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The below article seems to imply that we should hopefully get first oil from Niger this year.
Meanwhile, London-listed Savannah Energy, the only Western oil company operating in Niger, plans to bring a new 1,500 b/d oil project online in the coming months before ramping up to 5,000 b/d.
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/052024-inaugural-cargo-of-nigers-heavy-sweet-crude-en-route-to-mediterranean
TiL - great stuff and 33mboe being reclassified from 2C to 2P should be SP enhancing too. Not sure how to calculate, in theory how much it should add to SP though. Maybe Z could refresh us on his views as I know he’s posted on this subject before.
Rocky ride it's probably not a comparison but the azule deal completion and the presentation this morning has put afentra at 6,800 bopd net with 32 million 2P and 20 million 2C and Afentra market cap at the moment is £130m.
So if we get Niger to 5,000 bopd and convert the 33 million 2c to 2p than we should add Afentra current market cap to our current market cap or thereabouts. Taking us to £500m market cap, plus if we can materially increase gas contracts post CPF completion than hopefully another 100 million in market cap as a result of that. Plus if we factor in Stubb creek production increase and deal completion with additional reserves, another £50m.
I think without acquisitions we have a credible path towards £600 - £700m market cap company without acquisition based on purely maximising our current assets without further dilution £600 - £700m market cap will put us in the range of 45 -50p share price. I believe any value beyond 50p will need to be boosted by another acquisition.
Personally I wouldn’t read too much into that article about first oil.
Rockyrides conversation with IR on 16 May confirmed “No new drilling taken place in Niger yet - progress proving to be quite slow”.
I think it’s just wishful thinking on the part of SPglobal and they are just quoting what SAVE has been saying about Niger first oil for several years.
Happy to be proved wrong though.
Although I did not press them on it I think they were talking about the new drilling program. For FO we already have wells drilled and need to tie them into the new pipeline. I’m quietly optimistic on this work-stream personally.
Trust Lie,
I see where you are coming from with the AET theory, but you should take into account the debt position of the two companies, and the quality of management in charge of each business.
With acquired barrells, and a lifting due soon AET potentially should be debt free this year.
Their management is in a different class to Savannahs ( which isn't saying much ).
I may be wrong but I would think AET will pay a dividend before Savannah does also.
Would like to see a decent operational update here soon. Shareholders deserve some info after very limited comms for 18 months.
Mcn77 - I agree and hence afentra is just a reference point and not a perfect comparison although I would say if the market hence confidence that we have achieved first oil in Niger and converted our 2c to 2p than it might also attach a premium for future potential of the whole accreage and its exploration potential. So first oil in Niger is a big phycological step change in the market perception of the companies potential and hence a higher share price
Agreed Trustlie
I really hope we can push on with Niger opps and get to 5k production.
Huge incentive to do this with the pipeline operational.
As has been previously highlighted,
Stubb creek production with Niger could offer decent revenues.
With the possibility of a reimbursement for Chad next year, Savannah could be debt free, with increased production, without further acquisitions.
Afentra was launched 3 years ago 5/5/21. They have good management and a small outfit. But they are not operators in any of the producing licences. Whilst SAVE have been on the go since 2014, the same opportunties may not have existed in Angola any earlier with their falling production and recent change in terms and seeking investors.
AET are doing the same as Save re West African acquisitions which started on a much smaller scale.
Afentra 2021 - "This is in line with Afentra's strategy of acquiring assets across West Africa with solid low-cost production, proven reserves and significant upside.
Their 3 acquistions at different stages started with 3,900 bopd, 780 bopd + 1300 bopd bringing them up to 6,000 bopd and 32 mmbo P2 (which have now reached circa 7,000 bopd as of now.
"This represents a strategic entry into a highly attractive West African jurisdiction with an implied acquisition cost of ~$4/boe, "
I don't see the reason to say AET have better management.
Save acquired, 'operate' and doubled the Uquo production, increased sales customers and increased reserves.
We did make a 100% discovery success rate in Niger demonstrating the rationale for the risk profile for discoveries (albeit without a pipeline and held back by a few years while the route was prefferred via Benin (more costlty) than previously in principle with Chad then delayed by Covid. We had more debt relative to the infrastructure nature of the assets (processing/pipelines versus just reserves/production) which were over $1 billion of value to replicate.
We have access to finance for deals. International oil Cos have faith to sell to us given our management credentials, ESG score and our ability to operate major assets that contribute 24% to keeping Nigerias lights on.
Chad (Exxon) as operator worth more than 15k bopd considering the pipeline - Let's see where it all ends up. We had a deal announced prior to the president of Chads early demise .
We've finally done the Sipec deal (Sinopec) for Stubb Creek which should bring us another 3.7k bopd.
Niger (hopefully) is now close to start up this year with a target of 5k bopd.
South Sudan 50-55k bopd and possibly 300 mmbo awaited one way or the other.
I bought into AET at the outset on their similar strategy but as non operators there can be things outside their control. I held Jadestone (top rated management) and thankfully got out near the peak before there were issues with the FPSO in Austraila where little political risk existed only to see the s/p decimated. You never know where anything can come from left field to throw a spanner in any investment. I think that's why AK said the risks are the same whether the assets are small or large and they've prefferred to go for sizeable acquisitions or that they are really compelling value accretive with no recourse on debt to Save.
Great article highlighting China influence on achieving resolution on Niger / Benin Oil exports
https://www.scmp.com/news/china/diplomacy/article/3263395/after-talks-china-benin-eases-oil-export-ban-against-niger