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OML 13 development is a key NNPC's Seven Critical Gas Development Projects and thus will affect is and massively underpin the accugas business and provide for material growth.
Cluster development of OML 13 to support the
expansion of Accugas Uquo Gas Plant
400 mmscfd expected volume or circa 70,000 boepd
Cluster gas development of OML 13 with 2Preserves of ~5Tcf
Expansion of the existing Accugas Uquo Gas Plant
Development of the Trans-Nigeria Gas Pipeline to transport the processed gas further to the domestic market from Ukanafun
A detailed report - https://www.ashurst.com/en/insights/nigerias-energy-transition/
Looking at the list of 7 gas projects our project is most likely to be monetised quickly with existing pipeline in place but also the Uquo gas compression project already under way and we all know our pipeline has a capacity of 600 mmscfd with accugas probably only utilising 200 mmscfd fits perfectly with that 400 mmscfd expected volume.
Some additional info on OML 13
https://www.offshore-technology.com/data-insights/oil-gas-field-profile-oml-13-conventional-gas-field-nigeria/?cf-view
https://www.woodmac.com/reports/upstream-oil-and-gas-oml-13-67681449/
With our pipeline being the only gas pipeline that runs through the OML 13 licence I am sure we can be big winners of the planned oil and gas development . In this licence area
https://www.thisdaylive.com/index.php/2023/04/10/with-89-expected-assets-nigeria-to-top-africas-upcoming-oil-gas-projects-by-2027
https://saharareporters.com/2019/07/24/nnpc-signs-315bn-deal-financing-oml-13
https://energycapitalpower.com/top-upstream-oil-gas-projects-nigeria-23-27/
“Nigerian National Petroleum Company Limited (NNPC) through its upstream subsidiary and Natural Oilfield Services Limited (NOSL), an indigenous operator, are jointly handling exploration work on OML 13.It’s a large block in Akwa Ibom State, Nigeria’s oil rich Niger Delta and is reported to hold in place volumes of over 900 million barrels of oil and 5 trillion cubic (tcf) of gas.Nigeria has also recently concluded the bidding and award process for about 57 marginal fields which, other things being equal, would likely begin to produce first oil from the end of 2023”
Savannah has previously said there is 10 tcf plus gas in OML 13 licence which is basically our pipeline network runs through.
The CPF completion is perfectly timed in my opinion and I can see us fully capitalising on the developments happening in OML 13. Plenty of Amocon style deals are likely to be done. They did say Amocon deal will serve as a template.
Probably makes sense that they might want to keep some spare capacity available in readiness for when OML 13 production kicks off..
Our pipeline in someway was probably the smartest move AK made when going for accugas asset. Having the right geographically placed midstream asset can be invaluable as demonstrated by the accugas pipeline.
I believe when we went for Exxon chad DOBA asset it was the same thinking to have the Cotco pipeline as midstream assets in and around oil and gas fields can prove to be invaluable every producer has to use them if there are no alternative export routes.
If oil and gas fields come online in OML 13 then we will be massive winners of this. Which is why I believe Savannah energy has continued to hire in regions like uyo and eket as they might be ready to exploit the potential development that is to come from OML 13 lease
Absolutely
Longshort - with or without South Sudan deal I would expect a comprehensive operational update on Nigeria and Niger and also the forward strategy considering we have had nothing of that sort for over a year now.
That was meant to read especially without a SS deal, apologies
Good find TIL, yes lets hope Save are already ahead of the game on this with required equipment already in Benin just waiting to be moved to site progression here is very important in my view as it hasn't been reflected in the share price now for years but with the coup happening during suspension there would be a negative impact on SP especially with a SS deal.
Lets hope we get an early Jan update on Progress on Nigeria, now Niger followed by ad doc admission with SS complete.
Well thats my 2024 wishlist.
Hope everyone had an amazing Christmas break
Looks like Benin has opened it's borders for goods import into Niger, time for savannah energy to now be aggressive and start importing goods into Niger to get things in motion for well test.
My guess is this move is driven by both the countries alongside CNPC to get the pipeline exporting crude in the new year and that probably requires goods and material for oil fields operation
https://www.africanews.com/2023/12/28/benin-removes-suspension-of-transiting-goods-to-niger//
With import of goods opening from benin port and starting of export pipeline let's hope savannah can now take Niger a lot more seriously and start to be aggressive.
I am quietly feeling optimistic about Niger now and it's slowly starting to come back into play.
Ta komak, I was just about to post the same having put my earlier post up without researching the Harbour/Wintershall deal.
It's not one rule for them and one rule for us :)
*RNS
From the Harbour RENS
'Conditions to closing
The Acquisition constitutes a reverse takeover for the purposes of the Listing Rules for Harbour, with the intention that Harbour applies to retain its premium London listing on completion. Harbour will seek shareholder approval and re-admission of its Ordinary Shares and admission of the new Ordinary Shares upon completion to the premium listing segment of the Official List of the Financial Conduct Authority (the "FCA") (or a listing on the single category for equity shares in commercial companies if such new listing category, as contemplated in FCA Consultation Paper CP23/31, has been implemented by the FCA and taken effect at the relevant time) and to trading on the main market for listed securities of the London Stock Exchange. Harbour will, in due course, issue a circular to its shareholders to convene a general meeting to seek approval of the Acquisition and publish a prospectus.
The Acquisition is subject to, amongst other things, regulatory, antitrust and foreign direct investment approvals, as well as Harbour shareholder approval. Completion of the Acquisition is expected to occur in Q4 2024.'
I’m a bit confused too as Harbours current market cap is just over $3bn and their acquisition RNS states:- Under the terms of the business combination agreement entered into between Harbour, BASF and LetterOne (the " BCA " ), Harbour will acquire the Target Portfolio for $11.2 billion
A reverse takeover is, essentially, an acquisition by a listed company or its subsidiary of a business, company or assets (target) where the size of the target is larger than the listed company itself or which would result in a fundamental change in the business, the board or voting control of the listed company.
With us it has been, with Harbour and Seplat it hasn't.
Does anyone know why we are always suspended when we announce an RTO yet others (e.g. Harbour, Seplat) have continued trading after announcing their deals?
TiL - I’m with you on a diverse PF with some assets outside of Africa and I’m becoming a bigger fan of SE Asia.
Additionally and I know hindsight is great, but I’ve never been a fan of companies buying companies bigger than themselves. Yes, I get it that AK says smaller deals come with as much hassle as large deals “so we only do big ones”! But they all have “high hassle” they also come with “high risk”.
I would have liked to see 5/6 10kboepd deals taken on to land 2/3 which would still be huge to Savannah.
And I’m not being negative but simply stating facts here:-
1 After 8/9 years since IPO our SP is only 50% of our list price.
2 Since the Accugas deal 4/5 years ago, we have not seen a single $ from inorganic acquisitions and spent around $40m in transaction costs, massively diluted and added $2m / $3m to our debt stack.
Should SS fail, we CAN NOT take on any more RTO size deals and we have to do some stuff outside of Africa.
Brilliant RNS from Harbour Energy yesterday also Afentra doing well and securing 2/3 approvals for their deals. Goes to show if done right there are always other deals out there.
I wish Savannah would pivot away from project that matter strategy in africa and look at other regions. It would be easier to finance those acquisitions and easier on the approvals front.
I must say I am slightly jealous to say the least that others are managing to do deals and we don't yet know what's happening with ours. Here is hoping to Savannah bringing south sudan or another deal successfully to the market via an admission document, no matter how big or small the deal is.
Angola has decided to leave Opec with Quota disputes, could this be a new trend amongst top african producing nations as they try to maximise there hydrocarbons, wouldn't surprise me if Nigeria is to also go down this path soon, other may follow.
https://www.reuters.com/business/energy/angolan-president-approves-opec-withdrawal-statement-2023-12-21/
African countries in summary are done playing with the west and now we will see many try to put their interest ahead of west. It would be interesting to see how Saudi and Russia respond to this. Are the wheels finally coming of the opec cartel. Don't think there will be any winners out of this if the market is flooded with supply than. All 3 top producers will suffer:
1) US will suffer as shale has a high price of breakeven.
2) Russia and Saudi budget is heavily reliant on oil price at certain level.
Fully concur we should really aim to to get accugas producing 50,000 Boepd at stable consisent rates and pay down as a much debt as possible, whilst re-financing. Work up a solid plan for Niger and be aggressive once export pipeline commences. These acquisitions are only good when they come of successfully but most governments in Africa will either nationalise or majors will sell to local players so the I believe the perceived opportunity from African investment is no longer exists would love to be proven wrong but that is just my view
The French remain 100% out of favour in Niger. I wonder what the relationship is like between Chad / the French and more importantly between the ‘current’ Chad rulers and Perenco?
Niger coup leaders expel French, but not US, troops fighting jihadists https://www.bbc.co.uk/news/world-africa-67772422
And FWIW I’d do the following if I was AK:-
Strictly manage SG&A.
Refinance debt ASAP.
Put future business development (apart from in Nigeria) M&A on hold.
Put renewable projects on the back burner (pardon the pun) as African Governments take this as seriously as the West.
Direct the saved CAPEX from Niger well test and EVERY other spare penny in to reducing our very expensive debt.
Concentrate 100% on getting compression completed and adding new customers.
Commence Niger well test only when things have proven to be stable.
Work through the 4 x ICC cases and only start incurring large acquisition costs when we have positive awards and certainty we will see the $’s from the awards.
We have had a significant amount of bad luck over recent times and we can’t keep running forward at pace anymore and need a period of consolidation. Controversial I know but this is my view and I’m open for debate.
Greetings across the pond. 16:33 here.
Disappointed as nothing delivered as promised. No SS deal, no refinance, no new contract. I’m not as detailed as you are Rocky, I’m just aware of the obvious ones on the list.
Getting a bit late in the year for a decent RNS. Just flicked though SVE’s latest presentation and there are 13 KPI’s still stated to be delivered by the end of 2023. Obviously I’m interested in all 13 but the main ones are as follows with my comment against each one in brackets:-
1 To have 1GW of renewables in motion (We have 525MW announced in motion but can’t see as we are making much progress on any of the 3 contracts that make up the 525MW. Like TiL, I’d like us to get a contracted deal in place in Nigeria and am a bit surprised we’ve not seen something announced by now).
2 To well test or 5 discoveries / 33m 2C in Niger (can’t really see this happening until mid / late 2024 now at best)
3 Close South Sudan RTO (simply not going to happen TY)
4 Close at least 1 more significant M&A inorganic hydrocarbon deal (not going to happen as an SPA being signed or similar would have needed to be announced by now)
5 Close the Accugas debt refinance (I have recently been told that this is still expected to close TY but it’s getting tight now)
Anyway, let’s hope we get a BAU update with some decent information in it before the end of the year and hopefully before Christmas. I have a sneaky feeling we may see something tomorrow or Friday.
Rumours that Wcat PSA has been signed and sp up 70%. If true maybe ours will follow shortly, fingers crossed.
RR it would be nice but not sure achievable, with AK being a finance man would have thought he would have had this over the line by now.
LST - maybe wishful thinking on my part but I’m hoping AK has been waiting a bit for Naira stability before pushing the button on our debt refinance deal. Additionally I wonder if it could possibly be linked somehow as a tracker deal similar to some UK mortgages? Ie if and when Naira trades better we track the movements for our interest payments. One way or another it’s way beyond time for us to see this deal closed.