The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Improved another 60 base points today to 1,420 from 1,480 yesterday and down from 1,624 earlier this week. Do I hear the pitta patta of baby footsteps?
"What price for size, shag?" 🧐
TiL - morning Sir
I wonder if Exxon would give us a 10% discount if we take the lot?
Https://uk.movies.yahoo.com/movies/exclusive-exxon-steps-assets-sales-145150073.html
Yes, Afrenta building a nice position there.
Noix - Angola is one of the regions that the majors are still keen to retain and invest in as they have large reserves, but sure they may be looking to get rid of smaller fields a bit like afentra deals
I find it strange given the proximity to where we are already doing business and their apparent willingness to engage, that we are not talking to Angola (perhaps we are of course.) Reserves are very high and Exxon and Eni are in country, though I don't know if they are divesting assets.
One thing I find fascinating about Savannah compared to other small cap players is that AK has built a strong network in the industry and also some of the executive team are also ex investment bankers in there past life at major banks, in addition to this we have access to capital unlike other players.
This makes us a prime candidate for deals and we would definitely be on all majors list for divestment of assets, in some cases it wouldn't surprise me if majors came to us asking to buy there assets rather than us going to them such is our position of strength in negotiating deals. We have made inroads with 3 majors already since we have started to deal make Exxon, Petronas and Eni who we wanted to purchase tunisia assets on in the past, i am sure we there are many more which we would have consulted.
This gives me great confidence that we will always be offered deals, the question than becomes whether the deal is right for us from an asset performance and financial metric and how the host governments are receptive of us, both can be overcome with some hard work and going for the right countries.
My immediate thought before I have breakfast, is no best case production for South Sudan.
1.3bn shares
$440m net debt
30mboepd production in Nigeria
88mboe 2P Nigeria
1.5mboepd production in Niger
33m 2P Niger
$500m on the way from ICC awards (one off dividend or large buy-back)
0boepd production in South Sudan (worst case)
300m 2P South Sudan
Balance payment for SS deal from future production
Debt re-financed in Nigeria
No raise of equity
CPF completed
Renewables back in focus
1 or 2 more M&A for oil production + 2P
Lots of possibilities eh and good food for thought!
The Niger section is copied below and we were told we’d see a further update on Niger in Q4 2023. We did not see an update in Q4 and after the relaxing of boarders etc, we surely are due one soon. Also CAPEX was reduced by $30m, so let’s hope to see that CAPEX put back in. I think the majority of the $30m was for the tie-in pipeline to the newly commissioned export pipeline.
Niger Update
Savannah remains committed to the 35 MMstb (Gross 2C Resources) R3 East oil development in South East Niger. As previously announced, the intention was to carry out a well test programme on our principal discoveries in Q4 2023. However, following recent political events, this timeline will be subject to further revision due to restrictions imposed by the Economic Community of West African States on Niger, which has resulted in the closure of the border between Benin and Niger. This has created logistical challenges for companies operating in Niger and, specifically for Savannah, in relation to the importation of the necessary equipment to complete our planned well test programme. A further update in relation to timing will be provided in Q4 2023.
Https://www.youtube.com/watch?v=htgr3pvBr-I
AK please don’t hang up on the SS officials. Best of luck from all Savers. Goodnight everyone.
Yes they’re reporting news that was posted here a month ago.
Courtesy of E43 on other site.
https://oilprice.com/Latest-Energy-News/World-News/Sudan-Oil-Exports-under-Force-Majeure-As-Pipeline-Ruptures-in-War-Zone.html
What’s our expected revenue after this new deal? Doubling? 50% more?
NicetoMichu - One would imagine that AK plan is to come back being an enlarged entity so it stops future suspensions and they can carry on deal making whilst trading. Now whether that comes in the form of SS or another remains to be seen. It would seem illogical to come to market and than ask for another suspension if the acquisition is large they would be better of continuing the current one.
Nice news yesterday.. but if SS is still progressive and still only semi close to completion stage, then I'm absolutely all for another extension of our suspension.
AK very much needs to come out of suspension with a blatantly big win under his belt imho.. if not SS then a n other ..
(yesterdays news is small/medium win in my mind, for context)
Zen
Re your thoughts on Niger and the Govt wanting to do the other blocks themselves, do you think this may now open the door for Sinopec to join us on Agadem, it may offer us some security to be aligned with a none western partner ?
Looks like Bracewell continue to be our Deal advisors for acquisitions, let's hope they have a few more juicy ones lined up for us.........
https://bracewell.com/news/bracewell-advises-savannah-energy-on-acquisition-of-49-percent-participating-interest-in-stubb-creek-field
Z -TY and great summary as ever. Surely at some point we will see some of this being reflected in the SP. I’d dearly like to see the 33m 2C move to 2P TY as a bare minimum additional bit of business to todays news along with at least 1.5k production. Then CPF and debt deals completing would give us some decent trajectory.
Although it would make sense to extend the suspension again if there’s a fighting chance of completion, I’m getting bored now and just want to see SAVE listed again.
CPR Figures
All the discovered fields both in Nigeria and Niger offer significant 3C upside (Recovery factor, pressure communication etc ..) as well as substantial exploration potential.
Uquo/Stubb Creek 2P/2C Net = 164 mmboe.
Niger 4 fields 2C Net = 33 mmboe.
Uquo/Stubb Creek additional potential 3C Net = 17.5 mmboe.
Niger 4 existing fields additional potential 3C Net = 75.8 mmbo.
Total 2P/2C Net = 197 mmboe.
Potential Net 3C = 93 mmboe .
Further recoverable exploration potential of Net 93 - 185 mmboe. (on Uquo/Stubb Creek licences mid-high case Net 69 - 114 mmboe + deeper potential in the 4 Niger fields mid-high case Net 24.3 - 71.3 mmboe.)
3 Tweets out today and worth a quick look as there are 3 decent photos on there. ‘Here is one of the Tweets:-
The SIPEC acquisition will increase Savannah’s Reserve and Resource base by approximately 46 MMboe following completion, with 2P Reserves to increase by 13% to 73.3 MMboe and 2C Resources by 41% to 130.2 MMboe.
Stubb Creek gross production is expected to increase by approximately 2.7 Kbopd to 4.7 Kbopd, following the implementation of a planned de-bottlenecking programme within 12 months of completion of the SIPEC acquisition.
The SIPEC Acquisition will also secure significant additional feedstock gas available for sale to Savannah’s 80% owned Nigerian gas processing and distribution subsidiary, Accugas Limited, which currently has eight principal gas customers. With a weighted average contract life of 14 years, Savannah’s natural gas supplies are a critical enabler of the Nigerian economy and currently support approximately 20% of Nigeria’s thermal power generation.
Maybe the giant is stirring. We now have new numbers for 2P and 2C which can be added to this year from Niger and or South Sudan. We could have quite large increases to the reserve numbers in a few months time.
Here’s hoping anyway…
I’d like to see a few more deals of this size, especially like this one as the financials look extremely attractive. Let’s hope its all signed sealed and delivered in short order now and no later than September.
Malcys note FWIW:-
This acquisition is very smart indeed, getting 100% of the rest of Sinopec Nigeria comes with a number of bonuses. Savannah buys a 75% interest in SIPEC from Sinopec and 25% from Jagal for a 49% interest in the Stubb Creek field which makes a good fit with the other 51% owned by UER, a Savannah affiliate and operator.
They will pay $52m and $7.5m respectively and the transaction should complete on the 1st September. As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. Also SIPEC oil production is estimated at an average for 2024 of 1.4 Kbopd. Savannah’s Reserve and Resource base will increase by approximately 46 MMboe following completion of the SIPEC Acquisition.
There’s more, it is anticipated that, within 12 months following completion of the SIPEC Acquisition, Stubb Creek gross production should increase by approximately 2.7 Kbopd to approximately 4.7 Kbopd through implementation of a de-bottlenecking programme.
Another added financial advantage comes through the significant additional feedstock gas available for sale to Accugas, 80% owned by Savannah and who sell to eight principal gas customers across Nigeria where they have a weighted average contract life of 14 years. Savannah supply some 20% of Nigeria’s thermal power generation.
My conclusion is that for $61.5m the deal adds material 2P reserves and 2P resources made more valuable by their application by providing feedstock and offsetting declines at Uquo. The deal is accretive and at C. $7.50/ bbl very cheap given the current price deck.
Got a hockey buddy last known to be living in Nordhoek, who we visited whilst there. Not far from Camps Bay.
Late 90s? Was in Cape Town (Camps Bay) for 2 years growing up. Then Asia for a few years international school then back in the uk for ‘middle schooling’ year 9. Would love to visit SA again but as you say not sure if it’s safe to do so. I think it’s ok joining tour but don’t fancy that. Beautiful country. Stellenbosch, Franschhoek, Constantia….. maybe we should all go together.