Member Info for cautionyourblast

ZENGAS, thanks for posting re CEO sedition: I whole-heartedly agree with you.

I've been surprised by the extent of "AK must go" posts, tbh.

While I'm here, I may as well mention that the Nigeria Accugas CPF enhancements and likely resulting revenue increase pushes a very large operating margin through which should have a significant impact on bottom line.

For the record, I don't think SS will be closed for Savannah. I'd still back management, if that were to be the case. But a strategic review (led by David Clarkson and Joe Pagop) might be necessary at that point (as I mentioned some days ago).

Https://x.com/PatrickHeinisc1/status/1821872070575198428

https://x.com/PatrickHeinisc1/status/1821998080935276805

Https://x.com/SudansPost/status/1821777724328771992

Wiselyinactive and StreetsOfGold: both really insightful posts (I agree, kinkell!) You've educated me on where this might now be heading: thank you.

It's clearly endgame. The SS government has had internal disagreement on the way forward with this deal for months, I think. SS stands now (assuming Petronas packs its bags) with significant interest in the fields and a responsibility for ongoing capex and opex. SS has said that it doesn't currently have the expertise to operate and it may not have the money to either. One imagines that many of the Malaysian personnel on the ground will be looking forward to returning home. The Chinese and Indians (who apparently don't want to re-up) will be watching closely. Savannah will have spent considerable time and some money understanding the detail in order to be prepared to take over: they'll know the risks. A fourth party could step in, but surely this would already have happened: they then have to get on top of the assets; and any irregular cash transfers to SS or other parties will be highly scrutinised. Whether the deal is indeed attractive or not clearly depends on price and risk: given the situation on the ground, perhaps there are no other interested parties.

Savannah is unlikely to be paying SS 100% up-front for the asset if a deal may still be done: more likely, SS would be an upfront portion paid in profit contribution over the early months/years, I imagine.

All this assumes a deal may still be done. Sure, it's more remote than if Savannah were buying from Petronas (which, as advertised in the lawyerly RNS, may come back). But it's not dead.

Oh, and WB, IMF, 2024 elections, peace talks...

Endgame.

Like most people, I'm assuming a South Sudan deal does not now go ahead.

If this is the outcome, then some difficult questions will need to be asked and answered, promptly.

The first thing that must happen is an assessment by the BoD of the current strategy and whether it needs amending, continuing or scrapping. If the latter, what is the replacement?

David Clarkson and Joseph Pagop would need to lead on such a review, imo. Only once this is concluded, does it make sense to consider board changes, if any. I do not support calls for Andrew Knott to resign or be dismissed, despite the long-term frustration faced by many shareholders. I do not believe that most of the instits would support it at this stage, either.

I will continue to sleep well holding this share as Nigeria, despite challenges, is developing well. And I believe that Chad-Cameroon will be settled in Savannah's favour with the worst-case settlement providing a bulwark to the suspension price (although some pain may be had before the Parisians decide the outcome).

Be careful for what you wish...

At least it'll be relisted in the next few weeks. The discussion with the SS government is going to be "deal or no deal". I think it's highly remote that Savannah secures these assets now.

Well the price will go up from what Savannah would've paid to Petronas, that's for sure. The Malaysians obviously realised the consideration receivable was trivial and so just handed back the keys. Perhaps Savannah still picks this up, just not for a song. Or maybe the SS government decides to run it alongside the Indians and Chinese.

No huge surprise, given the protracted "negotiations".

Oh well, whatever, never mind.

Https://www.tradingview.com/news/reuters.com,2024:newsml_TUC8Q3CXT:0-savannah-energy-terminates-deal-to-acquire-petronas-south-sudan-assets/

Https://x.com/AimHardy/status/1646562683645198339

I hadn't seen these when they were originally posted....perhaps by one of you!

They make quite thought-provoking reading.

Thanks, Streets. I was typing as you were posting...

1. The company isn't going to give much away whilst this thing is up in the air: management doesn't want to jeopardise anything.

2. My understanding is that this is taking as long as is typical for these types of deals in the more difficult nations. This is based on posts from other clever people on this board.

3. It won't be anywhere near 1,250usd consideration given the effluxion of time. That said, we may have to close our collective eyes and step in for just two years with no guarantee of continuity beyond 2026: this is Africa. Personally, I feel the extensions will happen for all consortium members: the South Sudanese have said publicly that they don't currently have the expertise to operate.

4. The company will feel it gave more than enough update on ops at the recent AGM (despite the hopeless remote comms issues for the second year in a row).

5. Nigeria is looking more positive given compression project and more gas demand from existing customers.

6. (Come on baby) don't fear the Naira. Fx issues being resolved.

7. Niger. Well not much seems to have happened re oil, but wind is progressing, apparently. I'd like to see some renewables maths, though. We shall see...

8. The ICC won't be deliberating forever: back-end 2025 judgement. The CC claim that AK discusses in his CEO statement in the glossy is easily more than double the market cap. Then there's interest too. On CC, we could compare with the North Sea where assets have effectively been expropriated by idiot socialist MPs (of all parties).

It's frustrating, yes. But, come on everyone, look where we're operating.

I think market cap is probably supported without SS. My DCF model might disagree with that statement though.

SS a coin toss for me given level of info available.

Tick tock...

I suspect three issues are driving the timetable here:

1. The Kenyan peace talks;

2. The proposed Dec 22nd elections; and

3. The 2027 expiry of existing concessions.

If this deal hasn't happened by November and the elections don't get pushed back, then we're looking at 2025, or never.

All guesswork from me.

...of a South Sudanese update, here's a super background piece on Nigerian oil from NJ Ayuk on X (where I go to avoid getting lied to by the MSM).

https://x.com/nj_ayuk/status/1817923067370254692

...a procrastinatory South Sudanese RNS tomorrow.

I'm not complaining about it, though. If this stuff were easy, it would not be available in the first place.

Https://x.com/SouthSudanGov/status/1815831631564886421

I hope g2g talked g2b...

Https://x.com/PatrickHeinisc1/status/1815748835240468946

Https://x.com/energy_african/status/1815451714864161110

🧐🤨

Agree all. My post of 20 June says pretty much the same thing.

Fair value: low forties.

Worth a punt: under 40 pence.

Take a look at the Naira exposure in USD at the start of 2024 compared with the year before (segmental reporting). Then look at spot Naira on the same dates and spot Naira now in the context of the 2023 fx loss. Then consider Andrew's comments at the AGM concerning the TF having started in January and likely being completed at year-end or shortly after. Then look at the Calabar true-up mechanism. Then add in the Naira received for invoices in 2024.

Thinking about this with a calculator in front of me gets me to a far-more-modest fx loss for 2024 than that suffered in 2023. And the issue largely going away in 2025.

Don't worry about the Naira.

Https://x.com/Savannah_Energy/status/1811385672894132446