Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Thanks folks
As long as both parties feel the deal is still on and can be completed we can continue to be granted extension. Personally feel this deal will go into next year and probably a new extension of 31st March 2024.
Hubs - my understanding is that these types of deals have long-stop dates which do what they say on the tin. However, if ALL concerned parties agree to an extension and there is a realistic chance of the deal completing they can be extended.
But for reference, read the WEN RNS yesterday.
If the deal remains live, we stay suspended.
I'd be happy to be suspended a year from now if this deal still has a decent chance of completion on terms that satisfy our BoD.
That said, Patrick Heinisch's recent posts on x.com don't provide much comfort on the local politics.
https://twitter.com/PatrickHeinisc1/status/1723992924235448388
My understanding is that the reason we are suspended is because of the RTO status of the SS deal. If that deal is not complete by mid December and there isnt the possibility of an extension; is that the end of it? Is an extension a possibility if we are close?? Does anyone have experience of these things?
A brief video re SAVE’s scholarship sponsor scheme.
Good PR for accugas.
https://m.youtube.com/watch?v=FhcZci6bcl4
Tweet on X a bit earlier today:-
#Savannah was pleased to participate in the inaugural Nigerian Electricity Supply Industry (“NESI”) Market Participants & Stakeholder Roundtable 2023. The conference discussed the accomplishments, challenges, opportunities and prospects of the Nigerian Electricity Supply Industry, 10 years after its privatisation in 2013. #Savannah’s Head of Commercial, Oge Peters, was on the panel to discuss the topic: “Gas to Power: Challenges and the way forward”. Oge spoke about Savannah’s contribution to the Nigerian domestic gas market and power sector, where we currently supply gas enabling c. 20% of Nigeria’s thermal power generation capacity, as well as supplying gas to power for a number of industrial customers. He advocated a more attractive gas market with the right incentives to encourage domestic producers of gas.
‘but I would still expect a successful SS deal to re-list us at >50p.’
Cloud cuckoo land
Maurel and Prom not getting it easy either on getting deals over the line. Report in todays AI that Gabon govt is preparing to pre-empt on their $730m purchase of the Assala assets. Comes on the heels of not getting their takeover of Wentworths Tanzanian assets interest.
Let's see what happens here with regards to news in the next 5 weeks with a view to readmission.
Well so far, any official stuff we have read says the pipeline and production have not been affected by the war in Sudan. But as we are all aware, as the war continues, there has to be a dark cloud sitting over the pipeline. This is why it’s imperative that when the balance payment is known ($1.25bn - the amount of economic interest credit from maybe as far back as 1/1//22) and I’m expecting it to be somewhere around $400m to $500m, that we split as much as possible of the payment into future production payments. I really want to see the debt we take on kept to a bare minimum. Maybe something like $200m to $250m of debt and the same to be paid from future production.
That would then give us in total for the company about 75kboepd of production, a maximum of $600m debt, I would hope for 2P to be >400mboe and 1.4bn shares fully diluted.
Yes we will get discounted due to everything thats going on and especially the war in Sudan, but I would still expect a successful SS deal to re-list us at >50p. then we have Niger to come on line at some point, 4 x ICC awards hopefully in our favour and organic growth / new customers when the compression upgrade is completed next year.
Thanks CYB. Hopefully it won’t impact SAVE’s negotiations.
But the terms have already been agreed?
SS - I fear that if the deal closes share price will not react too positively as we’d like to, but will react fairly negatively if no deal.
Again hopefully I’ll be proven very wrong.
Maria seems to be on a path to recovery so I wonder if Savannah are waiting to see how much it recovers by before executing on the re-financing debt.
Perhaps if they think it can recover strongly back to the parity post the de-pegging earlier in the year could mean in could recover a significant portion of the fx loses back
https://newtelegraphng.com/naira-appreciates-against-dollar-amid-cbns-forex-initiative/
The military leaders who took power in Niger this year have commissioned a giant pipeline that will carry crude oil to neighbouring Benin, public television said Wednesday.
The nearly 2,000-kilometre-long oil pipeline will allow Niger -- one of the world's poorest countries -- to sell its crude on the international market for the first time, via the Benin port of Seme.
A commissioning ceremony was held at the Agadem oil site, more than 1,700 kilometres (around 1,500 miles) from the capital Niamey, in the desert region of Diffa.
Prime Minister Ali Mahaman Lamine Zeine said the resources from exploitation would be used to "ensure the sovereignty and development of our country".
The border between Niger and Benin is closed following heavy sanctions imposed by the Economic Community of West African States (ECOWAS) after the July 26 military takeover.
Energy ministers from Mali and Burkina Faso -- who have showed support to Niger's new leaders and have both undergone military coups in the past two years -- were present at the ceremony.
The pipeline project was supposed to be completed in 2022 but was delayed by the Covid-19 pandemic, the project owner told AFP.
The oil is extracted by the China National Petroleum Corporation (CNPC).
Some $6 billion has been invested in the project, according to Niger's government, including $4 billion to develop the oil fields and $2.3 billion for the construction of the pipeline.
It says this investment has allowed the country to increase oil production to 110,000 barrels per day, with an official target to increase to 200,000 barrels per day by 2026.
Niger, where the military seized power on July 26 by overthrowing elected president Mohamed Bazoum, had seen mass protests calling for troops of former colonial ruler France to leave.
As well as the ECOWAS sanctions, many Western countries have cut off development aid to Niger.
The World Bank has warned that GDP growth is set to fall to 2.3 percent this year if international sanctions continue.
https://www.barrons.com/amp/news/niger-commissions-oil-pipeline-to-benin-be4376ef
https://www.africaintelligence.com/west-africa/2023/11/01/niger-junta-to-inaugurate-unfinished-cnpc-oil-pipeline,110083558-art
Have at least 1GW of contracted renewables - put back to 2024
Refinance debt - guidance says this will still happen
Test Niger discoveries - put back to 2024 but saves $30m 2023 CAPEX
Close South Sudan Petronas deal - guidance says will be hit
Close at least 1 other hydrocarbon acquisition - radio silence but who knows?
From the 5 - is certainly be happy if they delivered on Debt and SS deals but I guess there is a possibility we deliver 0/5.
Hi scotpak,
I agree, but my point was that if we don't get it refinanced and we aren't able to swing our Naira balance to USD and pay off a chunk of the existing debt, then we're going to find this world of debt and fx exposure pain continuing for some time.
Guys, it doesnt matter if the interest rate on the new debt deal is high. Remember they are refinancing a USD term loan using a new Naira-denominated loan. Thus if you are selling gas to Nigerian govt entities at a USD referenced rate and then are paying your financing costs in Naira, even if the interest rate is 10%+, its not a huge deal.
Hi Rocky
The Chad settlement timeframe suggestions were LST's, not mine; and I think he was just throwing an idea out there (not wishing to speak for him, of course).
For the record, I expect no settlement at all on Chad and I certainly wouldn't want us to take on operatorship again there. It is simply too risky, both financially and reputationally. Since we've allegedly had Nicholas de Blanpré at the pointy end of a gun from these punters, that's a hard pass from me.
Additionally, the Chadian's can't easily offer us operatorship again: it would be politically weak and they'd lose face. They might offer a financial settlement, but I doubt it would be particularly attractive: how do they fund it? And management surely says "see you in Paris (and New York)" if the Savannah case is as strong as we think it is.
The main share price movers that we know about from the suspension date are:
Debt restructure (we pay a significantly higher interest rate now);
FX losses (which may not have finished yet);
SS (of course).
Chad/Cameroon settlement is a long way off, maybe two or three years (in my opinion) though of course as LST posted, the expropriation isn't priced in: thus mark it to zero. Niger was valued at zero by the market before suspension and will remain at zero after.
As TIL rightly says, estimates of the SP are anyone's guess. My punt at 15 pence if SS aborts is based around my DCF model which I shared in the last week of August. But it's still a punt.
Best wishes
Rockyride - Part of me thinks that the reason why we haven't had news on accugas debt re-structure even though they have said many times that the term sheet is in place is probably because there may be some linkage to the overall debt package we may procure for the South Sudan Deal. Otherwise it seems an awful long time from having a term sheet to formally close the financing for accugas..................
they may be certain co-dependency's
CYB - I think 6 weeks for any potential Chad out of court settlement is a bit soon but I hope we have a chance to work on a deal like that. I believe AK is holding all the trump cards on that one and would be able to be VERY firm with any negotiation.
Conversely, SS know the massive importance to AK for the Petronas deal and he won’t be holding as many trump cards on that one. Whilst there not be any other ‘real’ acquirers, I think that if the SS Government say to AK ‘jump’ his reply would rapidly be’ how high’!
I’m with others here, let’s get this debt deal done to really underpin and stabilise the company but I am expecting something like 8% + LIBOR which will be pretty hard to stomach. But let’s not forget we still have nearly $4bn of Gas revenues in Nigeria over the next 15 years and that should significantly grow next year when the compression project is completed.
Like others I am massively hungry for some updates which to be honest, on the debt front could come at anytime.
SP is anybody guess really don't think there is a science to it. let's all hope that AK and the Board pull a few rabbits out the hat...................
TIL Sorry but i don't agree with you re opening price with no deal. Negatives to share price since suspension
Chad deal in the courts and nationalized (we haven't traded since these were announed)
Coup in Niger (We won't be producing there anytime soon and we have tipped hundreds of millions into this)
As yet no debt restructure and we have seen interest rates change hugely since Dec 2022
Big hit on currency conversion
These are Big negatives and this is aim so sorry i greatly respect your input but these will be recived with negativity if no deal.
However these can be negated with, Debt re structure announced and deal concluded , and who knows a Chad settlement in the next 6 weeks.
The latter being my hopes.
One thing I would say now is having our chairman on board who is fully focused on Savannah Energy post his EY role, would hopefully support AK quiet a lot so if AK is tied up in one country our chairman can be representing the company in other territories although it;s not within a typical chairman remit but considering our Chairman is african energy law expert I am sure he could be out there sounding out other acquisitions and building relationship at senior government and ministerial levels. I believe his value will be realised in time and can not be measure he has also helped a number of countries in african draft their petroleum laws so he would know many jurisdictions inside out
Cautionyourblast - Personally don't think we would be 15p, the business is far more resilient than that and at 26p neither Chad or South Sudan was priced in. Besides with the accugas CPF, debt restructure, potential Niger start up, chairman purchasing shares at suspended price of 26p, I see we are at fair value at present. The market could view the south sudan deal not completing as a positive to the contrary as well considering the jurisdiction of the asset and could think that long term we dodged a bullet.
But it all depends on how the company keeps the market appraised and I am not referring to just deals, I am referring to all operational things, such as Debt restructure and plans for Niger and anything else that they may or may not be working on...............................................