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Nigeria versus Niger
It strikes me that it's not possible to have too much knowledge when it comes to understanding Nigerian operations and its risks. There's tons of information available about the Nigerian power sector.
Despite it being a changing landscape, I'm pretty well up to speed in things relating to the Nigerian power plant sector payments and lack of liquidity in the sector. Savannah have navigated these issues successfully during 2019 not least because of the partial risk guarantee, which has worked well. Despite this big win in the power sector, it would be excellent news now to sign up a couple of new industrial customers; not only to diversify from a dependence on its power plant customers Calabar and Ibom, but also because of the high sales prices into the Calabar industrial zone.
So there's no need to rely on a company RNS to get a handle on how things are for the Accugas business currently and how it should pan out going forward into 2020.
By contrast in Niger there's too little information that I can see.
I don't want to hear another wish list of timescales and milestones for Niger, but that actual operational progress has occurred. I can't find facts to say that anything has been achieved in the past few months.
Is there still a farmout process for the PSC's in Niger ongoing at present or has it stalled?
I'd say that currently too little is known about current operations in Niger and an update is well overdue. Will the AGM at the end of June come and go without any operational news on Niger?
Don’t get it, I just added 50k at 13p went to add again another 50k as couldn’t get 100k and now it’s NT. I mean ffs they either have an overhang or they don’t what is going on with his stock!
Trek
I think it's fair to say that something like 70%+ of Savp's decline since November can be put down to a sector wide slump in sentiment and net money being taken out. A global economic slowdown was already happening, thanks to the Trump/China trade war spat, so this Covid-19 thing is merely compounding global economic difficulties, probably forcing an outright global recession. It doesn't take a genius to figure out the direction of oil prices under that scenario.
There are a few O&G companies trading in AIM that have excellent long term fundamentals, but which cannot hold it in the near term against a shaky macro background. That is essentially what NTMU is saying. Zengas is looking it across the valley to the other side, when global activity stabilises once more, and starts to recover, and with it oil prices and sentiment towards all resource sector businesses. That's the dilemma facing LTHs here now. Whether to desert a sinking ship because the weather is decidedly dangerous, or to wait for the rescue boat to draw alongside and pull her to calmer waters, eventually. Decisions, decisions.
Not a response to Zen btw .. I can’t come back on that in any detail as I said I wouldn’t ( luck counts amongst others has quoted me similar and I’d cut and paste my response ..)
Towards changing the subject completely : I looked on the Trin board first just now and the first post I see is :
‘I hope u get the corona to finish u off u fxxxer
At least we’re not at that level here ...yet
( there’s some wider context to that that makes it not as bad as it sounds, in fairness .. perverse humour even )
(That’s a bottom line profitable, significant cash flow generative no debt large cash balance in bank well run company that’s s/p is on its knees too.. what’s happening to a fair few decent companies share prices across this sector is truely horrendous .. ppc ditto .. and others ditto ..so don’t feel theres a monopoly on the misery by being in Savp.. far from)
NTMU "12.5p to 200p is one hell of a lot of 'bags', even on AIM ? But this one is special, special, of course."
There's absolutely no logic in that observation. Did the value pool suddendly change or just your perception of 'bags' as to how an investment is guaged. Is an investment down to some kind of enforced bag limit ??
My reasons for being in Savp are plain and simple - extremely high rated chance of success for lots of easy to find oil with or without production in Niger. Already demonstrated with 5 out of 5 discoveries from the off which proves one part of the rationale for me investing in the first place.
The Nigerian gas and oil fields and the Accugas ownership are 2 seperate pieces of value in the chain and not small fry.
EEN was one complete dog before it got it's act together and after much delay/dissapointment/financing, finally took off from its reorganistation at 25p built it's reserves/production and was sold for 750p. (30X).
Heritage sold itself as well as returned cash to shareholders through asset sales (discoveries) for circa £2 billion 2014. (7-8 X)
Cove Energy 12p - 240p (20X) and a £1.2b sale of it's gas discoveries despite no in country industry or infrastructure or production in any shape or form.
Imperial Energy 25p - 1250p (50X) sold for £1.4b and people thought it was undervalued being previously 1800p. Built up large reserves and circa 20k production in under 4 years. Share price regularly dropped 50% or more at times.
GKP listed at 48p in 2004. Later placings at 14p and fell away during the forced selling to 4p in 2008 at one point and came back to over 400p and a £3.4 billion pound valuation before debt restructuring hammered it with all the KRG problems a few years later. (8 - 100 X variation)
One thing they all had in common with Savp was easy to find oil/gas and lots of it. They didn't all have to be producers or have major cashflow. So yes when i see a company with 2.8 billion bls/$10billion+ value with very high chance of success and that being the already risked number for just one asset, and enhanced by having the Nigerian assets, i see the potential for 200p/share ($2.6billion). When the deal was done at 35p i was targetting under a 6 bagger. It makes no difference if that is now a 16 bagger just because its share price is where it is. It's meaningless. Unless there is any untoward information to come, all that asset potential is still there.
''The average price of all the placing is around 38 - 42p for most of the institutions. I still have it as a 5 bagger and 200p ''
I was actually being nice to you originally Zengas in saying 100p+ plus group and not singling out individuals shouts. Above in your latest shout here, I think? The most bullish of all here, I think? Hence the uber-bull terminology.
12.5p to 200p is one hell of a lot of 'bags', even on AIM ? But this one is special, special, of course.
Generally, in the context of this currently being 12.5p surely a morsel of humility is in order from you. But perhaps your excellence in your micro knowledge of the detail here means you're exempt from humility.
Reciprocally, you may not have been in enough AIM O&G'ers as much as I've been in too many? And the key drivers could be far more sundry marco more than micro, heaven forbid...
Whatever the drivers, 12.5 p currently is a long way from what you were expecting around this time, I suggest? So 200p in the future could equally be very wrong etc.. but anything is of course possible, so you might be right too even: a game of chance we play )
Park my Lekoil eg then....Amerisur, on fundamentals, looked one of the best opportunities on AIM, and there were many on that board posting such great fundamental knowledge and financial analytics as you might here...and very bullish that stock too....etc..
(btw: you're perhaps right up there on the all timer bull list in this sector stocks, perhaps, with 15+ bags to come from here in due course folks.)
People are bored already with this back and forth I have no doubt ,as am I... and Chelsea vrs Pool beckons.. so I'm going to stop completely on this trail now.. so feel free to have another reply go at shutting me up, in the knowledge that I'll not respond, this time around, at least :-)
All possible let's hope we get some clarity soon.
That's been in my head if a decent farmout fails Older. One or the other, or a combination ?
What's the alternative to move it on in a timely manner as well as deliver first oil production ? Drilling even 1 well a month from Nigeria cashflow using $48m - $60m would be fairly slow and they even said over a year ago the plan was to have 2-3 rigs drilling and that would be in line with really opening the blocks up. They've got some 50m barrels so worth something in leverage ?
Heaven forbid we're talking about a new equity placing down here, Zengas. Or did I read your post the wrong way - structured debt finance instead?
I can't see that unless they have Niger sorted as funds will be too precious for other things. If basic wells are $4-$5m each plus further seismic, i can't see that happening unless there is a decent farmout. I thought that was one of the reasons they were holding off on paying a dividend for now.
Worst case - To progress Niger in a sizeable drilling campaign and start to move things along, would they raise cash as an alternative, secure loan finance linked to warrants etc - all if a farmout did not materialise ?
Cons = more shares in issue. Pros = retain all of the Niger upside without giving any percentage away.
Starnge we haven't heard on the extension or relinquishment on any of the 4 blocks which makes me think its all part of the farmout process and the formation of a new supposedly national oil co.
Absolutely OAW especially as AK has eluded to it in the past, maybe the advisers have advised against.
Do we have to notify the market before buyback or can we just get a broker to hoover them up on our behalf as and when ?
Totally agree there, longshort. I've mentioned it too. It would be a great way for SAVP to "take out" the willing bondholders' rump equity holdings, and make a strong statement about management's perception of the inherent value of the business vs current market valuation. Why isn't this so obvious to them as it is to us?
I have mentioned this before," if" we do actually have the cash then this would be a fantastic opportunity to do a buyback £5-10 million. Doubt they are but you never know.
The words i said were "If you can't say something sensible, say nothing at all." and that still stands as i don't care less what your response will be re your Uber Bull terminology and snide comments for anyone suggesting 100p+ blaming people for loss of wealth.
The share price may be where it is but at the end of the day the Fund Managers and those that supported this including myself haven't been wrong about backing this in terms of the geology and discoveries subsequently made after we invested so there was much to be bullish about and proved right on that to this point.
If the bondholders selling are putting a dampener on the share price it's not the fault of your so called Uber Bulls ? (wherever you get that terminology from - i don't see any uber bulls, only cautious investors !).
Likewise when the oil price was lower a few years ago, the share price also sank to new lows at the time of sub 23p due to liquidity and i listened to similar comments then, which was then followed by a placing at 38p - so while we are in this present state whose to say what the next newsflow or updates bring in terms of where the s/p might be. To lay blame at the door of 'Uber bulls' as the most dangerous to your wealth is about the stupidest thing i've heard in the circumstances and if you don't like it, that's your problem. Lek isn't Savp and exactly why i'm not in it or any others that don't fit my strategy. As you say you've been in an awful lot of AIM Oilers this past 5 years - maybe that's your problem - too many !
that was my not hotheaded Tier :-)
this is a good board imo too..
a broad church makes for the best boards …
and everyone is entitled to an opinion..
Calm down gents. We’re all understandably a little frustrated and hotheaded at times like this. This is still one of the most balanced boards I’ve seen out there, please keep it that way.
Management time to show us that you’re worth what we’re paying you for.
I've been in an awful lot of AIM Oilers over the last 5 years Zengas and have had that much of such attempted bullying from the likes of you across these bulletin boards for years now that I'm thoroughly bored by it all at this stage; and I write it off as a natural reaction based on fear and arrogance.
Effectivelly all those uber bulls have been extraordinarily wrong for years now.. and it will take one hell of a macro come back in O&G as a sector for most of them to get to even half of their uber bullish original predictions. But, as I'm still far too long AIM O&G I very much hope that you and they get to that even half way to right in the end.
Those blue chip fund managers you refer to have been wrong again and again and again in their stock picks in this sector in that timeframe ..a geographically close eg and a classic is Lekoil ...a long list of the bluest of blue FM's - plenty of who are in here too - with averages at many many many multiples of current sp early on and all seeing this one as 'fundamnetally' a great company in the making.... (I can list you 5 others Oilers with similar top FM's owning large chunks that remain a way way down too... indeed often more so than they currently are in SAVP.)
PS: The next time you tell me to shut up posting my opinion on uber bulls in such cuircumstances as this I'll be less nice in my response
As I started this thread with 'Savp - no move. Gap now closed and no reversal of downtrend!'
I must add that I could not buy the shares I wanted. I had to wait for an order to be filled twice. Yesterday I got 100,000 for 12.76p, today 50,000 for 12.65p. May purchase one more small tranche tomorrow.
As Zengas stated, those Fund manager probably knew more than us PI's when they bought at 100%-200% higher. The gas price is low, but I believe we are not massively affected by low prices. Can anyone confirm this?
BB
Why does it keep going down even on a very blue day ?
I just don’t get what’s going on here. Looking to buy back in but it’s very scary. Something doesn’t add up
going to take a big effort just to get the SP back to a **** 20p! ok if you are buying now for that but most aren't
I'm hoping and praying that the reason for that is the closeness of a farm out deal with a major in Niger.
In the meantime instead of bringing some reassurance the board have gone into hiding!
This is the only share in both my Portfolio and Watchlist that is in the red today, nearly 8 weeks of decline here surely it must turn soon. Appears Low volume, Low Share price and low interest are still the order of the day. Let's hope this is the"low" and we can finally move on.
"and those 100p + shouts seem so so so so so far away at this time.. and reminds me, for the umpteenth time, that it's the uber bulls that are by far the most dangerous to your wealth on AIM"
What's it got to do with being bullish ? What's wrong with being bullish on growth in the gas/electricity sector ?
If AIIM see the potential and invest along with multiple blue chip investors how are you're so called uber bulls dangerous ?
If this is all down to Uber bulls then ever tom, dick and harry investment manager that supported the deal at 35p and with an interim placing at 28p until the deal went through are all wrong.
What about the brokers and those that cover the stocks etc etc.
You're so called Uber bulls aren't to blame for the bond holders selling down or for that matter CV-19 that wiped $1T+ off stocks last week. If you can't say something sensible, say nothing at all.
As far as i can see there's nothing that has diminished the investment case.
I’m still a big believer that we’ve not had a Niger update due to finalising the farm out. The consortium that took out a 60M position a few weeks ago are sitting on a 40% loss but I’m sure they had some close discussions with the company before making that move. AK was clear in his most recent interviews “We are delivering what we said we would and what’s not been delivered is the focus going forward”. The company is priced at 50% discount to what AIIM paid for their part of the seven assets and we have cash on the balance sheet. Current valuation is mind boggling and until I see written reason why it should trade at such a massive discount I’m considering this an opportunity to buy because of the current **** poor share register.