Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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Considering that Savannah hasn't released a market update in relation to the news in the media that 10% Sale to SNH has been frozen makes me think that they will announce some news and perhaps tie in update on 10% sale to cotco with that. In the past few weeks savannah has done pretty well in addressing media news in relation to chad cameroon quite quickly via an RNS so perhaps they want might want to land some positive news before they update on the chad cameroon front........
Olderandwiser - Don't think that would lead to 20p..........I just think we all need to tame expectations that formal government approval on the south sudan deal may not come as quickly as we are expecting and may not certainly come at the conference could come months after we re-list, who knows i am keeping my mind open all possibility.
They were my thoughts as well.
In that case, 20p here we come.
What would be ironic is for months everyone of this board has thought that the South Sudan Oil conference currently taking place will be a key milestone as a lot are expecting savannah approval on the deal to be announce in or around the conference. So I have tamed my expectations that perhaps we may not get approval at the conference as everyone was expecting and that approval may come much later perhaps even after Savannah have re-list.
This should actually be very good for us should it not as our contracts are priced in dollars and this should help with the previous forex losses and means we can take cash out of the country easier.
From the Calabar contract (Ibom and Unicem the same) which are priced in dollars.
From the listing doc 9:16 - All payments under the agreement are to be made: (a) in the Naira currency using the applicable sell rate for the conversion of US$ to Naira published by the Central Bank of Nigeria on the business day immediately prior to the date of payment"
We were pegged to the central bank rate of about 477 to the dollar yesterday - in reality we get paid more naira instead of being locked to the fixed central bank rate against the previous unofficial rate when it came to us getting dollars and making payments in dollars to suppliers etc/finance/interest
14 Jun 2023
Nigeria’s central bank allowed the naira currency to drop as much as 36 percent on the official market on Wednesday, days after President Bola Tinubu suspended the central bank governor who oversaw much-criticised multiple exchange rates.
For decades, multiple exchange rates had led to foreign currency shortages. Under suspended apex bank chief Godwin Emefiele, the situation worsened, making it difficult for investors to take out money from Africa’s biggest economy.
Traders told the Reuters news agency the central bank had removed trading restrictions on the official market, which drove the naira to a record low of 750 to the dollar on the official market, down from Tuesday’s low of 477 naira to the dollar.
The new rate is equivalent to the black market rate which has stood at approximately 750 to the dollar since last year.
This was the first time since 2016 that the naira had recorded a big fall on the official market before the central bank introduced a managed exchange rate in 2017.
Charlie Robertson, head of macro strategy at FIM Partners, said, “A much-needed devaluation which takes the currency from 50 percent overvalued to about 5-10 percent [cheaper]. This should improve the current account and improve the long-term investment climate.”
The central bank did not immediately comment.
Tinubu inherited anaemic economic growth, record debt and shrinking oil output and has promised to reset the economy. He has also said some decisions including removing a popular petrol subsidy would impose an extra burden on citizens but free up money for education, regular power supply, transport infrastructure and healthcare.
Foreign investors had flagged the forex restrictions as one of the biggest impediments to financing in Nigeria, Africa’s biggest oil producer.
Unifying the exchange rate and scrapping the subsidy were the most immediate tasks that Tinubu faced. Delivering these within the first two weeks of his presidency has been well received by investors and economists.
https://www.aljazeera.com/news/2023/6/14/nigeria-allows-naira-to-drop-more-than-36-on-official-market
We earn is usd and have costs in naira right?
Interesting development
https://www.ft.com/content/2f93e1a0-3057-4daa-84a2-b7a15b8d9322
Https://www.msn.com/en-us/news/world/south-sudan-s-sluggish-peace-deal-and-unsteady-road-to-elections/ar-AA1ctpuL
Doesn't read great to me
I would be less uneasy if the language was along the lines of suspended pending a review, rather than freeze. Maybe that is simply a cultural / language issue. Hopefully SAVE will add clarity. Either way, I can’t see the IIs sitting comfortably on their serious holdings given the mounting complications in Chad and now Cameroon. While I believe the SS deal will conclude favorably, primarily due to the importance of the Oil Conference to SS, I’m less confident about the long term future of this arrangement. SS sits at No 116 out of 118 countries on the World Corruption Index. Chad 105. There are longer term risks with SS.
I like the fact that SAVE see part of their investment strategy as enabling some of Africa’s poorest countries, but the balance of risk v the corruption index feels misplaced. The board needs to review this strategy. On a more positive note, it has got to the stage where I’m beginning to feel relieved by our investment in Nigeria!
See Perenco mentioned again ?
I wonder how much Exxon were pushing us to conclude this deal just so they could F--k off and not have to deal with these mobsters any longer?
The Boards priority and focus on the next 8 weeks should be a successful acquisition of Petronas South Sudan assets including all government and regulatory approvals, alongside the additional hydrocarbon deal that they have alluded too. That should be the immediate focus. The chad situation will continue to linger even if we are to fast forward 12 months into this time next year the position will likely be the same until the ICC put down a ruling
Whatever happens this will only be solved at the ICC tribunal until than all the news positive or negative on the doba acquisition just has to be ignored for time being............
Thanks K
In a press release, the Board of Directors of the National Hydrocarbons Company (SNH) of Cameroon decided to freeze the transaction concluded on April 19, 2023 between SNH and the Savannah Energy Company.
The Board of Directors of the National Hydrocarbons Company (SNH), met for its first session of the year, on June 13, 2023, under the chairmanship of Ferdinand Ngoh Ngoh, Minister of State, Secretary General of the Presidency of the Republic. During this session, the activities carried out by SNH between January and April were presented to the Board by the Managing Director, Mr. Adolphe Moudiki.
This session shows the presentation of two Production Sharing Contracts, signed on March 31, between the Republic of Cameroon, SNH and Addax Petroleum Cameroon Company and Perenco Rio del Rey. This session materializes the alignment with the Petroleum Code, Establishment Agreements and Association Contracts covering the Rio del Rey and Mokoko Abana producing areas.
“National crude oil production stood at 8.01 million barrels as of April 30, down 2.23% from the same period a year earlier. Natural gas production was 916.01 million m3, up 4.53%. Sales of oil and gas made by SNH for the State made it possible to transfer to the Public Treasury, after deduction of charges, 269.221 billion CFA francs. This amount is up by 31.19% compared to the same period of the previous year. In addition, SNH paid the State 16.259 billion CFA francs in taxes and duties”.
This led SNH's Board of Directors to welcome these good results and approve SNH's accounts for the 2022 financial year. However, “the Board finally decided to freeze the transaction concluded on April 19, 2023 between SNH and the Savannah Energy Company”, concludes the press release.
The transaction between SNH and Savannah Energy has raised tension between Cameroon and Chad, which has not recognized the sale of Esso's assets in the oil consortium to Savannah Energy.
https://tchadinfos-com.translate.goog/cameroun-le-conseil-dadministration-de-la-societe-nationale-des-hydrocarbures-gele-sa-transaction-avec-savannah-energy/?_x_tr_sl=fr&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp
Been on Reuters and can't see anything relating to this story, last piece for Cameroon was the death yesterday of the old politician and re Savannah a piece from May 2023, can anyone post the actual Reuters link as opposed to LSE ?
Cyb, assuming this is true then I think that's a reasonable assumption. Though, that would most likely result in another trip to Paris and the arbitration court. What is happening to the monies from the oil liftings etc is anyone's guess and would be nice to know what the position is, but doubt we'll get anything from SAVE with regrd to that until we see the half year results. Bit of a mess all told. Hopefully we get good news on the SS acquisition else we'll probably all be hiding behind the sofa when we relist!
Well that does read like Cameroon have our backs does it ? probably won't get an RNS until later this morning as it has probably taken the BOD by surprise.
I wonder if Cameroon and Chad have made some agreement to kick Savannah out of COTCo. If so, is that also the end of our Cameroonian (ad)ventures?
I'm speculating, of course.
Sigh.
More twists and turns:
Cameroon freezes purchase agreement between national oil company and Savannah Energy PLC - government statement
Tue, 13th Jun 2023 21:26
Thomson Reuters
DAKAR, June 13 (Reuters) - Cameroon's government has frozen a purchase agreement between its national oil company and Savannah Energy PLC, it said in a statement on Tuesday.
Savannah signed a shared purchase agreement with Cameroon's national oil company, SNH, on April 19.
The statement did not provide a reason for the government's decision to freeze the sale.
https://www.lse.co.uk/news/cameroon-freezes-purchase-agreement-between-national-oil-company-and-savannah-energy-plc-government-statement-zewcvjiwx5i8c84.html
Chad recalled its ambassador to neighbouring Cameroon days after the agreement, the latest escalation of a dispute over the sale by Exxon Mobil of its oil assets in both countries to Savannah Energy. (Reporting by Joel Honore Kouame; Writing by Sofia Christensen; Editing by Jonathan Oatis)
Excellent points, Streets. Thank you.
I'm really hoping SS is a Petronas PXF too.
Totally agree re AGM questions; there's so much to cover, we all need to focus on key issues. I think we particularly need more detail on the liability side of the balance sheet.
CYB - all good points, thank you.
Totally agree - underlying Nigerian business financials look solid. So an underlying business that is materially improving, with increased diversity of end buyers, and looks highly bankable for this key strategic segment within Nigeria.
To your main concern you surfaced: I think (hope) local banks eg Nigerian FIs will take a view of ring-fenced domestic assets in their lending and would hope they look through the lack of a clean auditors opinion and ‘get’ the broader context of the breach / misappropriation in other countries.
Confirmation of this pretty key question that emerged from the qualified auditors numbers and impact on the Nigerian refi is a question that remains unanswered in the FY22 glossy - for understandable reasons given events were in FY23 - however, I would hope this is addressed at the AGM if not before.
I’m personally keen to understand the numbers around the Exxon PXF - not just because of the obvious reasons shareholders would have for having transparency on this (vis a vis debt position (local and group) as well as whether partially or fully unencumbered now so shareholders can understand bottom line impact to the company of a positive / expected ICC Award in save’s favour (should settlement occur); but also as it’s presumably the template for SS.
I am trusting this will be made clear at AGM - if not it will be asked.
BTW I really hope people focus on key questions like this in the AGM rather than less key / material questions, as time Will be short.
Personally, questions around relatively small dividends for a growth company such as this are simply not interesting, & repeated questions on this topic at the AGM could waste precious time.
I’m keen to understand lessons learned from CC / applied to SS and the key high level principles to apply for what we are all guessing is a large Petronas PXF - key to know what SAVE SS is on hook for, what the proforma repayment schedule looks like, particularly should there be any disruption of the exports or in case of misappropriation.
Both questions on the Nigerian refi and the 2 PXFs are key as the company’s debt load and increasing costs with current interest rates having materially increased.
Would be good to understand how much cash is surplus to the debt servicing and free to invest now in preparing to ‘release’ & monetize Niger barrels in 2024, which will take investment in capex NOW - eg 30km of pipes, etc etc.
Don’t wish to sound repetitive but the warring factions keep trying. They certainly are trying but hopefully one day they can agree to disagree first and foremost for the people of Sudan and secondly for us long suffering shareholders 👍