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I slightly disagree hear and don’t believe it’s as clear as that the whole intention is to freeze savannah out of the cotco holding entirely they wanted savannah to not have a board sit so they can than ask the banks to freeze their share of dividends from the asset. Until the company don’t confirm what the state of play is as it stands it’s safe to assume that there is more going on and they are probably awaiting legal advice on what it means for them in reality and probably exploring avenues for challenge.
The %'s mentioned in the last energy voice article you posted were SHT 53.77%, Cameroon 15.17% which leaves exactly 31.06% which is the amount SAVE acquired under the Exxon agreement, less the 10% they were proposing to sell to Cameroon. If that article is correct it would mean the the sale will be approved and SAVE will then only need to RNS the completion of that 10% sale. As Chad can't nationalise that part of the Exxon deal I'd be very surprised if that's not how it plays out regarding COTCO.
Rocky ride - I wonder if the recent Costco situation could affect the the admission document. If we lost control or our shareholding and are not due to benefit from its revenues than they might need to leave it out from the admission document.
Great to have you back posting, so helpful and mostly reassuring. Less reassuring is this article I came across on Cameroon
hTtps://www.theguardian.com/global-development/2023/jul/07/death-of-a-radio-host-the-web-of-corruption-lies-and-revenge-behind-the-killing-of-martinez-zogo?
I'm not that surprised but concerned nonetheless, me thinking they couldn't be as bad as Chad.
PF - great post that and great research. God knows how you’ve discovered all that. I think plan A will be option 3 and I think we could also see a couple of options 2’s bolted on as well. Let’s all hope we see the SS deal AD issued by 28th July. Only 15 trades until then and in theory it could drop any day from Monday onwards. However, as we know from experience, 28/7 must be the odds on favourite for either an AD to be issued or aRNS kicking it down the road a bit more. Or even a worst case scenario of an RNS saying deal cancelled.
AK has referred to further hydrocarbon acquisitions in 2023 and 2024. My understanding is to avoid a further suspension the acquisition cannot exceed 100% of the five class tests based on the year ended 31st December 2022 figures and in the case of the Consideration Test and Gross Capital Test - market value at date of acquisition.
1 Gross Assets Test- $1.761bn
2 Profits test - loss before tax and extraordinary items $53m
3 Turnover test - $212.5m
4 Consideration and
5 Gross Capital Test - MV £344m
The Profits Test and Turnover test appear to be the problem tests i.e. the acquisitions making a loss in excess of $53m and have a turnover of less than £212.5m (circa 8000bopd).
To avoid a further suspension there appear to be three options:
1 The next acquisition is in 2024 and the class tests are based on the 2023 figures (hopefully including SS) and hopefully a higher MV.
2 The acquisition is small and loss making.
3 An unconditional contract is signed and all due diligence completed by the time the SS contract completes and the next acquisition details are included in the Admission Document.
It is also possible the next conditional acquisition is announced at the same time SS completes or is abandoned and we are bounced straight into another suspension.
Smeddyo, nothing IR give out is price sensitive so I'm not sure what advantage you think is being gained over other investors. It can be useful to have them clarify certain things in RNS's or from presentations, and sometimes to confirm published plans are on track etc, so nothing untoward with getting information from them.
So you find the ability of somebody to get an inside track with IR a good thing do you? I think it stinks, but is what many in business do all the time. Faux bon homie to gain an advantage. Hence why the guy freaked over "assumption" of ownership. He knew what it meant and that it wasn't The Plan. This is investing / trading. Not the Waltons.
Agadem / rocky ride - so good to have you back mate missed you. Just having your presence in the background sometimes serves as a calm soothing effect amongst all the noise / news that circulates and your relationship with the company and IR has been truly remarkable to say the least no one has built that relationship with the company and even I struggle to sometimes get response from them. I must say like me a lot of people appreciate your updates when we are in a period of no official news so I hope if and when possible you keep that up.
As for all things savannah at the moment i hope that South Sudan closes and we close another acquisition of similar or greater size to chad which should neutralise the effects of the chad dispute until it’s sorted at tribunal. Not to forget the growth to come from the an accurate assets and Niger. We are now 3 weeks basically away from the new deadline of 28th July remains to be seen if we successfully meet it with South Sudan deal closure or whether we get a further extension. But surely the can cannot be kicked down the road forever. I am hoping that there is dialogue to suggest that the approval will be forthcoming and it’s just a matter of all the work streams being concluded, otherwise it would seem pointless for the South Sudan government to not grant approval after 7 months when they could have just outright blocked the deal in a matter of weeks like how chad did in December.
But as always never say never in Africa and personally I hope we wrap up a hydrocarbon deal in Nigeria where we have better credibility as operators and regulators. Plenty of assets up for grabs in Nigeria for example TotalEnergies asset in Nigeria. We need strong producing assets with strong reserves and I believe that’s what we will be looking at assets which can give multiples and quick returns in short term but exploration potential for long term gains
Great to have you back and love the summary at the end.
Assuming all that happens I can confidently say we will be a very happy set of investors.
Surely north of 89p too ;-)
Great to see you back RR!
PART 2
Chad
We what a bloody mess
Let’s just hope we win the court case currently underway. In April, i think I read somewhere that it was expected to take 12 to 18 months, so let’s hope for a positive decision in 2H next year at the latest. People at the company seem extremely confident but obviously can’t say anything. I was told that we’ve got the best lawyers on the case that you could possibly find.
But as ever, it’s OK winning a case but how do we get paid? As a very silly example, let’s say we win and get awarded $500m. Could we see the award stating that say 5k of boepd is awarded to us at the point of sale in Cameroon? I’m sure that the court in Paris would still allow Chad to claim some of their production, so let’s go 50/50 on 1ok gross. If the net back to us was $40 per barrel we would get $200k per day, $73m per annum for nearly 7 years. Guess I’m smoking something here but we must be able to get the cash somehow if we win.
Cameroon
No idea what’s going on here. Are the Govenment on side with us or stitching us up with the Chad regime? At best I’d like us to sell the 10% of Cotco as planned for $44.9k and retain 31% + dividend payments.
Re the 75MW renewable project, I guess it’s all down to the outcome of the above.
Before this Cotco issue raised its head with Chad trying to control >50% and all the crap that comes with it, I was convinced we would be acquiring hydrocarbons in Cameroon later this year. No I have no idea at all.
South Sudan
I’d love to see this in Q3, mentioned at the AGM a bit after the formalities. But I’d love it to close in July even more. I think it will all come down to if and when we get Government sign-off and like others I have no idea where we are at with that.
If closed I’d like to see a balance payment of no more than $600m which would give us total net debt of around $1bn. No Idea what the 2P would be but I’ve heard 50kboepd on day one a few times now.
Within 18 months, I’d hope to see this rise by at least 5k - 10k pd with some remedial work to some wells and the drilling of others. But at the end of the day we will be in the hands of the operator.
New Hydrocarbon deals
SAVE seem very confident of at least 1 and maybe more. I guess a lot depends on SS closing as we surely but surely don’t want to go immediately into another RTO should it fail.
In very brief summary I’d like to see us a very much larger company in 18 months with something like-
120-150kboepd production with over 500m 2P and next debt do less than $2bn
Minimum of 2GW of renewable projects well underway
Accugas deal done on very attractive terms
Retain 31% of Cotco + dividends all agreed on an amicable basis
ICC court case in Paris awarded to us WITH a mechanism to get all the award paid to us, starting immediately and full paid within 5 to 10 years.
Anyway I’m running out of my 2nd lot of 3,000 characters and I don’t want to post another one, so I’ll leave it a
Call it my wish list or my inspirations but this is a very brief summary of what I want and hope to see in the short-term. My short-term in O&G shares is 12 to 18 months, which by coincidence now matches my investment period that i set a long time ago of December 2024. I know and understand that other peoples idea of short-term is a lot shorter than mine but we have to accept that we are doing very difficult stuff in very complex continent which is renowned for going at a slower pace than other continents and definitely a lot slower than we would like to see. My bullet point list below, I admit is at the very high end of my hopes but as the old saying goes ‘Shoot for the moon and even if you miss, you’ll land among the stars’
Niger
Successful well test in Q4
30km tie-in pipeline completed quickly and cheaply
(David Clarkson told me that this is a non-conventional bit of pipeline, that is quite cheap and very easy to lay. This is our responsibility sand we pay. I’m not sure about cost but I’m sure I’ve come across a $8m figure from somewhere)
First oil (YIP BLOODDY EE) to follow soon after test and the long awaited event of booking 35mboepd 2P. Some people seem to have heard AK say first oil and the booking of 2P in Q4 this year but I did not hear that, but as I say I struggled with sound quality and accent again.
Looking for strong progress on the 200MW and 250MW renewable projects here as well.
Bit disappointed we seem quite a way off a new drilling program or maybe bringing in a partner but I’m sure the BOD know a lot better than I. I must admit though, I’ve heard AK talking about bringing in a partner for 8 years now.
Nigeria
Love how this is going and it looks like we will be taking on a lot of stranded 3rd party gas as oppose to more drilling at UQUO.
Need to see more and more customers and fill up more of the capacity on the Accugas network. I’m not sure but I think we may only be running at around 33% capacity. And with 75% to 80% gross margin, let’s go and pick a load of low hanging fruit and fast.
For Niger and Nigeria, I personally would be looking for more development and hydrocarbon acquisitions in these 2 countries. We are proven on what we can do and we must surely have better relationships that places like Chad.
I would not be surprised to see another renewable deal signed in Nigeria.
Obviously looking forward to the Accugas debt resign and term extension to match our long-term gas contracts. I think we have $4bn or so committed revenues on the 15 to 16 years left on the current contracts
Renewables
Great we are up to 525MW at the moment of WIP deals, 2 in Niger and 1 in Cameroon. Am looking forward to another 475MW minimum of deals being signed to get us to Andrews 1GW KPI number by the end of this year.
With over 240GW to play for, the figure I’ve read that will be up and running in Africa by 2030, I think we may see more than SAVE’s 2GW target by end of 2024.
NtM- thank you and good to see you again
Z - TY and fantastic posting again along with Komakino
TiL - love your notes and enthusiasm and keeping the board busy, thank you
CYB - I struggled a bit with the sound in the AGM room to be fair and from what I gather having spoken to a couple of other, I think the sound quality for people dialling in on the comms bridge was better. If I heard correctly re the Naira peg, i think Andrew sounded very comfortable on all fronts. I think he said we’d spent a lot of the cash we were holding, that future payments to us for gas would now be healthier and I think he said that it will only strengthens the re-sign and term extension of Accugas debt.
I wont bore you all with posing as much as before, or I’ll try not to but I will put one more on next re my short-term ‘scorecard’ of how I’ll measure Savannah moving forward.
Sorry if I’ve missed any of the great posters on here but I’m sure you know who you are.
I'd have gone with 'A g'dem Rocky Ride' for the new alias.. and I'll call you that going forward, for sport :-)
Welcome Back !
Well next time you invest in a share I suggest you do a bit of research first, as the CEO had made it as clear as day they were looking for large acquisitions which would likely result in a RTO and a suspension. The last acquisition by Savannah itself resulted in a suspension of almost 7 months also, so there was plenty of information there telling you the likelihood of this if you had bothered to do some reading.
What if you needed you money 7 months and counting suspended
Splendid to see you back, Agadem, or RR!
Thanks for your input on the AGM which I couldn't physically attend and where the dial-in was received late and then failed. I know Sally did her best to rectify matters as soon as she,was made aware.
I understand that AK was broadly positive, albeit briefly, on the NGN devaluation impact for the company. I still am trying to get into the full detail on this as it seems fundamentally important to the existing business (even if it is far less "exciting" than the CC soap opera and SS mini-series). I know im a stuck record on this, but it's *really* important. It may, of course, be included in the new listing particulars. If we relist without SS perhaps there are no new listing particulars. So many questions. Once relisted, we really need a new slide pack and a video q&a (silence on CC is understandable). It's overdue and, from what I've gathered, the AGM didn't do the company full justice.
Beginning to fear the worst for you Agadem, so warm welcome back and glad to see you here.
Thanks for sharing your thoughts.
Looks like I need to make more requests regarding our share price here! It worked! Welcome back A; or Rocky?
Requests: SS deal completion; more big meaningful profitable acquisitions, share price relist +40p… just up and up for us Savers!
Not a bad Friday after all reunited with a long lost virtual friend.
Welcome back and hope your in good health.
Great to have you back!! Thank you for your thoughts and insights, I know a lot of us find them of great value :)
Well hello again and first a quick thank you to cyb, Tier and a few others on this board for your kind words. Also than you to the other people on here who keep in tough via email and texts, I think we make a very strong team and share some excellent knowledge. Our individual skills are diverse and between us we make a very strong team.
My previous name on here was chosen when we initially owned just 2 PSC’s in Niger, which was basically a whole load of sand in the middle of the Sahara desert. Similar to then my new name has been chosen which describes our journey since then and I think it’s safe to say my new name will be closely aligned to our future path for some time to come.
Yes I was at the AGM along with Porchefund, about 20 or so other PI’s and representatives from Camarco, Shore Cap and Strand Henson. Immediately after the AGM I had quite a long conversation with David Clarkson one of our NED’s. David is a delightful chap and has an excellent network of people from all over the industry and this is proving invaluable to the company. Nowadays David is not as heavily involved inside the business as he used to be and is not so close to the intricate detail on a daily basis. He did state 41p but when i tested this, I think he was confused with a recent note which quoted a similar figure but not with SS in it.
Everybody at Savannah is extremely excited about the current position of the company and have the utmost trust in Andrew and the team. Clearly, not a word was going to be mentioned about Chad / TOTCo and the Paris court case and Cameroon COTCo was not discussed either to my recollection. I did touch on South Sudan with David and there is an inordinate amount of work going on to close the outstanding work streams. Savannah and Petronas are working extremely closely together to get the deal over the line. But as always with these deals, it will all come down to Governmental sign off. I think Savannah are confident of this but who knows what will happen, especially with unpredictable African Goverments.
Anyway, that’s enough from me for my first note back on here. I may pop on again before I go on holiday a week tomorrow for 10 days and them hopefully come back to a very long awaited RNS on my first Friday back, the infamous 28th July.
You’ll be glad there is no predictions from me this time, at the moment, but let’s just hope that we come back at a decent premium to the suspended price. Nice weekend to all and good luck with our inevitable RockyRide.
(PS typed in the sun with ipad overheating and closing down a few times so no proof read done)
Just out of interest on the 41p overheard s/p, 41p was reached back in June 2022 when the Chad deals were due for completion and thereafter started to fall possibly on some having knowledge that the deals were struggling. I would expect the cash flow to be greater than the Chad deals. On the other hand if there is some dilution I could live with it as any debt will be lower and we know a further hydrocarbon acquisition is expected to follow by year end.
Porche- Happy to confirm that I consider you a quality knowledgeable poster of long standing and as such there is no doubt on my mind that your account is true.