Member Info for Itsriskythat

Presentation was called Unlocking the Djeno.

A rig available at the end of summer to re-enter TLP-103C.

First go through the Upper Djeno reservoir again, 12m pay, then deepen the well into the Middle Djeno. First flow test the Middle Djeno if pay also discovered there.

Middle Djeno and Upper Djeno both candidates for production.

No work needed on topside so cheap to drill, drilling from October.

Focus on cash flow, high interest from several parties, including BP, in providing off-take financing.

Presentation has been delayed by half an hour as we await DS to arrive. Early coffee and his presentation now due at 11am.

Patience (or forbearance) is the ability to endure difficult circumstances such as perseverance in the face of delay. Patience is the level of endurance one can have before negativity.

https://en.wikipedia.org/wiki/Patience

Oil continues to flow to surface with minimal water content. However the Schlumberger CPI analysis from January models a water content of 30% and the Nutech CPI models 11%. The models seem at odds with minimal water content in the oil flowed to the surface.

At least it seems that samples to be taken on TLP103-C re-entry of the Djeno will prove little water content.

No contract is signed off at the Department of Petroleum Resources without President Buhari's permission.

So Buhari has selected several new ministers, but not yet the minister at the DPR, which is now being run by the permanent secretary Dr Folasade Yemi-Esan.

https://www.legit.ng/1242387-permanent-secretaries-heading-ministries-pending-buharis-appointment-ministers-full-list.html

From the Twitter account of the DPR, it was known for a while that a new DPR minister would be appointed.

https://twitter.com/FMPRng

On May 28th the minister Dr Ibe Kachikwu made his outgoing statement on his achievements in office. On May 31st, when the RNS was released, Savannah knew that Dr Folasade Yemi-Esan would be running the department when the Seven Energy deal was signed off and did not signal any delay.

To the contrary Savannah expected it to be signed off "in short order".

SJ "We are poised to begin reaping the rewards of our strategy in Nigeria upon completion of the Seven Energy Transaction."

AK "At the time of writing (30th May), we shortly expect to complete the Transaction (on the revised and improved terms) and I strongly believe that this will prove to have been worth the wait."

Not sure where you get the 800bopd from?

In other words there was a shortfall in getting the facility size so Lombard Odier agreed to take part and added a further cash in a placing so as to reduce the overall size required from other investors. Lombard Odier are seriously committed now to getting the funding across the line.

Extremely good news as the current 275bopd of Blazh-10 is a natural flow rate. Licence commitment met. Job done.

What is the reason for the delay in getting consent for the Seven Energy transaction?

This is the hardest question to answer but I'll have a try. The root causes of the the delay might lie in Savannah having made a change to the transaction in September which was RNS'd below:

"Following submission of the revised terms of the Transaction detailing the additional acquisitions, as announced by the Company on 20 September 2018, to the Nigerian Department of Petroleum Resources (the "DPR"), the Company is pleased to confirm that the DPR has informed Savannah that it has now completed its due diligence in relation to, and is fully satisfied with, the Transaction. Further, the application for Ministerial Consent for the Transaction is currently being processed with the DPR for further transmission to the office of the Minister of State for Petroleum Resources for final approval."

Subsequent to that change there was a major change with an acquisition of a controlling interest in Accugas, the sale of 25% of SUGL for US$70m, and a new agreement with Accugas Lenders and other creditors, which was RNS'd in December.

I've been reading about the delays in approval which currently exist if transactions are complex and if the discussions with the relevant Nigerian department extend over many months.

The comment below is in connection with power company CPG which is currently seeking government approval for a new gas-fired power plant:

"There are several critical documents that the government needs to approve and you know things have changed in the government. You know the will seems to still be there. Several of the people in the regulatory bodies are different. Several people have changed and any time there is a change, you need to bring the new people up to speed and justify why things have to be done in a certain way. This is what causes a lot of delays. However, what we ask is that the learnings that were achieved by people in office should not be lost whenever there is a change in the office. And if the learnings are lost which we have seen happen several times, it is almost like we are restarting again. So, we are pushing for the government to not lose some of the learnings that they have gained and don’t get me wrong, some of the people, some of the regulators are very intelligent people."

https://guardian.ng/energy/nigerias-electricity-distribution-below-installed-capacity-due-to-broken-value/

Whichever department is referred to above, I am sure the same applies to the DPR. It seems to me that the root causes of the delay are of Savannah's making with their changes to the transaction, and it is unfortunate that the people Savannah is dealing with are a changing group of people at the DPR.

On this basis there is no reason to think that this is anything other than a delay to getting consent, and it will happen.

The discussion of the renewal process starts at 50:50

In this interview last week with the Nigerian Minister for Petroleum Resources, a lot was said about the licence renewal process and how the Nigerian President is directly involved:

https://www.facebook.com/FMPRng/posts/2392308747487451/

Plenty of information earlier in the interview about large infrastructure projects, but Seven Energy and Accugas are too small to get a mention.

Sirius will have a long wait too

https://www.investegate.co.uk/sirius-petroleum-plc--srsp-/rns/ororo-update/201904050730012584V/

Yep, seems no-one here cares anymore, but they will do if no progress made on the Seven Energy transaction. And obviously the Savannah team are feeling the pressure at present.

Going Concern

As at the 31 December 2018 the Group had a cash balance of US $15.6 million. This balance is sufficient to fund Echo's near term expenditures, including a commitment to acquire seismic data in the Tapi Aike area. Whilst rigorously pursuing cost control and value maximising strategies, the Group recognises that in order to pursue organic and inorganic growth opportunities and fund on-going operations it will require additional funding. This funding may be sourced through debt finance, joint venture equity or share issues.

These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern.

The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern The directors have formed a judgement based on Echo's proven success in raising capital and a review of the strategic options available to the Group, that the going concern basis should be adopted in preparing the financial statements.

Buys of 500k, 750k and 250k shares, all three at ~12.75p, were reported in the ADVFN list of trades after the close this evening.

Misreported trade at 16:29:58 100k was not a sell but my buy at 9.6p. See what tomorrow brings but possibly more shares will be available at 9.6p in the morning.

Wish he'd be also at his desk from time to time ..

https://www.youtube.com/watch?v=YKUSPBa4O3M

Ditto. In the absence of any new indications of progress, you're certain to lose faith, but I'm focussed on the upside.

https://www.youtube.com/watch?v=KCQYoeAuEww&feature=youtu.be