Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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buck off you bucking buck rogers, telegraphist :-)
(it generally feels to me like the keys to the asylum are in the hands of the lunatics in the AIM O&G space :-))
NicetoMichu - that's not how AIM O&G works ;)
Another great post Zengas. Thanks ( plenty of other top posters here too, thanks to you all)
On paper this co. looks great. There is seemingly so little faith/ trust left generally though that great reported audited financial accounts seem required these days to really move s/p's up.
(and indeed share buybacks/divs. got to be tried more when doable too... PS; if one more person says back to me that's not how AIM O&G works... they'll get an expletive laden reply back :-) And, AIM O&G Chairmen/CEO's really need to wake up to defending their s/p's ..or else they can easily go much lower again, sadly.. take president (ppc.l) as an eg of a brutal s/p melt down.. Mr President, Peter Levine, angrily complains the s/p is completely and utterly detached from reality of the business worth ...blah, blah.. well put a few million into a share buyback at a premium to current 'joke' s/p then instead of spending many, many, many millions on increasing output by maybe 10% , spend many, many on that and the other many on a punchy share buyback scheme...because the other way sure as hell isn't working.. and even with him having huge skin in the game and getting smashed most he's still slow to wake up to something else needing doing.. I say, get some of your very approx. 50m gbp recent paper s/p decline loss back via share buyback scheme asap Peter please: learning for Mr Knott here too maybe?
In arriving at the cashflow generation, the CPR has given the oil price assumptions as
$59.30 - 2020.
$57.40 - 2021.
$56.90 - 2022.
$57.10 - 2023.
$57.70 - 2024.
Like before in past cycles i expect more efficiences and cost savings will be made in any changing environment ie rig costs, service companies etc as everyone competes for business and in turn have to shave/reduce their costs. That goes for pipeline tarriff costs too.
As for Niger, if they can find it for anything around a dollar per barrel and sell it for $4+/b (AK said $6 in the latest Vox podcast), there's a lot of money to be made from toting up reserve numbers and selling on.
As for Nigeria and even with the debottlenecking in the year after next, we should be around 2,500 bopd net. The bulk of the cashflows are coming fom gas and 2 of the contracts are escalatory with Calabar alone growing by 43% in price over 4 years so cashflow should increase rather than be impacted by the smaller percentage from oil production.
In addition higher margin gas customers switching from diesel and new power station/industrial clients should ramp up cash flow even higher.
On that basis i'm not worried about where the oil price trends as i expect Savp will make more from selling siszeable reserves onto a bigger company while going through the motions of building initial production.
all your points made seem fair enough to me Kalan..
even an interim trade Deal between US and China in 2020 would be great and would of course help global economy and Poo..
my big concern for poo is supply side far more than demand side though, and there's a Shale output rise, even after another record year in 2019, in q1 2020 especially, hence why OPEC and friends went for the deeper cut and that for 3 months and then see the lie of the land etc.. without their strong action poo brent in q1 could easily have gone towards $55 imho (and EiA's opinion too ) While I very much hope not, I'm still guessing that poo brent will come in decently lower on average in 2020 versus 2019's approx. $65/$66 .. and don't forget 2019 was down from approx $70 average in 2018. ( And why wouldn't Institutional fund managers be mass bearish this sector for 2019 and 2020 if POO goes down year on year )
Granted gas is a big thing for SAVP too and the local market for savp output enjoys higher prices than average for O&G because of it monopolised supplier nature .. another reason why I like this better than many other O&g'ers
Agree on Malcy Michu - he isn't that good at getting the wheat from the chaff. he wouldn't be touting shares for a living if he was. What he does have is experience and a lot of knowledge - so when oil shares are rising he looks great and can be of great benefit by making us aware of the opportunities we would otherwise have missed.
I owned VOG and sold at 80p+ and then bought back at 50p and sold above 60p on the re-trace and bounce. Malcy had been on a site visit at the time I was selling and was glowing about the company achievements but little on the finances. Fortunately I did my own calculations and decided the company simply couldn't become profitable. The shares now trade around 6p to 8p, well they did last time I looked.
Look at his reports and use his information, especially in a rising market, but have a pinch of salt handy. His target of 75p looks reasonable to me and may be exceeded but a target isn't a valuation. 35p before Niger drilling re-commences would do me fine. Thereafter drill success, oil to market and more customers on higher margins and 75p will be a breeze lol.
As for oil prices - trust in Trump - he needs a trade deal and a boom to get re-elected - he is manufacturing it in every tweet. the FED are dancing to his tune all the while. Awful President - great manipulator. Cause the crisis - solve the crisis - take the thanks of a grateful nation.
Very thankful for todays clarity on how good an acquisition this is.
For this s/p to be at 22p/23p still based on all this is frightening/horrible. But am I surprised, no; saddened yes and but not surprised. But I still have high - for me - hopes here and would be very pleased indeed for this to reach 40p in 2020 (and pleased with 35p and not unhappy with 30p)
I like Malcay and did well by his tips in 2016 and 2017 but have long since stopped following/ listening to him. Like many - and me to an extent but less so as we go - he is living in the past in term of the valuations metrics he uses and end valuations he anticipates for all the O&g'ers he covers imho, sadly. Nett of this, his predictions have been awful in the last two years now. ( believe me each breath of mine would love the old paradigm versus this brutal new one.. and of course the paradigm could change better back, at least somewhat in the future, but it may not, and it could worsen further eg global recession/stock market crash etc scenario )
The Nigerian CPR from CGG and a Nigeria operational and trading update this morning which show what very high quality assets that have been bought and with incredibly robust numbers. The CPR confirms gross and net 2P reserves of 99.6 mmboe and 71m mmboe respectively and 2C gross and net resources of 98 mmboe and 58.6 mmboe. The Nigeria assets have a gross NPV 10 of $1.2bn gross, $957m net to SAVP.
Net free cash flow generation by the Nigerian assets assessed by CGG are as an average of $130m p.a. (20-23) with gross 2019 ytd production of 17.3 kboepd up 33% y/y. 2019 guidance for cash collection from the Nigerian assets is c.$190m leading to a $40m reduction in debt 2019/2018 in total third-party debt outstanding at the Nigerian Assets and a forecast YE’19 cash position within the Nigerian Assets of a minimum of US$15m. Finally, forecast 2020 capital expenditure at the Nigerian Assets of c.$41.5m proves the cash flow more than covers expenditure where production costs have been cut sharply.
There is no doubt that, although taking longer to complete the paperwork, SAVP have got a gem of an acquisition here making it a ‘proper company’ with substantial cash flows from a high quality asset base. As CEO Andrew Knott says ‘We continue to view these assets as a strong platform from which we will deliver further growth. In this regard, we continue to make good progress in relation to the supply of gas to potential new customers, and are investing in additional well stock to ensure anticipated future production levels are capable of being met. I look forward to providing further updates on this in the near-term.’
Make no mistake this is a very reassuring update, the CPR numbers are very much in line with expectations and the confirmation of the excellent cash flow generation puts paid to any lingering concerns in the market about the performance of the Nigerian assets. Accordingly I remain convinced that my 75p a share target for SAVP is easily achievable, indeed a starting point for what is a very good company indeed.