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I still don’t have a link. Does anyone have it?
Savannah is holding their 2023 AGM Webinar at 11:00 a.m. on Friday 30 June, If you are a shareholder and you wish to register to attend in person, attend via webinar or would like to submit a question, please complete the form below. The closing date for registration and questions is on Thursday, 29 June at 11:00 a.m. Personalised links for the webinar will be delivered by email on Friday, 30 June shortly before the scheduled start time
What time tomorrow? Any email reply yet?
26/6/23 Africa Intelligence
'Nigerian businessman Tony Elumelu is investing left and right in the power sector and is now looking into renewables.
Newly-elected President Bola Tinubu's reforms could make the sector even more profitable.
The billionaire chairman of Nigerian behemoth Transcorp, is expected to announce the creation of a subsidiary for sustainable energy this year. Elumelu already works in the hotel and oil industries and is investing more and more in power distribution in Nigeria. He is now counting on reforms that the new president, Bola Ahmed Tinubu will make.
On 10 June, a law allowing each state to manage its own electricity was passed, consequently permitting power providers and distributors to drive up prices. Tony Elumelu was one of the first to welcome the president to his home on 9 March after the election.
In May, ex-VP Yemi Osinbajo (replaced by Kashim Shettima on 29 May) inaugurated a new gas power plant, Afam, in Rivers State, run by Transcorp Power. As Transcorp already owns Ughelli Power Plant (Delta), this brings the group's production capacity up to 1900 MW, or 17% of the country's total installed production capacity.
At the Afam inauguration, Osinbajo announced that the National Council on Privatization, of which he was then chairman, had just selected Transcorp to acquire 60% of Abuja Electricity Distribution Co (AEDC) for $122m'
In the recent annual report for 2022 and in the section dedicated to Nigeria this contains the reference to investing in our people and infrastructure to potentially quadruple the scale of our business - before then moving on to Niger, Chad-Cameroon and then the other segments ie.Sudan. I wonder how far SAVE can scale up Accugas given one of our customers investing materially in the power sector.
From SAVE-
GSA announced with Trans Afam Power Limited on 6 June 2022 to supply up to 35 MMscfpd of gas;
22 April 2022 for the GSA with First Independent Power Limited, increasing the quantity of gas supplied from up to 35 MMscfpd to up to 65 MMscfpd and extending supply to cover three of its power plants, FIPL Afam, Eleme and Trans Amadi;
Also on 31/5/23 they announced buying and transporting up to 20 mmcf/d 3rd party gas which has only come into play sometime around May and will show up in the next H1 accounts and described as a template for significant other opportunities.
-----------------------------------
9/3/23 - 'Tony O. Elumelu’s Remarks at the 240 MW Capacity Afam 3 Fast Power Plant Commissioning'
'Transcorp executed the largest capacity recovery in a privatized power plant in Nigeria, by increasing generated electricity of Transcorp Power Plant in Ughelli from 160MW to 680MW, within a period of 4 years. We transformed Transcorp Hilton Abuja, the flagship hospitality asset of our country, to become the ultimate hospitality destination in Africa. Transcorp Hotels Plc was also discharged from post-privatisation monitoring by the Federal Government in 2019. These successes confirm our business philosophy of building to last, whilst creating significant value for all stakeholders.
I call on the Federal Government to resolve the gas and evacuation challenges that exist in the region, so that the capacity we are recovering in the plants, can be optimized for the good of Nigeria.
I want to use this opportunity to urge the in-coming Federal Government to improve gas supply to our industry and our Afam Plants, ensure the completion of the 330Kv double circuit Afam-Ikot-Ekpene transmission lines, which will increase the capacity of the Afam evacuation corridor.
My vision is of a Nigeria, where time and time again, we can repeat the success we see today at Afam.'
https://www.heirsholdings.com/tony-o-elumelus-remarks-at-the-240-mw-capacity-afam-3-fast-power-plant-commissioning
10/5/23 Elumelu’s Power Companies To Generate 2000MW As VP Osinbajo Inaugurates Transcorp Afam 3 Fast 240MW Power Station.
With an already existing power plant in Afam, this brings the cumulative generating capacity of the plant to 1,000MW.
Tony Elumelu's Transnational Corporation Plc (Transcorp Group) is a publicly quoted conglomerate, Our businesses include Transcorp Hilton Abuja, Transcorp Hotels Calabar, Transcorp Power, Transafam Power, and Transcorp Energy. '
https://persecondnews.com/2023/05/10/elumelus-power-companies-to-generate-2000mw-
Eni reported by AI had agreed to sell its Tunisian assets to Save late last year but was suspended by ENI due to government disarray.
In yesterdays FT - ENI just bought private equity backed Neptune Energy "in the largest cash deal in Europe for almost a decade" (which will not now ipo) for $4.9b.
Net debt assumed at $1.7b. German assets not part of the deal. Part of the reasoning for the deal is cited as also "accretive to its own carbon metrics."
Deal expected to close by the end of March 2024.
From Neptune
Produced 135,000 boepd in 2022 .
552 mmboe 2P. 24/% oil. 76% gas (75% in Europe + 25% Asia/Africa)
468 mmboe 2C. 32% oil. 68% gas (65% Europe + 35% Asia/Africa).
11 years reserve life.
Net debt reduced from $2.1b in 2021 to $1.7b in 2022.
https://www.neptuneenergy.com/sites/neptuneenergy-corp/files/investor/reports-and-presentation/2023/FY%20results%202022/2022%20Neptune%20at%20a%20glance.pdf
Q1 20-23 results production 142,000 boepd.
Revenue $1.425b .
Net Debt $1.546b.
I think their average price was about $110/boe but the european taxes (windfall) much, much higher in that higher price environment.
"Free cash flow in the first quarter of 2023 was $188.5 million"
"Our tax charge in the first quarter was $851.7 million, representing an effective tax rate of 80.5%."
https://www.neptuneenergy.com/sites/neptuneenergy-corp/files/investor/reports-and-presentation/2023/Q1%202023/Neptune%20Energy_Q1%202023_Results%20Statement_Final.pdf
Food for thought given the Kosmos valuation which has now fallen back to $2.7b + $2.1b net debt. Has 550 mmboe 2P and 63,000 boepd production. Valuation has fallen back with lower oil price and delay to Tortue gas start-up which was to help drive them on to a net 90k boepd by year end.
Noting the Neptune metrics above, taking into account the high taxes etc, how does a valuation for Savannah compare reaching say $500m FCF or 2/3rds of Neptunes fully year FCF of $754m - or 2/3rds 2P+2C giving approx 370 mmboe 2P + 300mmboe 2C. It's possible the next acquisitions will reach that in terms of FCF and 2P/2C from where we are now.
South Sudan which at the moment appears to be 50,000 bopd+ and likely $800m at most - down from the up to headline $1.25b, 'at least' 1 other hydrocarbon acquisition by year end (indicating more to follow), Niger start-up fast approaching - if there is no dilution then a 100p target represents a $1.7b fully diluted valuation allowing a similar $1.5-$2.1b net debt range which at the moment is currently around $400m before South Sudan.
Https://www.savannah-energy.com/investors/gm/register/
The form above has been added to the website.
The AGM will now also be a Webinar for virtual attendance and pre-registered questions.
Hopefully personal attendees will also be able to also ask any questions not selected.
Sent from my iPad
Savannah Energy sponsors of UK in Tunisia event ?
https://twitter.com/ukintunisia/status/1672700666576355328?s=46&t=bdVeLrGB139mDog1SFRNlw
Strange timing of tweet after a whole week. Are we expecting some news tomorrow……….
https://twitter.com/savannah_energy/status/1671905198007017475?s=46&t=bdVeLrGB139mDog1SFRNlw
Anyone attending the agm? 911 Porsche and one or two from the other board? Doesn’t matter how many I’m sure all relevant questions will be raised. Thanks for voicing for us. Too many unanswered questions.
Personally not expecting any transformational news between now and the AGM next Friday so expect it to be quiet as I can't imagine them wanting to rns significant news ahead of AGM. Let's see what July brings...............
I think the true-up may only apply to the difference between the rate applied by the Central Bank and the Nigerian Autonomous Foreign Exchange (NAFEX) rate. I'm not sure it will apply to a 50% devaluation which is what we just had (USDNGN460 to USDNGN690). Whether these clauses still apply now the fx rate floats, I don't know.
Rather than have twenty questions at the AGM on this topic, it is probably best to have Nick Beattie simply talk comprehensively through the whole thing for five minutes or so. I don't believe any of us are clear on this issue, but I've probably set a number of you thinking on it, which was part of the goal so we can get to the bottom of it.
Best wishes, all.
Yes, presume so LST.
Ahh so that would be booked before old loan settlement i assume KOM ?
Do we have difficulty in getting the money of the country?
CYB, don't forget about the exchange rate true up.
'These losses are in part recoverable through a foreign exchange “true-up” clause in the Calabar NIPP gas sales agreement (“GSA”) whereby realised foreign exchange losses on this contract can subsequently be invoiced back to Calabar and recovered and recognised as a reduction in foreign exchange losses. '
An initial cost we will have is settling the original debt which is in USD with money we have from the new naira, 30% of £300m+ is nearly £100m ? although the freeing of of Capital flows can only be a good thing medium long term.
The whole point of the nigeria de peg was it wants to attract a lot of foreign capital, and places in good stead now if we go on to acquire a few more nigerian assets.
I see what you mean; good point!
Unless as far as I am aware that savannah has fixed dollar pricing for it's gas so it may mean that the purchasers of our gas are paying us dollar equivalent without and if our operational costs is naira than we could definitely see the de peg as a positive. Long term the de peg is a good thing as it makes financing more market driven and competitive
TIL, I believe that revenues are contracted in USD, but customers pay in NGN at the prevailing spot rate when due. We then are lumbered with Naira.
I would welcome others' interpretations of this material and complex aspect of the financials.
Also if we are after another acquisition in Nigeria depending on how we finance that acquisition it could make it cheaper to finance debt
Every day, there's a new issue with this pos.
In Savannah's case, considering that a significant portion of their revenues come from Nigerian operations, a devaluation could impact the value of those revenues when converted back to US dollars. However, if the company also has significant costs in Naira, these could potentially decrease in US dollar terms, partially offsetting the impact on revenues.