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There are periods between invoicing and payment received as a matter of course anyway, and I guess that's a 'fluid' period at the best of times in Nigeria... and - very ?- likely there are some cumulative arrears in certain situations from well back anyway.
My guess is along the lines of lumpy payments every now and again are received to pay some portion of the overall o/s bills.. some maybe large pay down others smaller depending on differing circumstances at a given time.
So, including Co-Vid and collapse of O&G prices generally, I'd be stunned if they're being paid fully/near fully in the short term for gas/extra gas being supplied in April and May for eg.... more like the - further - accumulating total bills will be paid down by irregular increment over time.
So AK may be waiting until he's had some - hopefully chunky - o/s incremental payments banked before giving a big picture update of amounts owning versus paid. and/or towards deciding when he must escalate to the powers that be towards achieving agreement to evoke some/all of the guarantees in as optimal a way as possible around the concerns/needs of all interested parties. ( the latter taking time to agree and might include the powers that be pushing debtors to pay SAVP another chunk now/soon etc..)
Brent Oil was last at $27-$28 barrel in Jan 2016. Savp pressed on by acquiring 2 additional blocks in Niger so obviously a low price didn't hinder longer terms outlooks so i would think this period will be similar. Will take time for all the cuts to right the deman picture over time.
I beleive oil will return to circa $50+/b over the next 12-18 months and that must be something that any farminee takes onboard. Goldman on the back of the cuts have also estimated that price range/timescale. Never guaranteed, but severe cuts have begun, expensive production will dry up some and some balance will return just as it did in 2008, and 2015-16.
I would expect Niger to still be on the cards as it's production is still someway down the road. China still needs to get their oil out so i beleive its still an attractive farm out option for those companies that are looking ahead and not just at the here and now. In addition it's a strategic stream of revenue for the countrys government to capture so they need this even if not as lucrative as before. Hopefully costs will be trimmed, renegotiated in such an environment. Delays to activity/farmout more than possible/likely is my expectation. Niger government still needs critical oil investment so perhaps extensions in ongoing negotitaion. Last we heard was that Niger was setting up some kind of national entity for oil so need partners who might be in short supply so i would logically think, need us as much as ever as there are only 3-4 players max.
Whatever the hold up for an update remains to be seen and i certainly would have loved to have gotten a comprehensive update by now. Any negotiations might now be hampered to some degree by lock-ins/movement etc including refinancing.
For Nigeria, If they were not getting paid for their gas and any guarantee had to be called upon for payment, I would have thought that would be a material event and definitely needing an RNS. As for payment terms/time to settle that's something we don't know if it's taking x amount of months but i would have thought even if there was a rolling back log of overdue payments say for 4-6 months always outstanding, we could still be being paid monthly while always being 4-6 months behind - something i honestly don't know but maybe these are acceptable credit terms if thats what AK meant in stabilising the business going forward from the transaction completion ? Also there was to be some gas well drilling and workover activity.
The results may come anytime. Last year was later as they went to late May. Maybe this gives them time to add some material news. Other than that, nothing more i can add until they englighten us.
Paul, i posted this on ad v f n today in reference to an earlier post of mine re demand/supply expectations.
'The IEA have just released their demand for 2020 - Expects demand to be down 9m bopd for the year - which for the year is around 3.285 billion bls drop against 100m bls/day (36.5 billion for the year). Their graph shows the biggest months for loss are March when the lock downs mostly kicked in mid to late of that month, April, May, June as i was expecting.
It shows the balancing effect i mentioned in my post 1578 of 3rd April for my expectation then and why the cuts wouldn't immediately match the deficit but rather balance it over time and not too dissimilar to todays update - graph here = https://twitter.com/IEABirol/status/1250333302268940289
Also SA expects IEA to announce 200 mmbls of oil buying over next 2 months which is about 3m+ bopd in another cut (see Energy Intel).
In addition Texas Railroad commission vote yesterday will be announced by 21st April re voluntary cuts or not.
=========================================================================
ZENGAS - 03 Apr 2020 - 12:01:18 - 1578 of 1799 PetroTal - Growing oil production - PTAL
Maybe some countries can add further to strategic reserves.
Maybe in real terms the cut doesn't have to be as severe if that happens.
Consumption could be down 20-25m day against 100m demand.
If consumption is down this much for 4 months that's about 2.5 billion bls lost demand.
If demand is down 4m/day average for another 8 months that's 1 billion bls lost.
In total that's maybe 3.5 billion bls/yr they might need to balance in supply cuts or just under 10m bopd.
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In summary Paul in your opinion do you consider SAVP is worth a gamble at the current SP? It looks like they are still being paid although I would have preferred the tweet to say paid in full. That was my main worry aside from further falls in the market in general.
This market is all about surviving a few months of possibly very low oil prices and/or maybe $30 - $35 for rest of year.
Demand destruction has been phenomenal but at current oil prices, supply is going to fall off a cliff. The calculation is OPEC/G20 have slowed the rate of fill of storage capacity but everything hinges on demand slowly recovering at same time as supply destruction begins to kick in. Needs to balance before we hit full capacity. I suspect further cuts will be required. Important to remember that actual price achievable is at a very significant price to the dated price on our screens. And in certain locations where storage near capacity the price could be sub $10.
The great thing about SAVP is that revenues mainly gas so we just need to get paid! Or be reassured that World Bank Guarantee still our safety net. It’s possible that Nigeria will benefit from G7/IMF debt relief and SAVP waiting on this.
I would appreciate any views on what to expect with the results and the chances of them being better than market expectations. Even if they were the impact on the sp would be likely to be muted for obvious reasons. However if the results RNS confirms we are being paid in full for gas, includes increased sales, includes some positive information on Niger perhaps we might see the low teens. As I have previously stated expect there is a serious risk the market might drop back as the full impacts become clear but the good news is that my record of being g wrong is second to none.
Not sure why it takes 5 months to prepare and audit accounts for such a relatively small company ?
Blame it all on Covid19.
Knott already knows there won’t be a face to face AGM. The best anyone pcan hope for is a live video conference.
What an absolutely disgraceful way to behave towards the non institutional shareholders.
Buffy
Will an update precede or follow results ? PC i agree with your sentiments a reassuring update would do more good than harm at this stage.
Thanks Longshort
SAVP the only share I own that has not provided a COVID update. So why no update, if only to say the lights are still on! I still suspect they are suffering significant arrears on gas payments. However Jimmy Lea implying not an issue.
Very odd, if waiting on a good news update (eg Niger CPR or more gas sale contracts) announce reassuring Covid update now (ie SAVP not in distress) and then the good news a few days later. Then we get two bounces.
Directors are losing a great deal of PI goodwill. Anyone know which directors, if any, seeking re-election at next AGM? Finals out end of next month.
Thanks for sharing longshorttrade. You've got to admit it's a p**s poor way for the company to update PIs' though. It's hard to fathom out what the company is up to/how it's performing etc. Surely we should have had some sort of update by now in view of these 'unique' times?!
If it hadn't been for NEX, CINE and AA, my portfolio (thanks to SAVP) would be on the floor. It's hard to know why there's been so little news from the company and my 'trust' in the BoD is wafer thin. The sooner we get an update the better then I can review whether to stick or twist. I can't dress this one up, it's been my biggest 'shocker' (loser) for years. C'mon SAVP tell us the state of play via an official RNS!
So if payments are being received, to add on higher production, what would be delaying the update?
Q1 final figures?
Niger CPR?
Farmout?
Additional Nigeria gas assets?
Existing and new iis being allowed to buy sub 10p?
After numerous emails to SAVP my latest email was forwarded to Jimmy Lea at Celicourt, below is his response.
Thank you for the below. To confirm, the Company plans to provide an update to the market in the near term. Sadly, we cannot go into specifics on timing, but if you are signed up to the news alerts on the website you will be notified when it is published.
On your point around the payment situation in Nigeria – Savannah continues to receive payments for its gas production in-country.
Best,
Jimmy
Jimmy Lea
Director
Be nice to get an actual formal Update!
Savannah has been a very dependable source of gas supply in Nigeria during the COVID-19 crisis. We have stepped up production to help ensure a reliable supply of gas is available for power generation during the country’s lockdown. #SAVP #COVID19 #EmployeeWelfare
Done deal boys, how much effect do you think this will have on SAVP considering we have still heard nothing from the company?
Too early to say. Everyone can see the storage precipice and common sense /mutual self interest should mean they avoid it.
G20 need to join the party, should be today. Hopefully everyone done the maths correctly
Hope all is having a relatively relaxing time considering.
Does anyone know the gas payment term here? Quarterly in arrears? So end of 2019 was just being invoiced and maybe payable in a month or even three months? Hope it’s not too thick a question to ask :)!
In a way why should opec cut production if trump doesn’t. If cut the whole world should cut.
The general consensus of opinion seems to be that the level of cuts is not deep enough to make much difference and the oil price will not rise much if at all. I must admit to being conflicted between wanting to buy back in and fear of the market taking another dive. At the moment I am being cautious. Also I want to here official confirmation that we are being paid with no need to invoke world bank guarantees should not be too much to ask. As for Niger well the market cap did not include anything for Niger before the crash.
Oil price might rise but will we? Too many question marks here. Dreadful management.
Anyhow happy Easter. Switch off for the long weekend. Enjoy the sun in your back garden.
careful! ;)
a non s/p down day if they cut big, perhaps
( towards hedging my bets and including flat on the day I went for above instead of 's/p up day' :-) )
meeting starts at 3pm today , so i guess we will know very soon . analyst's are hopeful of a deal , also incorporating USA who could cut production also .
i really thinks its the time to buy here , maybe which an RNS pending after easter holidays ... could be a double boost for SP