely restructure my finances in December 2024 and the clock is ticking for me. Hopefully I will retain a large SAVE holding post December but will only do this if it delivers a sizeable yield.
On Assala Gabon assets the articles implied that the bid deadline set was 20th Jan 2024, so I wonder if things are much more progressed on the Assala assets that yesterday article suggests, Yesterday's article may have been delayed reporting by Africa Intelligence
Fair Point Scotpak the article I posted yesterday seems to suggest that us pursuing Assala assets in Gabon is more a substitute for Chad rather than south sudan so let's see. Africa Intelligence still seems to suggest that SS is still on or at least the article yesterday seems to imply that. Now we can all sit here and guess how much we trust AI news sources, however they were very early in highlighting our interest in Petronas South Sudan assets so here is me hoping there comment is based on more credible actual intelligence from people close to the deal as supposed to a throw away comment based on conjecture on whats publicly available so far.
Given the nationalisation of Chad and the huge uncertainty over the closing of the South Sudan acquisition, why would Savannah even entertain this transaction. This isn't Andrew's personal gambling vehicle, this is a listed company with a group of shareholders. Aside from my annoyance, the question also has to be asked why they would even consider being involved. Is it because SS is also close to falling through? If we had done zero M&A, and just focused on generating free CF from nigerian business and paying down debt, perhaps we could have been in a much better position. Sorry guys, just typing out my thoughts. Obviously frustrated like many here given 2 years + of suspension.
Vitol seems to be the only trader / financier considering but they want a credible operator to manage the assets, I am guessing that's where Savannah comes in.............. I wonder if we go 50/50 split as yesterday article suggest that we are going for these assets due to Chad nationalisation. If we did get Chad Exxon and Petronas assets as originally intended that would have been circa 20,000 bopd. If we get 50/50 on the Assala assets than that would replace the 20,000 bopd that was intended from chad initially.
Plus going in with a joint bid with the government means approvals will not be an issue as long as Carlyle accept the bid and the Gabonese government want us a partner.
An extension on yesterday article referring to Gabon assala assets..........
"Vitol seems to be the trader most in tune with the government's aspirations. But it does not want to commit to a deal worth nearly a billion dollars without a serious operator capable of helping GOC in the management of complex oil assets."
Gabonese officials are working on a financial package that would enable them to pre-empt Carlyle's assets and to counter an offer from Maurel & Prom.
A team from the Gabon Oil Co (GOC) were in Paris on 17 and 18 January to address the crucial issue of the state's pre-emption of Carlyle's Gabonese assets (45,000 bpd). The delegation met with Carlyle managers and in particular Guido Funes Nova, the Italian who is in charge of the asset sale project. Carlyle wants more details on the financial package envisaged by GOC, and has given it until 20 January to submit its final offer.
After several months of negotiations between oil companies and Libreville, Vitol seems to be the trader most in tune with the government's aspirations (AI, 11/12/23). But it does not want to commit to a deal worth nearly a billion dollars without a serious operator capable of helping GOC in the management of complex oil assets.
Among the firms contacted by GOC is TotalEnergies, from whose ranks its managing director Marcellin Simba Ngabi comes. But the French major does not seem genuinely interested in investing in Gabon, and has in recent years been selling off its assets there (AI, 25/11/21).
Time is of the essence. By the end of 2021, Carlyle had launched the process of selling its Gabonese assets, which it had acquired from Shell in 2017 and then entrusted to Assala Energy. The US group announced last August that it had reached a sale agreement with Maurel & Prom of the Pertamina group.
Game-changer
Gabon's coup d'état on 30 August was a complete game-changer. The new regime quickly announced its intention to pre-empt these same assets (AI, 19/10/23). This was confirmed by junta leader Oligui Nguema in his address to the nation on 31 December. The new Gabonese administration has since then been scrambling to find the funds to counter Maurel & Prom's bid.
Maurel & Prom has since made it clear to its Gabonese counterparts that it is prepared to compromise. If the government agrees to its offer to buy Carlyle's assets, it will gladly sell part of its new holdings to GOC. However, during a trip to Libreville late last year, Maurel & Prom CEO Olivier de Langavant was not received by either the junta leader or any of his ministers.
Given the high value of the transaction, Maurel & Prom is confident. Its directors believe that it will be difficult for the government's teams to put together a convincing financial package and find a technical partner familiar with Gabon
Gabon
Savannah Energy joins the race for a share of Carlyle's oil assets
Savannah Energy, the oil company owned by British national Andrew Knott, wrote recently to the oil ministry with an offer to help it pre-empt the oil assets currently held by Carlyle group subsidiary Assala Energy (AI, 26/01/24). Savannah thus joins half a dozen other oil companies trying to cash in on the planned sale of the assets, which currently produce 45,000 barrels of oil per day. Previously owned by Shell, they have been operated by Assala since 2017.
A few days before the 30 August coup carried out by General Brice Clotaire Oligui Nguema, Maurel & Prom, a subsidiary of Indonesia's Pertamina oil group, announced that it had reached an agreement with Carlyle to acquire the latter's activities in Gabon. Since then, however, Gabon Oil Company (GOC) has officially exercised its pre-emption rights to prevent the sale from taking place. GOC is now looking for an operator and financial partner for the blocks.
Savannah is all the more interested in the Gabonese blocks for the fact that it faces having nationalised the Chadian assets it bought from ExxonMobil in 2022. Situated in the Doba Basin, these are currently producing 30,000 barrels per day. Savannah is, however, represented in Nigeria, Africa's biggest leading economy, thanks to the gas assets it acquired in the Niger delta from Seven Energy in 2019. In the next few weeks, moreover, it is also expected to complete the purchase of the interests of Malaysia's Petronas group in South Sudan in an operation it announced in 2022.
https://www.africaintelligence.com/central-africa/2024/01/30/savannah-energy-joins-the-race-for-a-share-of-carlyle-s-oil-assets,110153645-bre
To add further to that Zengas even Shell recent onshore sale to local independents will drag
https://blueprint.ng/coalition-rejects-shells-divestment-threatens-nationwide-protest-2/
Not all plain sailing for any of them. It's not unique to AK/Save but certainly frustrating being a shareholder.
Sepl has sufferred over the years from lost and shut in production over oil theft and major pipeline shut-ins causing force-majuere. In addition their gas build up has been slower than expected. Every trick in the book re court cases and attempts to kick the CEO out of the country - pretty hair raising on a one country focus.
Seplats deal with Exxon is still not cleared yet in Nigeria. In Oct 2023 they were still confident of it being approved.
First announced back on 25th Feb 2022 so almost 2 years and with an effective transaction date of 1/1/21 so now over 3 years in the making although some of the agreed terms have changed a little due to the deal taking so long and Exxons ongoing involvement.
M&P ran into problems with it's takeover of Wentworth first time around and now the Assala dea in Jeapordy.
Exxons sale on Zafiro turned sour and the FPSO sent for scrap.
Zenith relatively small assets in Tunisia (compared to Saves Chad) and suing for just over $85m.
Even Kosmos and it's partner Tullow had to go to arbitration claims to resolve their dispute.
You only have to look outside Africa and Cairns history in suing India for hundreds of millions.
As for where we are on the value ladder, I always use to to compare Seplat share price with our share price as there use to be a broad correlation between the 2 companies prior to suspension.... The Seplat share price has hit an all time high this wee and 75% up since the price at our time of suspension.
I know it's not comparing apples to apples, and probably more like apples to pears, but considering the positive correlation I would imagine there might be some read across from that perhaps not as much as 75% but a small read across of 15% - 25%, also with the fact that with every passing month we reduce overall debt and build cash...........
Zengas - Great analysis as ever I personally would be happy with extended suspension if it means it allows the company time to bring a significant deal to market. I think everyone on here knows that what savannah is trying to do is once in a lifetime opportunity, and with these opportunities nothing is ever as clear cut and simple as mentioned by a few already accugas took a while and now it's a top performing asset with material upside. Andrew strategy is not wrong as everyone is looking to deal make in Africa with majors selling some tasty assets we just need a bit of luck to come our way and there is nothing like additional time to close deals to swing the odds more in our favour.
I am cognisant of the fact that a lot of private investors are frustrated on here but the prize is such that can only be executed with patience as I like to call it the "ZEN" mindsight..............................
After todays news re Save and others chasing part of the Asssala (Gabon) assets it will be interesting (whether S.Sudan completes or not), to see where Save can establish itself on the value ladder. We still have no mention of the additional 'at least one more' hydrocarbon asset that was to be announced before end of 2023.
Current m/cap £348m and how net debt position looks 2 years on from possible effective S.Sudan Petronas date and 1 year of lost Chad production/pipeline interest re compensation outcome.
Our average gas price (2022) was $3.69 mcf.
Net 2P = 71.7 mmboe (excluding 33 mmbo Niger, excluding 55 mmbo Exxon Chad) Possible total 160 mmbo 2P if ICC favouarble re valuation restatement.
Production net 20,240 boepd H1 2023. (12,000 bopd lost from Chad) would be 32,000 boepd + pending possible 50,000 bopd/300 mmbo 2P from Sudan.
How will S.Sudan go and how will ICC rule on Chad compensation - Overall this would have placed us at around 450 mmboe 2P and circa 82,000 boepd (not to mention pipeline interest valautions in Nigeria, Chad and Cameroon) and a $2 billion/yr revenue profile at current oil prices.
Compared to Maurel and Proms current valuation -
211.26m shares in issue Euro 5.50/£4.70 = £992m m/cap
$120m net debt.
2023 figures = $682m revenue
Average oil price = $79.30. Gas Price $3.76 mcf.
Production 28,057 boepd ie (15,354 bopd Gabon, 4,103 bopd Angola, 51.6 mmcfd(8600 boepd) Tanzania.
2P Reserves = 182.2 mmboe (139.7 oil + 42.5 gas)
https://www.maureletprom.fr/en/investisseurs/cours-de-l-action
https://www.maureletprom.fr/en/investisseurs/communiques-de-presse
------------------------------
The price history of M&P was about 4 Euro/£3.40 when they announced the Assala deal rising to 7 euros /£6 in December 2023 now £4.70
Taking over ASSALA would have meant $730m at completion, rollover of Assala $600m facility gaining 40,700 bopd and 97 mmbo 2P.
M&P had 5,000 bopd kicking in from December with sanctions lifting in Venezuela but now seems possible that these are going to be resanctioned.
No news is no news.
Https://careers.savannah-energy.com/job/Victoria-Island-Senior-Compliance-Officer-LA/967565855/
https://careers.savannah-energy.com/job/Esit-Eket-Inventory-and-Material-Supervisor-AK/967562455/
Nigeria team continues to grow shows potential sign of the growth to come from accugas this year
I don't think Charlie Munger would have been very impressed with the last 12 months if he were a SAVE shareholder.
Locked in with limited information on company operations or SS acquisition.
Very poor.
I agree that patience is an important factor to successful investing, but imagine being invested here from 2014 or 2015.
Patience has its limit.
In that time no share price gain, no dividend payouts either.
Munger wouldn't invest in this share with AK trying to run the show.
Compare Knott to the CEOs of SEPL and Afentra, and you will see a huge difference in quality that is required required here.
Time to step aside AK.
Interesting that they have talked to Vitol and Vitol are pre-dominantly one of our backers on deals so could get interesting.......
Further details on Gabon government pre-emption rights................ $1.3bn a significant premium to what M&P offered nearly 100%...........
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/012924-signal-to-investors-gabon-junta-goes-for-broke-with-13-bil-assala-oil-pre-emption
https://www.intellinews.com/gabon-seeks-1-3bn-funding-to-buy-assala-oil-company-ahead-of-france-s-maurel-and-prom-310103/
Perhaps using a SS joint venture deal as a template?
By the wording looks like we will help the Gabonese government pre-empt so perhaps a joint bid...............
https://www.africaintelligence.com/central-africa/2024/01/30/savannah-energy-joins-the-race-for-a-share-of-carlyle-s-oil-assets,110153645-bre
Savannah Energy joins the race for a share of Carlyle's oil assets. Savannah Energy, the oil company owned by British national Andrew Knott, wrote recently to the oil ministry with an offer to help it pre-empt the oil assets currently held by Carlyle group subsidiary Assala Energy (AI, 26/01/24).3 hours ago
Interesting will probably pull out of suspension and no doubt another suspension for another asset.
Nicely put Kinkell, most people don't realise the value that the accugas asset will unlock this year with CPF completion. There is so much going right for the company still.
- Accugas will see material increase in volumes this year with CPF completion in a few months - No doubt in my mind
- Niger / Benin pipeline complete and on the cusp of commencing exports will mean a better plan for Savannah Niger programme.
- Should see some update on all ICC cases preferably H1 2024.
- Accugas debt re-structure - Hopefully some update in H1 2024
- Potential acquisitions south sudan or another
I truly believe based on organic growth during the suspension period and with every passing month reducing overall debt we should be fairly valued higher than our suspension price especially with whats to come with accugas in the next few months.