Member Info for cautionyourblast

Good points, scotpak.

And I'll add another: the fact that the Company RNSed in March that Standard Bank are expected to in part fund the acquisition of the remainder of Stubb Creek suggests that banking relationships remain healthy and covenants manageable. This is seldom discussed here, but extremely important.

Best wishes, everyone...

Well that'd be good, Trust! Thanks for all your continued good posts here.

I'm not sure that AIM got around to providing a new cancellation date to the Company, since none was published in this morning's RNS.

"Four weeks" takes us conveniently to 14 June. 14 June is 14 days before 28 June, the last business day in H1. Companies must provide 14 days notice of the AGM (together with relevant docs, including the financials). That would take us to 28 June. So we can now see why 17 May was chosen in April as the next "deadline".

The 14 June update should be the financials AND a proper ytd update to include Nigeria, Niger, renewables, fx, debt. After all, we're an "AND" company...

Https://twitter.com/PatrickHeinisc1/status/1790857533504065792

Https://m.youtube.com/watch?v=ctbNdrSCWt4&pp=ygUSWmVpaGFuIHdlc3QgYWZyaWNh

*them, not *then. I didn't thoroughly check my work. NVG (not very good).

You're generously giving then the benefit of the doubt, Trust.

They should not go live with a site that has circular and incorrect links. I think they've failed to thoroughly check it.

I agree, Tier: that's poor.

And it's not the only one. At the foot of the Investment Case page, there's a button entitled "Read more about our strategy". When you click it, it just takes you back to the top of the page.

I would like to see some personnel changes.

...an RNS this week setting out a revised cancellation date. The 5 April RNS doesn't do this, so an extension date needs to be published.

Whilst I'm here, I agree with scotpak's sound assessment on the somewhat shrill Chad government statement. It's interesting that Chad seems to be

(unjustifiably) painting Exxon as a bad guy as well as Savannah. All that matters is the final settlement which should be about a year away. The Chadians either nicked the asset from us or from Exxon. Worst case is we get our Exxon debt extinguished, I think. But I think we'll do better than that. Injunctive action on cargoes post-ruling...

Finally, Andrew can diffuse the AGM by going through country-by-country setting out what he can and stating clearly when he cannot (for reasons of legal confidentiality or commercial sensitivity). I expect the financials to be extremely ugly. However, with the untaken Nigerian gas and unreleased Cameroonian dividends, deferred revenue (whether Cameroon is recognised on balance sheet or disclosed in the Country Review section) might approach half a billion dollars. Crikey.

TrustILie wins the Olympic gold medal in squirrelling out Savannah info and generously sharing it.

I'm very grateful and I doubt I'm the only one. 🙏

Interesting biog...

"Savannah Energy

 Sponsor

Savannah Energy PLC is a British independent energy company focused around the delivery of Projects that Matter in Africa. We want to meaningfully contribute to the economic development of the countries in which we operate through the development of businesses and projects that make a material difference to those countries. We are pursuing growth opportunities in both hydrocarbon and renewable energy.

Savannah aims to deliver utility scale renewable energy projects across Africa and generate clean, competitively priced electricity for millions of households. We are involved across the entire project life cycle, taking projects from greenfield development through to long term ownership and operation. We currently have up to 696 MW of hydroelectric, solar, and wind projects in Niger, Cameroon, and across the Sahel, and are targeting to have up to 1 GW of projects in motion by the end of 2024 across Africa.

Savannah’s existing presence in sub-Saharan Africa through our hydrocarbon operations means we are able to leverage local teams to accelerate our renewable energy business. We are focused on ensuring the highest environmental, social and governance standards to ensure a positive legacy from our projects."

Thanks, trust

Good to see Savannah sponsoring again.

I'd expect the AGM the same week. If Andrew Knott is in BCN for some of 25-28 June (28 June being a Friday), then the AGM can easily be arranged around this to get the accounts approved by month-end. He has zero excuse not to rock up at Bank Street for the AGM (except for a deal execution, of course).

Brilliant innovative idea, Streets. Everyone would win with this approach.

At this stage, I have no clue what it takes to unlock South Sudan, Niger or the Accugas restructuring. Still, at least everything else is crystal clear...

Haha, I share your frustration, Tier. I'll be going for a swim, having a run and getting frustrated at what a completely rubbish guitarist I am. I'll also be planning what to do with my Savannah millions, a second passport being the first purchase.

It may be that they have to stick out an RNS as 17 May approaches simply to say what new extension date has been granted to the Company by the nomad and exchange.

All the best,

A couple of follow ups:

Re point number 4 on Cameroon, I think I was incorrect: on reflection, I expect the cash won't be booked, but rather a receivable (booked against the liability of deferred revenue that I mentioned before). At least, that's my hope.

The other thing well worth looking out for is a mention of the metrics associated with gross and net debt and any related comments on bank covenants.

Title should, of course, read FY23 financials.

Muppet.

4. Cameroonian income

I seem to recall (from all that Lower Manhattan Court filing stuff) that cash from Cameroonian midstream revenue is accumulating in a branch account of Citibank NA in Libreville, pending distribution after the arbitral proceedings are concluded (expected mid-2025). It will be very interesting indeed to see how the Company accounts for this. I assume they cannot recognise the revenue but (hopefully clearly!) this is a Savannah Asset. So I suspect we have another category of Contract Liabilities in lieu of revenue and that we recognise the cash in the balance sheet (our proportion of what is held in the Libreville bank accounts). The CL then gets released to P&L on successful completion of the arbitration. Clearly, if the arbitration goes against us (unlikely, I think) then we just unwind the balance sheet gross-up: no P&L impact, again it’s conservative. Of course, the Company may be directed by the auditors to recognise nothing at all and flag that this is without prejudice to the arbitral proceedings.

This begs another question concerning the Exxon debt facility which was originally attributed to the expropriated Chadian assets but was amended in early 2023 (“Following the Nationalisation [Chad], the terms of this facility were amended in 2023.” Note 30, page 169) and included in the FY22 segmental reporting under the Cameroonian business at USD162m. How is that now being serviced or is interest simply rolling up on it?

5. Revenue growth

The encouraging addition of customers in 2022 in Nigeria should begin to have a positive impact on revenue in the 2023 accounts. Too many moving parts to assess the impact but I am cautiously optimistic about this.

6. Transaction fees

These might be rather large given all that is going on. I wonder if they will be separately disclosed.

7. Audit opinion

This is in the FY22 report (page 87): “With respect to the opinion of the Group’s external auditors we do not anticipate that there will be any disclaimer opinion required for 2023 - this has only arisen for 2022 due to the specific and exceptional set of circumstances discussed above.” Let’s hope this holds true.

I’d expect a reported FY23 loss of around USD150m (admittedly, a guess). This belies the great asset base and contingent asset base of the company. I remain as positive on future prospects and I am highly critical of Company engagement with its equity providers.

Here's to some good news and a recommencement of trading soon.

Given the lack of investor engagement, the last meaningful update having been the 29 September interims, I thought I’d flag some key issues to look out for in the FY23 numbers. I am deliberately not commenting here on SS, CC, Niger, renewables: we’ve collectively discussed all those at length. Rather, I wanted to refocus on the financial aspects of the business. I am really hoping some of you will add to this and give your perspective on it.

A detailed update on the entire liability side of the balance sheet is clearly needed and I hope Nick Beattie will discuss matters up to the reporting date, rather than just to the balance sheet date.

Foreign exchange losses

USDNGN started the year at about 450 and ended it at 900-ish.

The reported net exposure in NGN at 31 December 2022 was USD177m (note 35(d) to the financial statements). Obviously payments in NGN in lieu of USD for FY23 will have been made across the board: these should amount to an invoiced dollar equivalent of USD300m or so for the year, perhaps a little more.

I’m envisaging unrealised FX losses for the year in the region of USD80-100m for the year (USD54m was reported for the first half when NGN finished at about 760). If unrealised losses were reported to current date now that USDNGN is around 1,380, I’d expect cumulative unrealised losses of up to USD150m-ish. These are guesses.

This is clearly a significant issue.

2. Debt service burden.

From page 90 of the FY22 financials: “The average interest rate on debt for the Group was 12.0% (2021: 10.2%), due to higher US LIBOR rates in 2022.”

Financing costs were USD79m in FY22 (page 88).

I’d guess the blended rate was perhaps 2.5% higher on average for 2023: so 14.5%. Given we still don’t seem to be able to swing our NGN into USD (see my note on FX losses above) the interest burden is likely to be a bit higher, I guess in the region of USD100m. Until we can switch our USD revenue, paid in NGN, for USD and apply it to the debt, the interest burden will remain a significant drag.

3. TOP contract impact on financials

Contract Liabilities for FY21 were USD213m, for FY22 USD314m (see note 32, page 170). It’s hard to know whether our customers will have begun to take the as-yet-untaken-but-paid-for gas or whether they will have continued to pay for contractual obligations in FY23 and continued to leave the gas in the ground. I’d hazard a guess that Contractual Liabilities will go up again for FY23, given Nigeria’s volatile year. It will be interesting to see what comment the Company offers on the commercial impact here if this is the case. The accounting treatment adopted is conservative anyway (we aren’t recognising profit on gas left in the ground but already paid for).

Apologies to you, RockyRide: I wrote RockyRoad in my note below.

I also left out the need for a detailed update on the entire liability side of the balance sheet. Step up, Nick, please.

I fully concur on IR: I feel more knowledgeable than they are, tbh.

AGM might end up like the Smithfield Market scene out of The Long Good Friday; or an old Eurotunnel AGM. Sadly, I won't be there in person.

2/2

The current level of engagement is woeful. Management need to respect shareholders if they want their support.

Ends.