Member Info for happysparrow

Interesting question on further M&A: 10 more prospects to assess have come in recently (4 Malaysis, 4 Vietnam, 2 Australia, if I recall correctly) ; too, a fair few of those they had their eye on may be getting cheaper. Only likely to advance about 10% of these. I would not be surprised if JSE does not make several more acquisitions like this in the next 6 months - expanding and diversifying the potential of their portfolio considerably whist fire-sale is on, paying as little cash up front as possible so that they have many projects to develop as the oil markets improve in 2021/2022.

https://www.businessincameroon.com/energy/2306-10450-cameroon-thermal-energy-production-fell-by-32-6-yoy-in-q1-2020-eneo
https://www.businessincameroon.com/energy/2306-10451-eneo-to-take-delivery-of-a-125kwp-solar-plant-in-lomie

https://www.eneocameroon.cm/index.php/en/eneo-news/actualite-eneo-actu-gouvernance-leadership-management-en/2911-insights-on-the-financial-health-of-cameroon-s-power-system-in-early-2020
The most visible consequence is reflected in the difficulties encountered in the daily supply of fuel to our thermal power plants, leading to load shedding. Since December, the Prime Minister, Head of Government of Cameroon, informed of this situation, has been able to make an appraisal of the major threats looming over the sector. He has instructed the Ministers and Administrations concerned to take the necessary actions to restore the financial balance of the sector in general. These actions include, among other things, the immediate injection of cash and the mobilizing this year of the funds necessary to clear all the debts. We are hopeful that these measures will be implemented as soon as possible to quickly improve the quality of electrical service.....
The unprecedented deterioration of the financial situation of Eneo and, consequently, that of the whole electricity sector in Cameroon in 2019 is explained by the accumulation of unpaid bills by some major consumers. The downside has been a worsening of Eneo’s debt towards power supply and fuel companies for thermal power plants.

During the second half of 2019, the State of Cameroon made efforts to partially clear its debt while allowing Eneo to continue to have fuel supplies to power plants. However, the amount of accumulated debt still remains very huge and amounted to more than XAF 180 billion as of 31 December 2019 (including XAF 63 billion for State and/or State-owned companies only).

On the other hand, Eneo remains indebted to power and fuel supply companies to the tune of XAF 155 billion as at the same date.

Notwithstanding the fact that the balance remains in favour of Eneo, the entire sector faces a persistent lack of liquidity to facilitate the smooth running of operations.....

https://www.energymixreport.com/cameroons-power-firm-pushes-its-gas-supplier-into-the-red/
'...What makes the ENEO example particularly odd is that it is not an entirely state-owned company. It is majorly owned (51%) by Actis, the British investor and 44% owned by the Government of Cameroon. ENEO employees own a 5% stake....'

This will have been put back due to Covid-19 ?

https://www.businessincameroon.com/energy/1302-9967-cameroon-promises-payment-of-xaf45-bln-to-eneo-to-reduce-crisis-in-the-energy-sector

Perhaps more of a JV? - I think Schlumberger did similar with SOU and one or two other? And too, isn't Mercuria doing similar at PRG? Not sure whether Vitol has entered JVs with oilers?
Always possible.

NM - perhaps the funding will come from Trafigura?

Jed - this was from the April RNS:
'On 14 September 2019, Altaaqa, the generator supplier to ENEO, suspended operations at ENEO's Logbaba site due to non-payment of invoices by ENEO. Consequently, GDC has not provided gas to ENEO since that date, but has continued to invoice ENEO based on Take-or-Pay provisions as per the binding term sheet. The suspension at ENEO's Logbaba site continues but VOG is aware that talks between Altaaqa and ENEO are occurring and the company is optimistic of a resolution, although no timing can be predicted.
ENEO has arranged payment of invoices in full for May, June, July and August 2019, totalling US$ 5.1 million. '

Well, we did squeeze some money out of them - but clearly not enough.
We are not in direct talks with ENEO so 'different people in charge' at VOG may make little difference to the outcome of talks? The problem is with the government not being able to pay ENEO. Perhaps World Bank funding might resolve that outcome?
Nonetheless, VOG must get in more customers - the AKSA power station particularly. This is why I await the strategic update.

[However, the main reason I am invested here IS because VOG was/is a 'basket-case'. I hope for a good recovery (with progress on Etinde/AKSA deal) and perhaps a 7p share price on that, but cannot wait long to see it. My main interest is seeing a large injection of capital into VOG through merger/takeover, with a SP of at least 13p (the YF entry price) - I can see that happening this year.]

mt - same problem in Nigeria. Have a look at the LSE SAVE site. They are hoping for the government getting a $3billion bailout from the World Bank soon (July?). I expect Cameroon may be looking for something similar?

However:
The gross receivables outstanding from ENEO to 31 May 2020 was $15.5 million ($8.8 million net to GDC).

And from Q1 update (17/04/20):
The gross amount of receivables outstanding from ENEO to 31 March 2020 is $US9.1 million (US$5.2 million net to GDC ). The promissory notes are already offset on this ENEO balance as at 31 March 2020, and the gross value of promissory notes received from ENEO is US$5.1 million (US$2.9 million net to GDC) as at 31 March 2020.

Thus net receivables outstanding to GDC increased in April/May by $3.6m.
[However, as in previous post, Revenue from gas sales is only $3.3m. This does not add up. I think the accounting problem is that 'net receivables outstanding' is based on take or pay terms, and so ENEO is being billed for gas contracted for, not gas used.]

All will hopefully be made clear in the next update. Looks like much more pressure needs to be applied to ENEO to cough up [similar problem, but to a lesser extent, that SAVE have in Nigeria? Though we are less dependent on government contracts than they are, having 30 industrial customers].

More positively:
Unaudited revenue to 31 May 2020 was $8.6 million (2019 for the same period: $8.7 million).
Gaz du Cameroun S.A. ("GDC") continues to safely produce and sell natural gas to over 30 customers in the Douala area. The Cameroon Government's easing of lockdown conditions and the usual seasonal swing have resulted in a recent increase in gas demand.

From Q1 update (17/04/20):
A daily average of 5.1 mmscf/d of gas plus 1,343 bbls of condensate was produced safely and sold to industrial customers, resulting in net revenue to GDC of US$5.3 million for Q1 2020 (unaudited)
The impact on our gas sales directly attributable to COVID-19 to date is not material, however we remain highly vigilant.

So Revenue from gas sales for April and May 2020 is a net $3.3m; which pro-rata will bring in $4.95m for Q2. But the recent increase in gas demand may make June higher - so let's say we shall see for Q2 the same net result as Q1 of $5.3m.
So, all in all, a highly creditable performance given the disruption of Covid and the near-collapse in the oil price over this period.

Same comment applies here:
Auditors
Deloitte Ireland LLP
29 Earlsfort Terrace
Dublin 2, D02 AY28
Ireland

A pretty unimpressive start for Mr Kelly.
Can't say I learnt much from that RNS.
Next update is for Q2 - about mid-july.
Presumably strategic update will come with the Annual Report (hopefully July).
Well 108 remediation work progress?
Progress on Eneo payments?
New customers?
Legacy issues?
Relationship with New Age's Etinde project; and Aksa power station progress?
We will just have to wait.

At least revenue seemed to be in line with previous year; but cash and cash equivalents noticeably down - we await the explanation in the full accounts.
Not much to say except - get your finger out, Roy.

razoba - I take the point. Only 4m shares sold; otherwise an adjustment for dilution.
Perhaps it is of little concern; or perhaps it is someone else selling (1.2m went through the other day)?

Thoughts?
At CERP they retain about 9%. So perhaps they got news of the merger with BPC early, and sold down some but not all?
Likewise, perhaps they got news early of changes afoot here, and sold down some - but will retain a holding?
And what news might that be (if not Trafigura taking a stake) ? - should find out by AGM of 22nd July, if not before.
Has the recent publicity been arranged here so as to allow Schroders to sell down at a reasonable price; and to get in 'matching' new investors so as to avoid a bad SP fall?
Has anyone got other recent examples of Schroders selling down their small O&G portfolio?

Careful: Significant shareholders was updated today as Schroders 14.69%. However TR1 came in at 5pm with Schroders 8.95% [Let's see if they update 'Significant Shareholders' tomorrow to reflect this change.]
Schroder's selling seems to explain the low share price. They were even selling at the 1.4p level apparently. How desperate are they to be out entirely? [I think I recall they were selling down in CERP too, recently. - so not specific to dissatisfaction with PPC?] Have they decided to exit small O&G since the oil price fall?

Yes, Paul, always thought Accugas was a great business, great potential.
But it is not a business if you don't get paid. As you say ' It is all about getting paid'.
If it continues like this for much longer, with unpaid invoices mounting presumably, then we must exit Nigeria or go bust. [Triggering the partial loan guarantee is not the solution imo; nor do I think it will stop the rot].
If we do get paid, and regularly, then it remains a great business with great potential.
That is the conundrum.
But I would still like a more frank and honest CEO heading up this company.

The most important bit:

Financial and Operational Update for 2020 YTD - Key Highlights



Pending the announcement of its full year 2019 audited annual results and further to the operational and financial update previously published on 1 May 2020, Savannah is pleased to provide an operational and financial update for 2020 year to 31 May 2020.

· Average gross daily production (88% gas) increased by 15% from 1 January to 31 May 2020 to 20.8 Kboepd compared to 18.1 Kboepd for the corresponding period in 2019. This includes a 19% increase in Uquo gas production comparing the same periods from 92.4MMscfpd (15.4 Kboepd) to 109.9MMscfpd (18.3 Kboepd);

· FY2019 group revenues were US$17.8m (including approximately six weeks of production of Nigerian operations)

· Group cash position was US$25.7m as at 31 May 2020

· Group debt position was US$520m as at 31 May 2020

At least they can report these figures when they want to. No reason why they can't report these figures quarterly or monthly?

https://www.energymixreport.com/cameroon-negotiates-with-eib-and-eu-to-complete-financing-for-rural-electrification-project/

https://www.businessincameroon.com/infrastructures/2206-10443-cameroon-to-save-about-cfaf14-bln-yearly-through-the-cameroon-chad-power-interconnection-project

https://www.businessincameroon.com/energy/1506-10422-cameroon-obtains-cfaf88-bln-loan-from-the-world-bank-to-boost-electricity-access-in-417-rural-communities

https://www.businessincameroon.com/energy/1505-10327-spanish-company-elecnor-wins-xaf15-bln-contract-for-the-construction-of-a-high-voltage-substation-in-nyom-ii

https://www.businessincameroon.com/energy/0805-10299-cameroon-seeks-new-partner-for-the-construction-of-350mw-limbe-thermal-plant