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After strong buying start to the day the MM's are trying to squeeze the bid and offer down as they don't have stock to sell and will try and persuade a few holders to give up their shares.
If its all blue why is the SP dropping
Interesting to watch the behaviour of the Market Makers on RSP this morning. Despite strong buying (though less than yesterday) they are working in unison to try and drive the sp down. Why? Because they sold millions of shares yesterday that they don't have and want to get from PI's at lower prices to make money. As long as PI's keep buying today and the sells remain as few as they have been this fake drop in sp can't go on. Likely to be in the 20s by next week imho. Today to date we have 900k buys and 550k sells including the latest 300k sell. Looking very healthy.
MM playing games. Hold everyone dont give them your shares
I'd have expected this to be into the 20's p yesterday or at least today. If there was even pretty full on buying pressure then the MM's would have to let this go readily enough. It shows to me what an unloved space the O&G AIM one remains. Too many II's/PI's looking at glass three quarters empty in this sector as their default.. and plenty of that is off the back of the renewable instead of non renewable theme imho. The excuse of a few workstreams still to complete ahead of the deal finally completing will of course be cited. In a more positive environment those streams would be expected to happen relatively smoothly/quickly and the price would more reflect this deal very likely completing by end Oct. Alas even when it completes sentiment may well still be poorer than it should/could be thereafter too. So getting to 40p here might be more hard fought than some here might think...
I have just added a few. Unfortunately in a position now where had to sell elsewhere to add so dumped BNC, I had a 6.5% divi, 2.5 x covered and a pe of around 7 there so just goes to show confidence now in savp. Imo this is just an investor lag. There is a lot of info for insti’s to absorb. We haven’t seen many big buys yet most looked autonomous or PI. I think the trading compares to ECO where they had news and then the SP pulled back only to take off again in last couple days. We’ll see, Trek.
I hold both ECO (Canadian market) and SAVP. I initially bought SAVP at around 27p, sold at 15p and bought back in at sub 13p so I'm still down on my original investment. I wouldn't be buying more SAVP right now as I think they'll drift back in the next few months until the confirmation of the 7 deal . These companies share prices often do as a lack of announcements will inevitably result in a drip drip effect as people offload for "more exciting" stocks.
But once the deal is finally done I would hope that the price would get back above the 30p mark and then go higher depending on future drilling. That won't happen until next year though.
ECO is different - they (well, Tullow) went straight into another well after the first discovery. The prospects for this look just as good as the first so folk will keep buying on anticipation of more success. The difficulty now comes from trying to decide whether to offload all, some or none.
As for SAVP I'm not selling any.
I doubt the sp here will drift down much. There are a few potential catalysts relating to Niger as well as 7E to come in the near future. I have bought more today. Agree Trek that insto's have not been buying but given a few days that coud change/ Even if not the short-term upside remains over the next couple of months.
I think you should compare the market caps of SAVP and ECO. SAVP 167m compared to ECOs 250m. Then check the fundamentals.
PIs will pay a premium for the thrill of the drill mcb77 - SAVP's turn is coming for that and fairly soon.
Spread is killing buys
Interims are out next week, might be a broader update then.
It looks like there were some sells being worked today after all - around c3m, still not enough to cover yesterday's buys. The sp is beginning to rise a little - the sells may have cleared for now allowing a slow rise?
Keeping it simple we raised at a discount at 28p, oversubscribed, without ministerial consent. We get consent and are now at 19p and all the other research still applies including 5 successful drills. So why wouldn't you want to now pay 19p for something that was without consent 28p. No idea so I bought more today. Treklogic. Gla
Incontrovertible logic Trek!!! Well done!!!
I've bought back in up to the limit of my means.........only wish I had more funds!
Only patience needed now me thinks!!!
GLTA. NK.
https://www.legit.ng/1255460-full-list-buharis-ministers-portfolios.html?utm_source=onesignal&utm_medium=webpush
AUGUST 21, 2019 / 1:54 PM / UPDATED AN HOUR AGO
Nigeria's Buhari assigns cabinet portfolios, appoints new oil minister
ABUJA (Reuters) - Nigeria’s President Muhammadu Buhari swore members of his cabinet into office on Wednesday, assigning a new minister of state for petroleum in Africa’s top producer of crude oil.
Buhari kept the petroleum portfolio for himself, as in his first term, and appointed Timipre Silva as minister of state for petroleum, who is widely expected to manage the portfolio on a day-to-day basis.
Nigeria, which has Africa’s biggest economy, remains heavily reliant on crude oil sales despite efforts by Buhari to boost non-oil revenues since he first took office in 2015. Oil sales account for about 90% of foreign exchange and low oil prices helped to push the country into recession in 2016.
Silva, a former governor of Bayelsa state in the southern Niger Delta oil production heartlands, replaces former ExxonMobil executive Emmanuel Kachikwu who was the country’s main representative at OPEC meetings.
Zainab Ahmed retained the position of finance minister.
The cabinet of 43 ministers faces a long list of challenges including tepid growth following its emergence from recession in 2017, along with high unemployment and widespread insecurity.
The move to assign portfolios comes six months after Buhari won a presidential election and nearly three months after his second term began. The time taken to appoint ministers caused jitters amongst investors and threatened growth prospects.
Reporting by Felix Onuah in A
Well put, Trek. Added to my heavily overweight position.
Key positions:
President Buhari - Minister of Petroleum
Timipre Sylva – Bayelsa State – Minister of State for Petroleum
Sale Mamman – Taraba State – Minister of Power (new ministry)
Goddy Jedy Agba – Cross River State – Minister of State, Power
https://punchng.com/breaking-buhari-unbundles-ministries-merges-creates-others/
I bought more today also. I’d say best upside/risk share at present and would be surprised if this is not 30p plus by Xmas, and not surprised at 50p plus.
Lots of risk free news flow to come.
sankeys I agree. Risk almost all to the upside. Wider market sentiment has held this back a bit but a bit of buying pressure today moved the offer up so it wouldn't take much to keep a gentle rise going over the next few weeks which is fine by me.
Very good point made today regarding the placing in January at 28p ( without ministerial sign off ).
I have mentioned before in December 2017 the placing to finance the deal was 35p. Andrew Knott, and various institutions participated in both placings, and you would think they would have targets way above this considering the deal has since been vastly improved in Savannahs favor.
Now we have ministerial consent, and are on the verge of completing the deal. Since the 35p raise as mentioned we have also had great success in Niger. Fundamentals looking excellent !
With the share price at 19p, some serious gains could occur when you consider the above.
2 days after the potentially transformational official signing RNS, and we get just 11 posts.
So still way under the radar here, with many, many potentially interested buyers still waiting for the other conditions precedent to be cleared away before finally giving this counter the thumbs up.
Agadem,
I'm so glad you have found the extra funds to lower your average in SAVP. I know you have burnt the midnight oil in support of this company and deserve a big win for your forbearance.
I am still struck by Trek's post yesterday, highlighting with impeccable logic the undervaluation here, even at 19p, compared to the last oversubscribed placing price. It seems to me that even if somehow not all the $50mn cash proceeds get carried across in the Seven E closing , that would only make a few pennies' dent in the value here. We've been satisfied that time hasn't run against us in Niger, in terms of licence expiration. And cash calls in the Niger exploration program may be curtailed if AK delivers a solid farm in agreement with a major. And that $12.5mn dividend potential, even at today's price and MC, is around a 6% yield, with all that upside growth to come in Niger and Nigeria. What's not to like?
O&W the company's more recent announcement say that at least some of the $12.5m may be used for share buybacks.
Usually I am not in favour of these, but given the big disconnect with the value, it seems sensible here. It should also take out some of the big sellers.
Previous presentation (5) highlighted signficant gas sales growth potential upon acquisition of additional upstream gas resource. (Intend to buy more gas assets - current fields most likely guarantee/satisfy long term supply agreements to existing contracted anchor customers). Some use of future free cash flow for additional reserves.
On Significant spare infrastructure capacity (24) -
The gas processing facilities have circa 25% upside for gas throuput versus current contracted volumes. (Beyond that i beleive bolt on/modular expansion system ?).
Pipeline delivery network has 160% additional throughput availability.
40 TCF undeveloped gas located in the surrounding area (6.6 billion boe).
With Siemens etc/contracts awarded recently to deliver more infrastructure - Savp slide 24 shows projected electricity demand to grow significantly under "huge energy demand forecast".
Accugas is the only significant gas processing and transportation system in the South East of the country - would cost in excess of £1 billion just for infrastructure to play catch up for a competitor and likely pointless and why ?.
Compelling switching economics (never mind environmental) from diesel @ $10/mcf equivalent to gas @ $3.50/mcf.
Niger 119 drilling prospects mapped so far.
6 proven play types within many of those prospects yet only 1 materially explored (ie Sokor Alternances).
Oil shows and discoveries have been found across the entire "length and breadth of the entire basin". "All wells drilled have found reservoir in the Sokor Alternances" .
Under the terms of the PSCs, the petroleum code of Niger and its decree, Savp has rights of access to 3rd party infrastructure.
With the English courts due out of recess end September it should be completion in entirety very soon afterwards.
Niger Farm out potential could gather pace now deal closure is imminent.
Over time i expect the risked value for Nigeria to increase from the current 55p to more than double giving the opportunity. It's not being purchased to stand still and is a major growth driver for the company.
The Niger prospects (119 so far) are capable of delivering many multiples in new discoveries to the 100% success rate so far on 5 out of 5.
Solidly backed by blue chip institutional investors and World bank with World bank and Standard Chartered gas payment guarantees.
81p current fair value by Mirabaud which i expect to see steadily increased over the next 24 months particularly with more successes expected to be replicated in Niger. Other than Guyana at the moment where else has such a high consistency for material drilling success and a 2.8 billion bl already risked (4 billion unrisked) mid case recoverable figure.