Member Info for happysparrow

https://www.businessincameroon.com/energy/2206-10444-cameroon-funding-stage-completed-for-cameroon-chad-power-interconnection-project

The government's priority seems to be to develop power within Cameroon and neighbouring regions rather than developing a traditional 'export of energy' model to the West. This is perhaps confirmation of Bordersman's 'elephant in the room' question. This 'regional' model will benefit western companies that provide infrastructure; and operating companies will be dependent on the government for a large part of pricing (like SAVE in Nigeria; and VLU in Turkey) until they develop sales to private business. These companies have little options regards selling to the global export market - thus Bordersman's phrase, if I have understood correctly, 'landlocked'. Thus VOG's fortunes are tied in to the overall regional development of business in Cameroon and Central Africa. Can this model work? In the long term, yes imo.

[extract - Bordersman's post: '... the biggest elephant in the room is the fact that Cameroon seems unwilling to export energy. The landlocked nature of the business model means that the Cameroon government will always hold the keys. Glencore was probably on the money walking away from their sunk costs. i got the message when the drilllcost doubled ( who were the drillers - why was the drillcost not capped?) and took a hit. Ouch. Sage continually warned those on ths board. He was right. As far as I can see a company with big pockets is not gong to ride to the rescue until one can see a clear opportunity for a non Cameroon domiciled company to make exportable profit. It is landlocked and the powers that be are clear in their wish to keep Cameroon energy in Cameroon. I think the business model is flawed ...]

Anyone who thinks this is undervalued clearly hasn't read the latest Financial Report.
http://otp.investis.com/clients/uk/cadogan-petroleum/rns/regulatory-story.aspx?cid=46&newsid=1389413
Loss-making businesses (large reduction in cash from previous year); and loan note at serious risk.

From today's RNS (2020 average of 9,100 bopd @ $40/bbl):
Bretana production and development
At the time of the shut in of the Bretana oil field in early May, the Company was producing approximately 11,433 barrels of oil per day ("bopd") from seven wells. Comparatively, in Q1 2020, PetroTal produced 9,688 bopd, up 25% from 7,767 bopd in Q4 2019. From April 1, 2020 to May 3, 2020, when the oilfield was shut in due to the Peruvian government Covid-19 health directive, average production was 11,465 bopd. Due to the field shut down, average first half production will be 6,934 bopd.
When the field reopens, the Company expects that the production level attained at the time of field shut down will be achieved, following a short period of production evaluation.
Subject to the Brent oil price remaining at or above approximately $40 per barrel, the Company plans to drill another production well in Q4 2020 and anticipates average production of 9,100 bopd for 2020, inclusive of 11,190 during the second half of 2020.
Other capital projects, including further expansion of the central processing facilities and drilling an additional water disposal well, are currently deferred.

Thank you, Mick. Useful summary of the investment case.

Where is the ambition?
What are these people getting paid for?
What is the point of investing here?

Thanks for the input, Pecten. My expectation is that the loan has neither been repaid by cash, nor repaid by shares (that would require an RNS for sure) but the term of the maturity date has been once again extended - as suggested by the company's silence.
Given the importance of this issue as an indicator of our ability to pay off the loan, and an indicator of our overall cash position; and that the company has RNS'd on this matter before, once heavily pressed by shareholders; I think it is wise that we now press for a further update from the company - and not let the answer to this question be excluded from the company information and promotion on the 24th and 29th June.

Agadem - it was late, I was tired, and it was ill-mannered of me to be so direct.
Nonetheless, I have been consistent throughout in asking the hard questions, I will continue to do so, and I am not willing to write material to promote this share to others whilst those hard questions remain unanswered.

Agadem - I have been consistent throughout in my search for the truth about the company's cash position, and of it's importance.
By quoting back to you your post of 6th January 20.55 I think it is clear that your position has not been consistent.
I find your insults both petty and ill-mannered.

Agadem - remember this? Here are some extracts:
RE: Short term loan facility maturing06 Jan 2020 20:55
'... Personally, I’ll be very disappointed if we use shares to pay back the 1st drawdown of $5m + $350k interest = $5.35m.
I guess they may use shares but why would they. I completely get your numbers etc but with the cash we have, I firmly believe we should pay it back and not dilute for the settlement of this loan. I also see no need to use the 2nd drawdown and waste more cash by paying another $350k of interest.
With $54m in the bank, minus costs and tax etc, another $20m on the way and $10m pcm of FCF, we’ve no need to dilute. ....
If we do use shares to pay back the $5.35m, it will give me serious concerns about the forecast incomes from Nigeria as I see no other reason to use shares unless we have grave revenue implications.
-------------------------------------------------
WHAT is different this time?

Longy - the company paid off $40m - I don't recall from what it was paid. Whatever happened to the $74m we got on completion of the 7E deal? Where is the $10m a month income from January we were promised?
This was a big issue for shareholders in January; and we took 2 months to squeeze the 6th March RNS out of them. What is different this time?

6 March 2020
Savannah Petroleum PLC
("Savannah" or "the Company")
Update on Loan Facility
Further to the Company's announcement on 18 October 2019 (the "RNS"), the Company announces that the Maturity Date of the Facility (which is no longer considered material to the Company) was amended to be 6 June 2020. The Facility is expected to be repaid in full from the Company's cash resources prior to expiry.

I emailed the company, quoting the above, and asked straight 'Has the facility been repaid?'
I received NO REPLY.
Imo shareholders would be sensible to press the management for an answer.
Remember, Cash does not lie; company directors do.

Much appreciated.

Thanks, Sparky. That's the kind of conclusion I came to, that is 'treading' water' for 2020 at this oil price, unless further production added. Those 7,000 extra barrels will certainly come in handy. Understand they are running the pipeline currently. Any idea when they are due to come online?

Z - not looked into this in any detail, but some simple sums (from your post):
$49m supplier obligation
$15m for 3 years oil contract payment
$7m disposal well
less $11m cash
less $18m raise
= $42m cash to generate to meet breakeven (then other costs to be met not included in 'netback'?)

Assume $30 bbl year average and netback $11/b
Thus $42m / $11 / 365 = 10460 bopd.

It all looks a bit tight to me if oil doesn't rise to $40+ for the rest of the year?

Thanks for your reply, Sparky.
I made a very quick calculation - very basic (using the financial section of the 30/04/20 RNS):
20,000 boepd (4,000 hedged @ $66, 16,000 @ $50) = revenue $1,264,000 per day
less Opex and G&A @ $30 = 600,000 = 664,000 per day
x 350 days = 232.4m gross revenue
less 120m capex = 112m gross revenue
Then less (Dividend?,) Tax, Depreciation, Decommissioning costs (reserved cash) - whatever that comes to.
Basically, I couldn't see much left in the pot.
However, if they bought 10,000 bopd extra production - then that was a very different story.
Hope that's of help.

I did some very basic sums: - couldn't see this turning a profit on current production (given expenditure, decommissioning, tax, depreciation, etc) unless this averaged $50 oil this year.
Looks like they need to buy production - that seems the basis for the share price i.e. an acquisition of 10,000+ bopd.
Anyone else reach this conclusion?

Did anyone notice this at the end of the RNS? (why is it always put at the end?):
'... Upon collection of oil sales invoices in the next few weeks, PetroTal will have cash of approximately $11 million. The Company has obligations to its suppliers of approximately $49 million, excluding the contingent liability to Petroperu. Deferred payment plans are either in place or being discussed with a number of suppliers that will result in the payments being deferred to fit within PetroTal's cash resources and future cash flow generated. '

I keep an eye on Bowleven. This is Warbaby on advfn-blvn:
"I thought they had a buyer lined up but clearly not." While, as per COC's Letter to Shareholders in Feb 2017, a sale of the company remains the most likely eventuality, until it is known what is being bought, 20% or 25% of Etinde, could there be any realistic offer for BLVN until that is resolved, especially given the margin of difference that 5% represents - 49mboe or 61mboe at P50? As there is plainly a strong JVP desire in the current negotiations with SNH for them to participate (as well as equally strong reasons for the government of Cameroon to take up the JVP offer) it's most likely to be 20%. From the AR: "SNH would also be asked to formerly (whoops!) commit to taking up their 20% share of the licence, which would require them to commit to providing their share of the development budget and their share of currently unpaid back costs. As part of this process, the JV partners may reach an agreement to fund SNH’s share of current and past development costs under a commercial financing agreement" I have long thought a bid from Lukoil, New Age or A N other to be unlikely until post, or at least closer to, FID and with the FEED report, IE seismic reprocessing outcome, FDP and the translation of IM resources to reserves, all due in Q4, that's when there might be more grounds for bid expectations. Additionally, given how it's constituted, difficult to see how the present Board could properly handle a bid, given one member is a nominee of COC and t'other a direct appointee, and perhaps Chahin should have been quizzed on this in one of the Conference Calls: Http://otp.investis.com/clients/uk/bowleven1/rns/regulatory-story.aspx?cid=1058&newsid=1005517 Perhaps, therefore, between now and Q4 a Board change RNS can be expected, which just might, of itself, indicate that summat's afoot.

This is from our RNS of 5th Feb 2020:
· GDC has entered into a non-binding Letter of Intent ("LOI") with New Age Cameroon Offshore Petroleum S.A. ("New Age" and together with GDC, the "Parties") for the supply of a minimum of 25mmscfd of gas from the Etinde natural gas and condensate field ("Etinde");
· To enable access to Etinde natural gas, additional downstream pipeline infrastructure proposed to be developed by GDC to connect this gas supply and be fully debt funded;
· Non-binding term sheet for long term gas supply to satisfy Aksa Energy Uretim A.S. ("Aksa") off-take agreement and other future potential grid power contracts;

Our Roy Kelly is ex-Kerogen. Kerogen are the major shareholders of New Age. New Age and Lukoil are major shareholders of Bowleven. Watch for changes at Bowleven between now and Q4? That might indicate some kind of corporate action at VOG too? Merger/takeover?
Also, imo, keep an eye on activity at SEY.

Not entirely accurate article, and well behind the VOG RNS news - as anyone in SAVE will tell you: there with a big problem of Government non-payment in Nigeria that Save do not want to reveal to shareholders.
At least VOG is up-front about the ENEO payment situation. Long may that last.

https://www.energymixreport.com/cameroons-power-firm-pushes-its-gas-supplier-into-the-red/