The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
I haven't sold a single share, seplat to be debt free by the end of this year, I forecast zero debt associated with the mpnu acquisition, and be producing over 100k barrels of oil by sometime next year. $700mln-$1bln in free cash next year is my estimate depending on how fast they can raise production, I wouldn't even consider selling below 350p.
The rumours about seplat getting 30% instead of 40% of the asset have been there for over a year, it's more likely than not that'll be the outcome. I've heard the rumours along the way and this deal could have gotten done a long time ago but the CEO and old chairman almost messed everything up by originally rejecting the compromise hence all the cases against the ceo and why the old chairman was forced to resign, only for them to backtrack apologise and accept. The deal is done anyway, exxon have already moved out of their offices in lagos and seplat have operational control of the company I hear.
Just a reminder that this asset was producing over 200k barrels a day (with plans for further expansion) before politics and policy uncertainty led to exxon stopping further investment and letting it wind down to where we are today. This is just the beginning.
"I get $1.7b already in the lockbox since Jan2021"
That's closer to the number I have, those saying $800m I think are quoting the "capital access" research firm who it looks like didn't account for depreciation, amortization and impairment; they had mpnu doing $387m in free cashflow on $4.5 billion in revenue in 2022 which makes no sense whatsoever.
I heard rumours that it could have gotten done early last year but management screwed up and refused a compromise deal that was offered which just so happens to be on the same the terms that rumours say they've now accepted. The deal is that seplat will obtain 75% instead of 100% of mpnu and nnpc will get the other 25%, we'll see if this is true.
Https://punchng.com/tinubu-committed-to-conclusion-of-seplat-exxonmobil-deal-lokpobiri/
Seems to be a common theme with seplat giving incredibly unrealistic timelines for when projects will be finished, they did this with the aep pipeline as well which was constantly delayed and came in 2 years behind schedule. The nnpc urging contractors to finish by december means if we're lucky it'll be completed q2 next year, there's zero chance they complete it by the end of the year. Then there is months more for commissioning, teething problems etc. I foresee little to no revenue from anoh for all of 2024, this is a 2025 story.
they are covering their **** backtracking and groveling because the person who owns oando is the current presidents nephew. the nnpc has no consistent policy around acquisitions and seplat is in a totally different situation as they're not linked to any powerful insiders as far as i know.