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Started: TrustILie, Today 09:15
Last post: TrustILie, Today 10:42
Agreed tier nothing to get to excited about just yet we are still a long way away from this being resolved. Personally I see this going all the way to December 2025 and arbitration anything sooner in savannah's favour will be most welcome but i am not counting on it.
We should stick to activities we can control and let chad play out it's natural course
I worked til 2am last night/this morning. Don’t need to but like to finish with the US folks for the week. Working from home is either overwork or underwork, never in between. As an employer you’re either lucky or unlucky to have your staff working from home. I generally carry on well into the evening. We’re all fairly committed to our company.
Sounds like the tweet just repeats the number rns’ed by Savannah? If it’s true than it’s definitely party time @ZengasMansion.
Thanks for your posts Trust. Good to read after a stressful week for me.
Highly likely untrue but here you are anyway
https://x.com/africanledger/status/1801838296512807344
Started: RockyRide, 14 Jun 2024 09:23
Last post: TrustILie, Today 08:34
5) Getting some additional renewable deals agreed would not be earth-shattering but would be nice to grow the pipeline in that respect and take us to 1GW+ in H2 2024.
6) Although highly unlikely, it would be nice to get some engagement from the Chad government in H2 2024, and one would assume an out-of-court settlement should be the best outcome for all parties involved, rather than waiting for an official ruling in 18 months especially as Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation. We are claiming $1bn plus but if we get circa $500 million savannah should take the money and be done with it.
I think it's fair to say the past 18 months of suspension and the release of the accounts have shown the business is resilient, and we have probably got the worst of our problems out of the way. I truly believe the next 18 months is where we truly unlock ourselves.
Going back to when we come back to the market, I said it previously, and I will say it again: we come back when we complete an enlarged deal, whether it's South Sudan or another.
My one ask of the company is that I am willing to give more execution time if they are able to keep the engagement and communication flow going. I have to say the past 18 months have been poor in that respect, but I am hoping we have turned a corner in this area now.
Let's see what the next few weeks and months bring, but to start off with, we have the AGM in 2 weeks, which should be interesting. It will surely be a forum for investors to air their concerns and frustrations to date, but here's to hoping Savannah is able to provide the reassurance of its current in-flight and future strategy with conviction and poise.
It's a two-way relationship, and Savannah needs to hold up their end of the bargain now and come good, especially in the context of the patience and understanding of shareholders that they have had to date and probably will still require.
Morning All,
Here are my thoughts in response to your question and for engagement:
1) They have mentioned completion of Sipec and South Sudan acquisitions in Q3 2024. Guessing completion on South Sudan is anybody's guess as we just don't have enough information on the state of play, and all we have got is the continued extensions and the word "advancing" used in every update. It seems like incremental speed each time, moving a bit like a tortoise towards the finish line, although we are yet to know how far the finish line is and how much of it is contingent upon the 3 main workstreams mentioned in one of the previous RNS's:
- Full year audited FY2023 accounts required for Savannah (This was released 7th June and will be signed off at the AGM by the Board on 28th June.) So this will be completed by the end of June. Nice and easy step 1 complete.
- Audited PCNL accounts. Rocky managed to elicit that this was due by mid-July, but let's assume it's delayed further by 2 weeks, so we say end of July. (I am guessing these accounts go through some approval and ratification process as well for sign-off, so let's assume end of August for full sign-off.) Step 2 complete timeline variation of plus or minus 2 weeks.
- Written government sign-off from the SS government. That's the big elephant in the room and where the risk of this deal inherently lies. Step 3 is out of our control, but I am hoping this is a formality and that such terms have already been agreed that it is binding on step 1 and step 2, giving the SS government a defined period of time to approve rather than kicking the can down the road.As far as the SPA we have struck so far, at the very least, the company needs to make good on completing the Sipec acquisition as a bare minimum. Albeit small, it adds credibility to the company's execution strategy. If it completes in Q3 2024, then debottlenecking should happen pretty quickly.
2) Completion of CPF facility targeted for H2 2024 - Accugas is our bread and butter and fundamental to our growth in the short, medium, and long term. I am looking for the company to deliver on this as a bare minimum. It would be nice if they were able to get it up and running in Q3 2024, but if not, then definitely Q4 2024, no excuses.
3) Tied to Accugas is the refinancing of our US$342 million Accugas debt facility. They have executed a transitional facility in Jan 2024, so hopefully, this is a precursor to fully executing the re-finance of the Accugas debt facility. Feeling more confident now than previously with the transitional facility that this is more a formality and probably timeline of sequence of events driven.
4) Progressing the R3 East Development project in Niger in Q4 2024 remains paramount for me, as I have always mentioned the first oil out of the ground in Niger provides a psychological step change for the company. In any case, I want Niger to be taken as seriously as near-term cash generative acquisitions.
When does everyone think we will resist? Don’t mind until SS completes. For me it’s still 50/50. I know a lot of you are feeling positive but I believe it when I see it. Not being negative I’m just a realist.
Brace yourselves for another hour long presentation at the AGM which lets us know how many people still burn twigs in Africa to cook food. Am also expecting Andrew to preach to us about how he can single-handedly increase life expectancy on the continent by >5 years…
The first pillar of our sustainability strategy is to promote socio-economic prosperity within the countries in which we operate. Access to energy is essential for economic development and human progress and is positively correlated with many other key human development metrics including those associated with educational attainment, life expectancy and quality of life. Energy is clearly therefore the critical enabler of human activity. Savannah’s gas enables approximately 20% of Nigeria’s thermal power generation capacity.
In Niger, we are participating in a wider energy sector project which is forecast to contribute up to 13% of Niger’s GDP by 2025. Through our Renewable Energy Division, we aim to deliver utility-scale renewable energy projects across Africa, generating clean, competitively priced electricity for millions of households. Currently we have up to 696 MW in renewable energy projects in motion.
Read more about how we are promoting the socio-economic prosperity of our host countries, aligned with UN SDGs 1, 4, 7, 8, 9, 10, 11, 12 and 16, in our 2023 Sustainability Review. bit.ly/3VpTOmM
Started: RockyRide, Today 08:25
Last post: RockyRide, Today 08:25
I’ll give them their due, SAVE are certainly building all the right pillars to be a very large company in the future. Their commitment to ESG etc is highly commendable. During the last 5 days, they have published 15 Tweets and they are all of very high quality.
Maybe just maybe, we are getting closer to some exciting news on the M&A front, whether it be SS or other. We also have negotiations with the Chad Governement ticking away in the background. Could we possible see a deal struck and announced re Doba & TotCo before SS closes.
Anyway it’s only 14 weeks until the end of September now - what are a few more months amongst friends?
PS Anybody going to the AGM? I ain’t!
Started: RockyRide, 13 Jun 2024 23:06
Last post: komakino, 14 Jun 2024 08:57
Ah, you could be right TiL, not that there was much of an update on transaction progress in the accounts. Had it in my head we'd get something more detailed, but I guess I was being a wee bit too optimistic. AGM it is then!
Unless you have heard otherwise from IR and we are due a separate update ?
Komakino - I believe they meant the 2023 full year accounts and they have covered on that. So not expecting a separate update based on that RNS just for SS as they have touched on it already since the 17th May update in the 2023 full year results.
If we did get a positive update than I am not complaining and will be welcomed by all. But personally not expecting anything shortly or certainly anything before the AGM.
Realistically, I would imagine the next update to be in probably late July or August of anything.
The last SS update on 17/05 said ' A further update on transaction progress, and associated matters, is expected to be made within the next four weeks.', which is today.
That word 'expected' again :-)
Hopefully something later on.
The numerous Tweets over the last few days clearly show that Savannah aim to be a very serious large player with regards African energy. The documents that they’ve produced and issued are not normal for a circa 23kboepd producer.
The stuff they are doing tells me that they are going to be a very big player and hopefully very soon.
From what I hear and read, I’m quite confident that SS will complete before the end of Q3 but I do have concerns about the route to market for the oil as the the situation in Sudan is getting worse week by week.
Started: cautionyourblast, 13 Jun 2024 16:39
Last post: cautionyourblast, 13 Jun 2024 16:39
Last post: RockyRide, 11 Jun 2024 18:36
4 more Tweets - nothing new but good to see we are starting to see news issued to the public domain.
Started: ZENGAS, 11 Jun 2024 14:49
Last post: TrustILie, 11 Jun 2024 15:32
Zengas - I saw that too and I am wondering that was also part of last year's accounts so I wonder if the other significant acquisition is already worked up but the rules may be restricting us from completing that deal as we are already suspended due to the SS acquisition, I am sure there must be some rules and regulations that would prevent savannah from either completing 2 enlarged acquisitions at once or to have the other significant acquisition to supersede the SS acquisition before some clarity is established on the SS deal
Regardless of waiting on S.Sudan completion as a $1.25b major acquisition, how big could the next 'significant' acquisition be perhaps before year end ?
P4 "We continue to actively review new acquisition opportunities focused predominantly on: cash-generative, or near-term cash-generative, upstream and midstream assets; and/or “bolt-on” assets for which there is significant synergistic value to our existing operations".
P24 2024 KPI on 'inorganic growth' "to deliver at least one significant M&A opportunity" (on top of completion of the South Sudan and Sipec acquisitions).
P26 "We expect to continue to acquire hydrocarbon businesses"
Started: TrustILie, 11 Jun 2024 09:28
Last post: TrustILie, 11 Jun 2024 09:28
Looking at the FY 2023 for the year ending December 2023 they have a wee mention of south sudan.
On page 38 of the report it say's the following -
"Completed the portfolio high-grading exercise for Myanmar and Chad while advancing discussions on South
Sudan exit with the host government."
Seems like the messaging we have got from Savannah is consistent and aligned with what Petronas say in the report which is throughout 2023 they have been advancing discussions.......
Add that to the the additional snippets we have received from Savannah this year, I am hoping that the commercial negotiations and contingency payments on conclusion of transaction have been agreed and it's simply a case of having audited 2023 accounts for PCNL with South Sudan government approval on having sight of these accounts to approve deal and progress.
https://www.petronas.com/sites/default/files/uploads/content/2024/PETRONAS-Integrated-Report-2023.pdf
It will be interesting how much they will be able to disclose during the AGM if additional news on the deal is not provided to the market by the AGM at the end of the month. I am sure the inevitable question they will not be able to avoid is people natural asking about this deal.
Rocky did mention that audited PCNL accounts are probably due mid July if that is still true than surely by the time of the AGM this month the company should have an indication of completion of the audited accounts. One would still guess that the written approval from the government has yet not been received and if the PCNL accounts are done and dusted in the next 4 weeks assuming and we are still waiting for receipt of official government approval than the natural question will be how long can we continue this deal if all the steps required by Petronas and Savannah have been completed.
I am hoping that some sort of pre-conditional agreements are already signed between Petronas, Savannah and the south sudan government and it's a simple case of having audited accounts of PCNL which makes approval of the deal, payment structures and deal completion binding. As supposed to waiting on the whim of SS government on whether they want to sign or continue to drag this out.
Started: RockyRide, 10 Jun 2024 18:46
Last post: RockyRide, 10 Jun 2024 18:46
Maybe the comms dept are starting to grease the wheels ready for some significant announcements. Here are another 3 Tweets from this afternoon:-
Our US$45m compression project in Nigeria is on-budget and on-track for completion in H2 2024, which will enable us to maintain and grow our future gas production levels.
We are pleased to announce our FY 2023 results: Total Revenues of US$260.9 million and average gross daily production of 23.6 Kbopd, with financial guidance achieved or exceeded for the year.
We continued to increase our gas customer diversification in Nigeria during 2023, with gas sold to nine gas customers at an average realised sales price of US$4.51/Mscfe (+9% increase on the prior year average).
Started: cautionyourblast, 10 Jun 2024 15:37
Last post: cautionyourblast, 10 Jun 2024 16:28
Thanks, kinkell. Returns need to be up there given the risks. I'd love to see the model that gets them there: number of years of income; credit risk haircut; etc.
Risk of expropriation of renewables, once operational, seems far higher to me than hydrocarbons.
I recall Andrew saying 40% IRR in an interview.
Https://x.com/Savannah_Energy/status/1800155843377426800
I'd prefer to focus on hydrocarbons.
What's the IRR on these renewables projects?
What's the payback period?
What's the NPV at a COC of 14.1%?
Hmm...
Started: cautionyourblast, 10 Jun 2024 11:26
Last post: Tier, 10 Jun 2024 12:14
‘investor call’
Thank you C. Zengas has some major competition :)
I certainly have difficulty in fully understanding the account. Will be good if the money man and AK hold an investor answering our questions. Rock please request this next time you email them. Long overdue communication with the retail investors.
Thanks CYB nothing tedious about it at all and thanks to you and others on here the many thought provoking questions and answers allow a better understanding of what we are invested in. Keep it up
2/2
18. Chairman’s Statement. Box on page 9 “Ethics - Doing the right thing” is clearly aimed at a number of parties and a VERY good addition in my opinion. No further comment!
19. Page 119: “The Company communicates with shareholders and potential investors through a variety of channels, including the Annual Report, regulatory announcements, operational updates and a proactive and comprehensive investor relations programme which is managed in line with operational developments, corporate news flow and the Company’s financial calendar.” … “In addition to our interaction with institutional investors,
we regularly engage with retail investors via an investor call.”
Page 8 (Chairman’s Statement) “The Board continues to place great emphasis on engagement with all our stakeholder groups”
Not in respect of retail investors, Joseph. In respect of us, these comments are a load of cobblers.
20. Page 116: “Significant issues related to the financial statements: The accounting for, and valuation of, the Group’s investment in COTCo” I’m unsurprised that this is top of the list. I note there is no receivable recognised, with a matching deferred revenue line, which is what I had originally expected. The other significant issues as set out in this para are exactly what we would’ve expected, I think.
21. Resolutions for the AGM. I’m disappointed not to have an opportunity to vote down any NEDs, given the woeful levels of engagement this year.
I’ll likely have more comments later in the week. I hope these posts aren’t too tedious for you all to read, but I probably have a bit more time to delve into the financials than some of you, so I may as well share it.
Best wishes
1/2
Here are some further thoughts on the financials.
13. The average interest burden for the year was 14.1% (I’d expected 14.5-15%). While we’re paying interest at these types of rates, getting the debt burden down remains paramount. I always read comments about dividends on this bulletin board with some amazement.
14. The “Other operating income” of USD28.9m in respect of the FX true-up (which Porshefund kindly flagged): has it been paid?
15. Cashflow: cash at year end has fallen from USD241m to USD107m. When adjusted for the counterpart who paid USD98m in January, the cash fall becomes USD36m. Actually, this looks pretty good when the impact of the Naira collapse is taken into account.
16. Porsche - I’m also re-reading your note of Contract liabilities from 8 June. Since Contract liabilities have increased during the year (albeit by less than the 2022 increase as you helpfully point out), overall our customers have paid for more gas than they’ve taken, though of course some may be taking make-up gas whilst others clearly aren’t. There’s an important comment buried in the Audit committee considerations at the foot of page 116 under the title “Significant issues related to the financial statements”:
“- Appropriate recognition of oil and gas revenue -including ‘cut off’, recognition of contract liabilities and make-up gas utilisation”.
I think the risk of customers asking for a reduction in contracted gas remains, as occurred with Lafarge in 2020. But perhaps I’m stating the obvious.
I struggle with the expected credit loss calculation stuff and the note on page 192 is difficult to understand, for me at least. It’s comforting to know that I was never cut out to be a credit officer.
17. Page 97: The Transitional Facility. This, I really don’t understand! We seem to be borrowing NGN under this new TF which, apparently, we can draw down on and swap for USD in a limited amount, over time, to pay back our USD lenders (some of whom, one imagines, are the same parties in the five-bank TF consortium). We’ve got USD75m of (one assumes, mostly) NGN at year end (see segmental reporting note). Can’t we spot some of that for USD to repay some of the dollar debt? Or has the further weakening of NGN in 2024 meant that the balance is simply being kept for operating expenditure in-country?
Started: Porschefund, 8 Jun 2024 12:24
Last post: cautionyourblast, 9 Jun 2024 16:48
If Savannah does renewables in SS, I'd be amazed if it were anything other than hydro on the White Nile. Goodness knows how it'd get financed, mind...
SEGSS Limited changed its name to Savannah Energy MD Ltd on 6th June 2024. SEGSS Limited is listed as renewables company in the 2024 AR. We previously guessed that SEGSS stood for Savannah Energy G? South Sudan Ltd, could this indicate that a South Sudan renewables project is advancing in line with the acquisition?
Hopefully we should get some clarity with the promised strategy presentation "We intend to provide more details on the individual projects we are developing within our Renewable Energy Division at a strategy presentation later in 2024"
Started: cautionyourblast, 8 Jun 2024 08:37
Last post: Porschefund, 8 Jun 2024 11:24
CYB your comment: Interesting that we have a true-up mechanism with our “principal customer” for FX losses.
On page 166 (b) “Other operating income of US$28.9 million (2022:US$7.8 million) relates to the invoicing of foreign exchange losses incurred on certain customer trade receivables that are settled in a currency other than the invoiced currency and are permitted to be invoiced to the relevant customer.”
This paragraph suggests customers in the plural rather than principal customer. As US$166.9m of revenue relates to two of the Group’s customers can we expect further true-up income in 2024 onwards.
It’s worth analysing the impact of the planned maintenance programme. 2023 gas sales of $202.744m at $4.51Mscfe compared with 2022 gas sales of $181.125m at $4.14 Mscfe indicates an increase in delivered gas of 2.75%. The planned maintenance programme therefore only appears to have impacted on make-up gas. This is confirmed by a reduction in the value of reduced net additional contract liabilities that only increased by $32.334m in 2023 compared with an increase of $92.3m in 2022. The assumed lost production of $60m would not have impacted on profit but, after payment, would have reduced net debt by $60m.
Historically getting paid for make-up gas has been more difficult, this may be part of the reason for the positive effect of the reduction in the Expected Credit Loss (ECL) percentage from 28.18% to 12.66%.
Unless the make-up gas is taken the return to normal production will will only have a positive impact on the 2024 cash flow but the ECL could return to nearer normal levels and impact on the bottom line.
I think its fair to say Savannah's financials were hit by a number of one-offs. If you adjust for the late payment you mentioned, net debt/ EBITDA (net lev) falls from 2.6x to 2.0x. (So almost in line with last years 1.8x). Then you have to look at the difference between actual adj EBITDA ($184m) and Nigerian business EBITDA ($214m). SAVE say that the majority of the difference was due to central costs largely related to set up costs for the CHAD business. Given Chad is gone, those costs will not be repeated. Thus if you use the nigerian EBITDA and adj for late payment net lev falls to 1.75x (a touch lower than last year). For completeness you also have to acknowledge the big cash value lost due to the huge depreciation of the NAIRA. Im not going to adjust for that, but would be unreasonable to expect net leverage to have been closer to 1.0- 1.5x type area.
So all in all results were pretty decent. Hopefully one-offs like these will not be repeated next year.
I believe I'm right in saying receipt of the slightly late payment falling into 2024 rather than 2023 of $97.8 million brings that leverage back into line (7).
I wonder who our principal customer is or if it should read principal customers ?
Thanks CYB. I had to stop reading when I saw the B*** pic so thanks for sharing the subsequent info.
Started: RockyRide, 7 Jun 2024 19:55
Last post: RockyRide, 7 Jun 2024 19:55
On 5th April we were told:- Publication of the AIM Admission Document requires the release of the Company's FY 2023 audited annual results, together with the finalisation of the audit of the financial statements for FY 2023 of PCNL.
So that’s ours published today and it will be worth us keeping an eye on when Petronas Carigali Nile Limited (PCNL) issue their audited 2023 results. This could quite possibly be one of the last pieces of the very large jigsaw and I guess the SS Goverment would not sign off the deal until ALL the preceding steps / workstreams have been completed.
Additionally I find it very positive that Savannah stated in todays RNS:- Savannah has already undertaken significant preparation work associated with the completion of this acquisition, which is now targeted for Q3 2024.
Of course you expect that they would have undertaken significant preparation work but for them to state it so clearly in today’s update is a very positive sign for me.
So with SS looking positive to me and also that we could be negotiating a settlement payment from the Chad Goverment, I think we have a great deal to look forward to.
Wow - how nice would it be to announce a Chad out of court settlement before and Ad Doc and relist with the SS deal in the bag! Now what would that lot do to the SP? In that scenario we could quite possibly be net debt free from Accugas and South Sudan and producing circa 80kboepd. Dream over LOL
Started: RockyRide, 7 Jun 2024 12:16
Last post: Tier, 7 Jun 2024 17:07
Before logging off for the weekend, I want to reiterate how grateful I am you all, Zeng, Trust, Rock, Caution, Scot, and many more here and on the other board, for your endless contributions. I had been uneasy with this investment for a while, devaluation, Chad, SS.. liquidity issue, the list goes on. Without you all tirelessly posting over the last two years, I wouldn’t be able to cope. I won’t cash in. Have a lovely weekend you beautiful people.
Thank you Rock. We need to protect our investment. Not to be tarnished.
I got them to change the report:-
Savannah Energy shares are currently suspended due to a reverse takeover by Petronas International Corp. Last traded at 26.25 pence in December 2022.
Just goes to show how stupid AI can be sometimes!!!
Alliance News) - Savannah Energy PLC on Friday reported a weak financial performance amid challenging economic conditions.
The Africa-focused energy company reported a USD68.9 million pretax loss for 2023, widening from USD53.7 million in 2022.
Savannah Energy shares were down 64% to 10.00 pence each in London on Friday afternoon.
Total revenue fell by 10% to USD260.9 million from USD290.4 million, while operating plus administrative expenses increased 4.0% to USD68.8 million from USD66.2 million.
Capital expenditure fell 80% to USD13.0 million from USD66.2 million.
The company ended the year with USD484.9 million current assets and USD638.1 million in current liabilities.
Chief Executive Officer Andrew Knott said: "Our core business continued to perform strongly, while we have progressed our projects in Niger during a period of political change, progressed two separate hydrocarbon acquisitions which are material to our business, continued to grow our renewable energy business, managed the impact of the nationalisation of our Chad assets to ensure that we receive the value we are due and positioned ourselves strongly to announce further new and exciting projects in 2024."
Throughout the year, Savannah Energy said it had to contend with rising inflation and falling energy prices, with benchmark oil and liquefied natural gas prices decreasing 18% and 38%, respectively.
Looking ahead, total revenue in 2024 is guided to exceed USD245 million and operating plus administrative expenses will increase to USD75 million. The company intends on increasing capital expenditure to USD50 million.
By Elijah Dale, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Started: RockyRide, 7 Jun 2024 15:56
Last post: RockyRide, 7 Jun 2024 16:00
PART 2
Nigeria remains the backbone of the company currently and the $45m being spent on the compression project at the Uquo CPF is expected to operational in H2 2024 and will enable significant further growth in gas production ‘over the coming years’. Also, completion of the SIPEC acquisition this year will materially boost reserves and resources and thus is expected to more than double oil production at Stubb Creek to 4.7 Kbopd on completion and debottlenecking plus, with the addition of 227 Bscf of 2C Contingent gas resources, secures significant additional feedstock gas supplies for existing and future customers well into the future.
So I would say that Savannah is looking very strong in its key focus areas, as I have said above it has a number of strictly defined targets according to that ‘robust’ model. Shareholders can expect a significant increase in renewables, further hydrocarbon acquisitions and of course the refinancing of the Accugas debt facility, closing of SIPEC and with the Chad disputes ongoing with claims of over $1bn at the arbitration processes set to conclude by end 2025. I’m very much looking forward to the shares returning from suspension.
PART 1
Andrew Knott has reported a good set of financials today and his comments are upbeat, reporting Total Revenues of US$260.9m (11%+ ahead of guidance) and average gross daily production of 23.8 Kboepd, broadly in line with FY 2022 production when adjusted for a planned maintenance programme. These results coincide with the Savannah Annual Report which is always worth a read with articles about the company ethos and some thought-provoking pieces from other distinguished authors
These numbers beat guidance and show that Savannah’s business model is robust, which together with sufficient corporate capacity and infrastructure mean that the core business performed strongly. In Niger, for example, despite last year’s political changes, Savannah has announced that flow testing will commence in Q4 2024 and should lead to first oil in H2 2025 or early 2026, to be transported through the newly-operational Niger-Benin pipeline.
The company is progressing two ‘material’ hydrocarbon acquisitions in South Sudan and Nigeria. Although the market awaits further details on the proposed acquisition of all of PETRONAS’ assets in South Sudan, it’s worth noting that in 2023 these assets produced 149 Kbopd (gross) of crude oil, materially lifting Savannah’s gross (and net) production on completion. Savannah has already undertaken significant preparation work associated with the completion of the acquisition, which is now targeted for Q3 2024.
At the same time, Savannah is also uber committed to grow its renewables business which is shown by the growth of up to 1 GW+ of projects in motion by end 2024 and now a new target set of up to 2 GW+ in motion by end 2026 – exciting projects such as the up to 250 MW Tarka wind farm in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon. These are large-scale projects expected to supply up to 34% of Niger’s electricity demand and boost Cameroon’s on-grid electricity generation capacity in Northern Cameroon by over 50%. Funding via two leading Development Finance Institutions is already secured for two-thirds of the development of the Tarka wind farm project, with project sanction expected in 2024 and first power in 2027. The Cameroon project is not far behind, with project sanction expected in 2026 and first power in the 2027 to 2028 window. Savannah are clearly excited in this area and I understand that they are positioned very strongly to announce further new projects this year.
Thank you for the clarification.
See my post from May 21st
From memory, part of the issue is that Acugas contracts are priced in USD but paid in NGN (at least for the main contract). Contracts have a true up clause, so any negative FX moves between delivery and payment are protected. The challenge here is that you cannot easily convert those NGN into USD to service your debt.
So the NGN sit there as cash balance, compounding at 20-25%. However, your debt remains in USD. And when Central Bank devalues NGN you are not protected for the cash balances you have. This is the part where the FX losses come from. And this is where debt restructuring into NGN will help.
I'm looking for some clarity on the "true-up mechanism".
" Our customers pay for gas predominantly in Naira however under the terms of the GSA with our principal customer, the exchange losses realised can be invoiced via a true-up mechanism."
Having second thoughts about my earlier post. Accugas revenues are paid in NGN, but priced in USD. So the FX losses are not necessarily on the $ debt, but the NGN cash balances held. This is $58mm worth (footnote 24) at end 2023.
Questions / observations:
1) FX losses in the annual report are only on the NGN cash balances, not on the $ notional of the $.
2) Assuming max reported FX losses of $40mm for Q1 ($58mm * 68% NGN deval).
3) Is the debt facility notional lower than our $ Accugas debt because we used (some) of the NGN held in the bank?
4) What are the details of the facility? Has the bank consortium paid off the $ debt 1:1 ($231mm) or almost entirely (ie. combining NGN debt facility + NGN cash $231 + $58 = $290mm)?
Dont fully graps the interplay of the debt facility, NGN cash balances, and potential hedge ratio of the $ debt...
The question to me is the effective date of the facility in Jan 2024. NGN started 2024 at around 900, but stood at 1400 end January. We if captured the period where NGN was 900, then we have hedged about 2/3 of the debt, and should accumulate FX losses only on 1/3 ($110mmm) of the Accugas debt.
Started: longshorttrade, 7 Jun 2024 09:09
Last post: longshorttrade, 7 Jun 2024 09:09
Is it possible compansation may come in the form of smaller stake in production asset but becoming operator with view to increase BOPD by 30-50%, retain Cotco stake and small nominal cash repayment $50-100m as we would never see $1b+ comp from a small African country. ?
Started: TrustILie, 7 Jun 2024 08:34
Last post: TrustILie, 7 Jun 2024 08:34
Savannah Energy+ (SAVE, Suspended, Under Review)
2023 results exceed guidance, multiple catalysts ahead
Savannah Energy has reported FY23 financial results this morning, which exceeded guidance. Total revenues of $261m (11% above guidance) reflected a 9% YoY improvement in average gas sales realisations in Nigeria to $4.5/Mscfe, while both operating expenses (inc. G&A) and capital expenditures were below guidance. 2023 Adj EBITDA was $184m, and Savannah ended 2023 with net debt of $474m. The report outlines the broad base of catalysts Savannah has in H2 2024 and beyond, all linked to its goal of further material growth within Africa. Completion of the proposed South Sudan oil asset acquisition from PETRONAS is targeted for Q3 2024, with the shares remaining suspended until the related AIM admission document is published.
2024 guidance: 2024 financial guidance is for Total Revenues of >$245m, with operating expenses and admin expenses totalling up to $75m, and capital expenditures of up to $50m. This excludes the impact of acquisition activity.
Nigerian operations: In Nigeria, the gas compression project at the Uquo CPF is on track to complete in H2 2024, enabling the future expansion of gas production for delivery to customers via its Accugas midstream subsidiary. The refinancing of Accugas’ $342m debt is underway with a new NGN340bn (c.$225m) transitional facility signed in January 2024. The recently announced purchase of its partner’s interest in the Stubb Creek oil field is due to complete in Q3 2024 and is to be followed by a de-bottlenecking programme to double production from the asset to around 4.7kboe/d.
Further catalysts across Africa: In Niger, flow testing of key fields within the planned R3 East Development project is scheduled for late 2024. The results can help optimise the development ahead of targeted first commercial oil production in 2025/26. The country achieved first oil exports via the new Niger-Benin export pipeline, with CNPC reportedly now transporting c.90kbbl/d. Meanwhile, Savannah remains ready to discuss its disputes with the Government of Chad on the March 2023 nationalisation, in pursuit of “an amicable solution” ahead of arbitration proceedings that are expected to conclude in H2 2025. Savannah’s Renewable Energy Division also remains very active with 696MW of projects in motion across Niger and Cameroon. Management expects this to increase to over 1GW by the end of 2024 and up to 2GW by end 2026.
Started: longshorttrade, 7 Jun 2024 08:27
Last post: longshorttrade, 7 Jun 2024 08:27
Disappointed as i expected to be due to net debt increasing, FX Loss but pi--ed off that yet again Niger has been put back nearly another 2 years WTF.
On a plus side SS deal still alive expected to complete Q3 2024, acknowledgement by Chad Govt compensation is due (though not forthcoming) and finally drawing down the Niara denominated debt restructure (very positive. $98 comes into H1 2024 figures so i imagine no relist before H1 prelim results release as they could be positive .
Darien, the more detailed update came in the RNS on the 5th April. For some reason it's not showing on this site but you can find it here: https://ir.design-portfolio.co.uk/viewer/111/62140
17th May RNS: A further update on transaction progress, and associated matters, is expected to be made within the next four weeks. so its 3 weeks tomorrow. who is betting on next week getting more news..
RNS 28th march states: The Company will provide a more detailed update regarding the ongoing process to complete the transaction during the course of next week.
6 weeks later....RNS to tell us nothing
So probably Results 4.30 today or 7.00am tomorrow
Thank you 911. Surely we should still have an SS update as promised? Though likely to be non-newsworthy.
Started: RockyRide, 3 Jun 2024 20:26
Last post: cautionyourblast, 5 Jun 2024 03:40
It seems that the electricity outage was short-lived.
https://guardian.ng/news/nigeria/national/strike-senate-condemns-labours-excesses-vows-to-prevent-repeat/
No idea if it stopped us pumping gas. I had considered whether the stoppage would allow our customers to claim force majeure. Decided it was unlikely unless the power cut physically stopped them being able to take the gas (though that may have been the case of course. Also, we may not have been able pump it, so FM may have been superfluous anyway. And it's all over...for now, apparently.
Power cut across Nigeria as workers go on strike https://www.bbc.com/news/articles/c6ppwz87vgqo
Started: RockyRide, 3 Jun 2024 22:52
Last post: rumpelstielzchen, 4 Jun 2024 16:45
I get it, they operate in difficult jurisdictions so things can get delayed. However, looking at how other companies operating in similar jurisdictions update the market / investors it makes me wonder if SAVE is taking the Mikey. The announcements from SAVE on ESG related topics are nice to have, but I wonder if SAVE understand their investors. Any ESG investor first and foremost looks at the fundamentals before even attempting any ESG assessment. So what is the value of those ESG related reports if there is ZERO comm on fundamentals. Very frustrated here. I can see people selling on relisting because of exactly that frustration.
Tier, well I'm pretty sure no one has sold up... :)
Joking aside, I'm just waiting for some company specific news, in fact any news will do, instead of this company silence for us shareholders that it would seem don't exist...
Realise and understand the silence with SS/Chad, but they are not exactly selling themselves with the other important elements of the business in Nigeria/Niger etc
Rant over and as an aside,
I must Thank the many posters on here for the very informative updates, very appreciated 👍
Honestly where’s everyone? When you thought there will be posts there aren’t and vice versa.
Thanks for sharing this, Rocky.
It's beginning to remind me of Stewie asking Brian about his novel in Family Guy...
If all is fine then why nine months on still nothing?
Started: RockyRide, 30 May 2024 15:29
Last post: RockyRide, 3 Jun 2024 22:28
I’m still in touch and have a monthly call. In addition to my calls Sally used to reply to emails but she no longer does. I’m told she still works for Savannah but have not seen anything from her for quite some time.
Rocky are you still in touch with IR or they just ignore you? I’m worried though this going concern topic was intensively discussed on the rns dated 29 Sep 2023. The statement was in previous year’s report but I don’t think it was as strongly worded.
The going concern statement is, from memory, similar to previous years. Difference this time is the floating Naira & associated volatility. We need $$$ but can't see banks playing hardball with the court case / compensation outstanding and S S still in the mix
Cyb - from memory did it say something like:-
Failure to restructure the Accugas debt could result in a material risk to the company and the BOD could not guarantee Savannah would be able to continue as a going concern. - Like you say very sobering…
How on earth have we ended up in this situation? AK was taking about getting the debt restructured and aligning it in 3 phases to map on to out 15 years of long-term gas contacts way before the 2 significant devaluations to the Naira. We should have got our own house in order before spending circa $40m on very risky M&A deals in Chad and SS.
The only thing that gives me a bit of reassurance is that we have a debt provider willing to fund the remaining share of Stubb Creek along with some cash from ourselves - or at least so we are told. To be honest, I don’t believe anything at the moment and will only take the Stubb Creek transaction as a given when and if it is announced as completed.
Let’s hope we see some reading pleasing to the eye when we get the 2023 finals and hopefully some post period updates.
Hoping to see the 2023 finals sometime this month. My understanding is that the finals have to be reported by the end of June and that the AGM could follow 2 to 3 weeks afterwards.
KTF
Where’s everyone?
Started: cautionyourblast, 3 Jun 2024 07:47
Last post: cautionyourblast, 3 Jun 2024 07:47