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Zengas - One thing I would like to add is if they are unable to secure another acquisition, and are unable to re-finance the accugas debt. Than my personal choice would be any cash which is considered spare and by spare I mean cash not needed for Accugas and Niger work programmes should be used to pay down the accugas debt as aggressively as possible or share buybacks. Personally not a huge fan of dividends at our current valuation and feel that paying down the accugas debt above the usual payments or share buybacks will be more pleasing to shareholders in terms of growth.
Just to add, it might be too much to expect all good fortune to line up, but with those 3 country assets performing at that indicated level, a positive meaningful compensation award in the next 12 months or so could potentially leave us net debt free.
No operational or financial update at the start of the year for 2024 so looking back to the half year end June 2023 we produced an average 138.5 mmcf/d
Total 6 month revenues were $138.7m invoiced including oil so pro-rata could be about $270-$275m although it was guided as being greater than $235m for all 2023. Also they said the 20/4/23 $44.9m from Cameroon for a 10% pipeline sale was received.
If there is another hit from the exch-rate, it should be tempered by the capex being reduced by $30m ($60m down to $30m).
Net debt at 30/6/23 was $443m (Where are we almost 12 months on?)
Since then - we're paying around $60m for SIPEC with $52m of that to be adjusted down to an effective date of 1/1/23.
8.7 mmbo 2P and 227 Bcf gas ( 46 mmboe total).
Sipec is producing 1400 bopd which at $80/b is about $41m year so we could have $15m knocked off our settlement price in 3 months time.
So perhaps net debt on this new acquisition = $45m by end of August.
If our existing oil/gas revenue is about $270m, this new acquisition at the current production level would take it to about $310m.
Within 12 months of deal completion the combined Stubb Creek oil output is due to rise by another 2,000 bopd which would give us an additional $60m/yr revenue at an $80/b oil price.
So without any additional gas sales revenue, we could be around $370m revenue from Nigeria alone with the additional oil sales and our access to dollars for a dividend.
I'd really be looking to that deal being approved asap which i think would help our overall refinancing of Accugas debt. If nothing else that new income stream would radically improve our net debt position and steer us to a future dividend with no other asset contribution.
Niger 33 mmbo 2C to 2P reserves on sanction.
Attaining 1,000 - 5,000 bopd has to add $29m - $146m revenue at $80/b
Above is a pathway to $500m revenue at little additional cost and reducing the net debt that we have.
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South Sudan
After almost 1.5 years the purchase price has to be greatly reduced.
50,000 bopd at $70 -$75/b oil could be $1250m - $1360m revenue/yr.
If South Sudan debt is also ringfenced, i can definitely see without doubt why this is a major asset to go after regardless of the difficulties next door and the annoyance to some shareholders (i include my self but i see the prize as well despite lack of newsflow).
If it could get back to ramping up it's last few years of oil decline, it could mean 75-100,000 bopd net here.
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Overall we're not in a bad place imho. The Sipec deal is a very good revenue bolt on so they're not sitting still. It also gives us a lot more gas. They just need to get Niger into gear and if we really want reserves growth there we need to pay for exploration or else get a drilling partner in. It could really be unlocked if S.Sudan goes through so maybe why there is little newsflow on Niger.
Zengas - Totally agree I think the company now has to deliver substantial / material news flow considering we will be suspended for over 18 months possibly even longer.
To put it into context Afentra was thereabout 25/26p in December 2022 now near 50p and Seplat our Nigerian peer was around 85p and now close to 160p. So these 2 companies are a classic example of seeing close to a 100% share price growth over the same period.
In similar context if we are to have parity growth over the same period than we deserve a minimum price growth up to 50p, and if we are to be fully diluted 1.4 billion shares that would equate to a market cap of circa £700m, how the company is able to deliver this growth will be interesting, now whether they can materially increase accugas output well beyond 200 mmscfd, start aggressive Niger exploration and production or deliver through another acquisition, but that's minimum that needs to occur
Looks like Deal approvals in Nigeria are gathering pace -
Nigeria
ENI sale of NAOC to Oando imminent
After concluding a months-long assessment, the Nigerian upstream regulator is expected to authorise the transaction in the coming days. The acquisition means the company led by President Tinubu's nephew will nearly double its oil reserves. [...]
https://www.africaintelligence.com/west-africa/2024/04/29/eni-sale-of-naoc-to-oando-imminent,110220658-art
If the ENI to Oando deal is approved than the Seplat / Exxon Deal and also the Shell / Renaissance could also be imminent. Perhaps there is never a better time than to strike another deal in Nigeria, whilst the government could be about to start an approvals spree.
The company has to do all in it's power to get another Nigerian deal over the line seems like the investment environment there is relatively more friendly albeit still drawn out.
In exactly 3 months (1/8/24) we will be entering our 11th year as a listed company.
It is pretty galling that after all this time ie 10 years, not a single barrel of oil has flowed in Niger whether for production or under test.
The entire PSC terms were used up and the only saving grace was that they were converted into one before they expired . But already 2 years is almost come and gone under those new terms.
"The Company anticipates that the R1234 PSC will become effective in Q1 2022 and will reset the Company's licence validity to up to 10 years for the exploration phase, comprising an initial term of four years, with the option to extend this term by two further terms of two years each. In addition, one of these three terms can be extended by the Company for a further two years. " (Since stated in the annual report as completed in H1 2022).
Quite simply if they don't get their act together, patience will grow thin not only by investors but the host country under different regime management.
There was countless $millions raised for Niger.
We were told 2.8 billion bls mid case recoverable with the sokor alternances being the low lying fruit as proven by our own 100% success rate and the Chinese at 75%+ creating over 1 billion bls reserves.
The export pipeline is operational.
Quite simply what the eff is the excuse come the results in June and agm July if they haven't got a plan in place to significantly drive this forward.
Either bring a partner in with deep pockets or just keep time wasting where we ultimately don't benefit at all by delays and tracts of the PSC are relinquished under the PSC terms ?.
Seriously, come results/agm there needs to be a credible plan of action. Six months of this year will be gone. We are not a charity no matter how much the company claims societal good. It's just no longer credible or acceptable to be doing nothing of meaningful size. To go back to my opening lines, 10 years is shameful and any further waffling about future intended plans will no longer wash. Management need a collective boot in the hole re this fiasco of a situation not to mention their divergence to wind and solar while the oil assets there go nowhere fast. I intend to voice this directly to them and i urge other shareholders to do the same that this situation in my view is no longer acceptable and can't be dodged come results/agm.
The charts I am referring to is on the CPR document released in March 2024
https://wp-savannah-2020.s3.eu-west-2.amazonaws.com/media/2024/03/Nigeria-Competent-Persons-Report-18-March-2024.pdf
I was just looking at 2 interesting charts to see if there is anything that catches my eye and 2 charts particularly caught my eye, please see below:
1) Figure 4-2 Uquo Field production forecast profiles page 41 shows our production from roughly mid 2024 should be 190 MMScfd = 33,676 BOEPD.
2) Figure 4-4 Stubb Creek production forecast profiles page 43 shows our production being 5,000 BOPD from Stubb Creek
If those forecast are as accurate considering that were released in the CPR as latest at March 2024, than I expect us to between 35,000 - 40,000 Boepd by close of this year, unless i have misinterpreted what the chart is trying to tell. That doesn't factor in any production from Niger.
In that context our Accugas Contracts:
Long-term GSAs in place with the Calabar power plant (131 MMscf/d) and Lafarge cement plant (24.2 MMscf/d)
The GSAs have a combined 155.2 MMscf/d Daily Contract Quantity (DCQ) with an 80% Take-or-Pay provision
Additional interruptible GSAs are in place with:
Central Horizon Gas Company (CHGC), an Axxela subsidiary, for up to 10 MMscf/d
Notore Chemical Industries for up to 10 MMscf/d
Shell Petroleum Development Company of Nigeria (SPDC) for up to 3 MMscf/d
Shell Nigeria Gas Limited (SNG) for up to 3 MMscf/d
Oil export resumption by the date of the 2024 South Sudan Oil and Power Conference is good timing
https://sudantribune.com/article284900/
Nice to see ex Nigeria president driving investors to Akwa Ibom state as promoting gas development
https://leadership.ng/why-i-endorsed-akwa-ibom-for-huge-gas-investment-jonathan/
Porsche - I have seen this article a personally I don’t believe any entity will loan 2-3 x GDP it’s another silly caltech style news and not worth the paper it’s written on. A distant relative of the royal family is laughable.
It’s like saying I am related to the royal family and got them on speed dial
To repay this loan South Sudan will need a motivated o&g company to step in to help increase production.
https://www.al-monitor.com/originals/2024/04/uae-company-agreed-loan-13b-south-sudan-exchange-oil
CYB - totally agree. Am tired of hearing about how many African people still cook by burning wood! I want to know far more about the tactical BAU / day to day stuff that SAVE is doing. Yes ESG is important but give me 80% on growing production along with FCF ambitions and 20% on ESG. I won’t be bothering to attend another AGM. I think I’ve been to more than the CEO.
Thanks CYB. Very useful to re-read this excellent ppt even 2.1/2 years on, given the dearth of information provided subsequently to investors. As you say, the Gantt chart p 23 worth reviewing, as well as your other points which are spot on.
Liabilities on slide 11 interesting. As are the final 3 slides 38, 29, 30 - of footnotes / assumptions.
Ground breaking ceremony for plant in akwa ibom in local ibeno area right in the midst of accugas pipeline, attended by Nigeria gas minister.
https://independent.ng/windek-energy-breaks-ground-for-20000-mt-liquified-gas-depot-in-aibom/
Morning all.
I'm reposting the presentation which Andrew Knott made on new year's eve 2021 at the time of the CC announcement. I don't believe that it's on the website anymore.
I posted this a few weeks back but it got a bit lost in an RNS which fell immediately afterwards. Obviously it's a very long time ago but I thought some of you might want to revisit it.
Many of the Nigerian, Nigerien and Cameroonian elements are still relevant, I assume.
The Gantt chart at slide 23 is particularly interesting. It proposes quarterly operational updates. The Niger slides also set out progress to oil. Debt profiles also give an idea of ambition.
Clearly after this was published, the company’s attitude to investor engagement changed significantly. On who's advice, I wonder...
This is worth reading in conjunction with the upcoming 2023 financials in advance of the AGM. That meeting needs to significantly outperform last year's effort.
Best wishes,
https://wp-savannah-2020.s3.eu-west-2.amazonaws.com/media/2021/12/Restoration-to-AIM-and-major-acquisition-presentation-December-2021.pdf
Https://polaris.brighterir.com/public/savannah_energy_plc/news/rns/story/xq8nklx/export
So on 28th March RNS they stated that they would update us next week. that was 4 weeks ago. isnt there some law which says they cant lie to us
Just rallied too far and too fast. Positive fundamentals behind the move remain intact. Hopefully we get some consolidation and then NGN continues its rally.
After positive moves I note its now gone the wrong way from 1050 to 1300 derrrrrrrr
Absolutely agree.
200k bopd is within 2 years
Even 10% capacity via the pipeline is 20,000 bopd. CNPC will still earn a very decent transit fee.
From memory, it was the intention to be exporting 500,000 bopd before the end of the decade .
Been invested here since the shares hit 10p or so and have been silently following all the informative posts from Rocky (aga), zen, ntm, lst etc. greatly appreciate all your research!
the Charles Stanley have had this listed as 0.00 for several months in my account, seems to be reading at 28.50p on lse at the moment anyone else?
Zen: I couldn't agree more lets hope if we don't get news beforehand it comes in the Re-admission doc, fingers crossed