Hi Moho, the last article in the link was in June 2009 regarding a gas find in Block 8, which was 6 months after they were reported to be proposing the change of name to Agriterra. 7 months previous to that they acquired a private oil company for cash and shares which didn't suggest the impending withdrawal from O&G.
Agriterra listed on AIM on Feb 2009. They sold their Ethiopian o&g assets to Marathaon oli in 2012 and it looks like they ceded their South Sudan assets back to the government as the 2012 report states 'Also in respect of Agriterra’s legacy oil interests, as announced on 25 May 2012, the Ministry of Petroleum and Mining of the Republic of South Sudan (‘MPM’) has acknowledged in writing the Company’s entitlement to receive a compensation payment of £11,372,682. This compensation payment is as partial recompense for the work undertaken and the substantial investment made by the Company on the Block Ba oil concession area in Southern Sudan, during its previous incarnation as White Nile Limited.'
So maybe Savannah Energy WN is to pick these assets back up from the government?
One of the articles in the link states 'Petronas Begins Production at Block 5a in Sudan
Wednesday, June 28, 2006
Petronas has started crude oil production from its Block 5A in Sudan. Current production rate from the Thar Jath field is expected to stabilize at about 20,000 barrels per day, before gradually rising to 60,000 BPD by the end of this year.'
Block 5A seems to be operated now by Sudd Petroleum Operating Company
https://www.oilreviewafrica.com/exploration/exploration/south-sudan-s-block-5a-recommences-oil-production
Here's a few possible pieces of the jigsaw
Malaysian oil firm Petronas has signed an agreement with South Sudan, ... 68 per cent stake in Block 5A through White Nile Petroleum Operating Company.
Historical company news for WN
https://www.rigzone.com/news/company/white_nile-2646/
Changed their name to "Agriterra Limited" in 2008, currently listed on AIM as focused on sustainable development in Southern Africa.
Who knows with AK :-)
http://www.agriterra-ltd.com/
Presumably this means that the US$16.3m payment has been received.
From the 9th Dec RNS
'In connection with the resolution of such differences, the Company has also agreed with Savannah Energy to cancel the Option Agreement, whereby Savannah Energy had an option to take an assignment of the Mayfair Loan from the Company, and for Savannah Energy to surrender its entire shareholding in the Company (and release its security over certain assets of the Company), in consideration for the payment of approximately US$16.3 million to Savannah Energy. '
Fenikso Limited
Completion of Settlement Arrangements
Fenikso Limited (AQSE: FNK) (the "Company") announces that, further to its announcement of 7 December 2022 (the "Settlement Announcement") regarding the proposed settlement of claims with Lekoil Nigeria Limited and Olalekan Akinyanmi, the former CEO of the Company, and the termination of certain arrangements with Savannah Energy International Limited (the "Settlement Arrangements"), the Settlement Arrangements contemplated in the Settlement Announcement and the circular to shareholders dated 9 December 2022 have now completed.
Totally agree TiL. Of course it's frustrating but realistically these are the risks of working in Africa and anyone investing should know that. I for one don't see that there is much downside here. Of course it would be good to get SS done and dusted as I'm sure that everyone will be reasonably happy as that as a base level for the sp. When you step back and see that AK has agreed Chad/Cameroon with Exxon/Petronas, SS with Petronas and reportedly Tunisia with ENI, then you realise how fantastically well placed we are to take advantage of this moment in time where the big players are happy to relinquish assets for a snip. I'm probably more 'all in' here than most and would like to realise some of my investment in 2023 so I can finally get the kids to leave the house, but that aside I'm perfectly happy with what AK is doing here.
cont..
8) I think most likely short-term outcome (has surely already happened) is that the gap between what SAVE is prepared to offer the Chad Gov and what it wants is too big to bridge, so we continue in a stand-off but the oil keeps flowing to pay off the EM loan and into Chad to meet EEPCI's local costs (staff, Gov share etc). Not a good situation but not a complete disaster - as long as $34 M of the loan is paid off the the SAVE parent liability to repay the loan is zero. Longer term, most likely outcome still seems a settlement between SAVE and the Chad Gov. Interested in any contrary views.
Interesting post from Gooseman1979 on ADVFn:
1) Per the Crude SPA and the Prepayment Facility, until the Prepayment Facility is paid off the only money from crude sales that goes to SAVE or goes into Chad is what is required for EEPCI's working capital. EEPCI is the Bahamas entity that has been acquired by SAVE and owns the interest in the Doba fields. So, any money to EEPCI to pay workers / Gov share in Chad goes first to the Bahamas. Given that crude sales physically take place in Cameroon, it is hard to see how the Chad Gov blows this up unless it stops oil production. This still seems very unlikely as it would badly hurt itself financially.
2) The pipeline ownership stakes are via Chad and Cameroon entities. It would seem more possible for the Chad Gov to mess with the revenues coming in too the Chad pipeline entity, but who knows.
3) I agree with MT that this shows that, as expected, the Chad Gov is not confident in the legal route to block / reverse the transaction - makes sense as I would be highly confident that EM thinks it legally watertight. After the Chad Gov's punchy initial statement about this transaction, perhaps this latest move shouldn't be seen as a surprise - saving face requires them to be seen to be doing something and not just letting SAVE carry on as though their statement counted for nothing. The nuclear move would be to shut down oil production - no sense of this happening.
4) Contrary to some posts, this is not "over" whether we like it or not - we are the legal owners and EM is gone - we can't just hand it back.
5) It was clear from the initial Chad Gov response that any incremental investment from SAVE was compeltely off the table until the uncertainty has been addressed - this has not changed as a result of kicking the SAVE employees out
6) It seems the Chad Gov would be happy with 2 outcomes - SAVE pays them off to get the full sign off or SAVE sells to Perenco. I rate the chances of the transaction being "undone" somehow and EM coming back at less than 1%. The Chad Gov can continue to make things difficult for SAVE, but it's still hard to see what it can do to SAVE to force one of its favoured options. Obviously the uncertainty is bad for SAVE and it is heavily incentivised to fix this, but not at any cost. SAVE's future financial exposure to this situation is apparently quite modest (parent co loan liability of $34 M), so it is not just going to roll over.
7) Perenco transaction route seems very difficult as EM would likely need to consent due to the loan agreement etc. and SAVE / EM will be highly reluctant to deal with Perenco and have been seen to be turned over by them. Agreeing on a price would also be no picnic.
Savannah top management personna non grata in Chad.
The decree signed by the Minister of Security specifies that these officials are required to leave the national territory within a period of not exceeding 48 hours.
According to our source, the top management was removed from the Kome site this afternoon.
https://scontent.fman4-1.fna.fbcdn.net/v/t39.30808-6/321138290_3738047143088628_4855987881173228880_n.jpg?_nc_cat=101&ccb=1-7&_nc_sid=8bfeb9&_nc_ohc=uOYWbfAYXgUAX8uhLqP&_nc_ht=scontent.fman4-1.fna&oh=00_AfAiGseEhkzjzc15P00rTSaiJhftENImZysQv7Rr_xhkCQ&oe=63A8B926
Post from Mount Teide on ADVFN
Comforting to see AK has used sector specialist lawyers Bracewell as his advisors:
'Our award-winning teams lead the market in transactions and litigation, regulatory matters and government relations. Bracewell’s strength has made it the firm of choice for many of the world’s most successful companies
With over 50 years of industry experience and one of the largest dedicated energy teams of any law firm in the world, we have a deep understanding of the global energy markets and the drivers for commercial success.
For eight years in a row, Chambers Global has ranked the firm Band 1 for oil and gas regulatory and litigation in the United States. We are one of only two firms in the world to hold this distinction
Chambers Global, consistently rank our oil and gas practice, including our lawyers, in their top bands — a testament to our extensive experience and knowledge of the commercial, legal and regulatory challenges faced by our oil and gas clients.'
Part II
“Russia exports 6m b/d of crude and products by sea, and 80pc of this goes out of its western ports. The system was designed to supply Europe. Only 20pc of his seaborne exports go through the Pacific,” he said.
This creates a logistics nightmare. Instead of a six-day round trip to Hamburg, his tankers face a 90-day round trip to China, even if they can obtain recognised insurance. That uses more fuel, raises costs by $12 a barrel, and locks up ships for longer. “He needs to more than triple his current fleet,” said Prof Kennedy.
The West is banking that Putin will be forced to go along with the G7 price cap, designed to keep oil flowing while eroding his income. It assumes that he will not risk crippling his network of 130,000 oil wells by shutting them down. Only a fifth have strong enough pressure to throttle back output for a sustained period without damaging the field.
Yet Putin has already shown that he is willing to sacrifice his gas industry and shatter relations with the West, all for an anachronistic imperial land-grab.
If he hesitates, it is because an oil crisis would risk a rupture with China and India. “It is the last roll of the dice. What’s left if he alienates all buyers of his energy?” said David Fyfe from Argus.
Or it is because even Putin’s appetite for gambling has limits. “Oil is the only thing that he has left. He has destroyed the rest of the economy,” says White House energy coordinator Amos Hochstein,
I do not wish to criticise the G7 price cap. It is a justifiable calculus. There is a fair chance that Putin will be ground down by the West’s overwhelming economic and geopolitical power. But he may equally defy the G7 and let rocketing oil prices talk for him.
Part II
Martijn Rats from Morgan Stanley said global jet fuel consumption is still down by 2m barrels per day, and China is 1m b/d below its pre-pandemic level. It is therefore all the more remarkable that global spare capacity in the oil industry has fallen to 1.6pc, half its historical level.
Joe Biden has been running down the US strategic petroleum reserve at an effective rate of 0.8m b/d since March. This helped the Democrats avert a wipe-out in Congress last month but it has distorted the global market and disguised the underlying lack of supply. It has also depleted the strategic reserve to its lowest level in forty years.
US shale cannot come to the rescue this time. In previous cycles it grew at 1m b/d a year, enough to break the Opec stranglehold on the global market. This year it struggled to reach half that level.
The best seams in the Permian and Bakken have been exploited. Morgan Stanley said the “expected ultimate recovery” of wells has dropped this year for the first in the history of modern fracking. Rising capital costs are further eroding the business model of frackers.
China’s reopening is likely to have a J-Curve effect on oil as cases spread like wildfire in a “naive” population, leading to self-isolation and jerky stop-go policies. Oil demand could fall this winter before taking off in earnest.
“Road, rail, and air passenger travel in China is still 50-70pc below normal levels, which is astonishing. But we don’t think they can risk reopening given the low vaccination rate of the elderly and the lack of ICU beds in hospitals,” said David Fyfe, the IEA’s former oil guru and now chief economist at Argus.
There is a revealing anomaly in the market. The integrated oil and gas sector on the S&P 500 is up by over 60pc this year, even though crude is today lower than it was before the invasion of Ukraine. “An enormous gap has opened up,” said Marko Kolanovic from JP Morgan.
This extreme divergence suggests that the big funds are looking through the current cyclical downturn, well aware that there are not enough new fields coming on stream to replace declining wells. Capex investment in oil and gas has fallen from $1.3 trillion to $700bn since 2014. There will be one last structural supply crunch before electrification prevails in the 2030s.
Vladimir Putin is a predatory opportunist. He began to ratchet up his gas war in the late summer of 2021 only after it was clear that post-Covid recovery was already tightening the gas market. If he is going to withhold oil, he will do so only once market forces are aligned in his favour.
What is clear is that the West has boxed him in with the price cap. His Sovcomflot fleet of 80 active tankers is too small to export crude from Russian ports in the Baltic and the Black Sea. He has acquired another 50 or so but there are limits. Much of the shadow fleet is composed of giant workhorse VLCC tankers that are too big for Russia’s European ports.
Interesting article in the Daily Telegraph today on oil prices
Vladimir Putin has drawn up a draft decree prohibiting the sale of Russian oil exports to any country or any entity participating in the G7 oil price cap.
Unless he backs down, the world will soon face a critical shortfall in crude and liquid products, adding an acute oil crisis on top of the gas crisis that we already have.
It is widely assumed that the Kremlin will find some way to circumvent the western stranglehold and redirect 4pc of global oil supply from Europe to customers in Asia, happy to take his exports at a stiff discount.
Yet Russia does not have enough tankers of its own and cannot obtain sufficient numbers from the international “shadow fleet”, a motley cast of shell companies on the global margins.
The West controls over 90pc of the world’s tankers through direct ownership or financing and insurance, above all the P&I (protection and indemnity) club that covers complex spill liability for shipowners – at $1bn (£820m) per ship.
Without that you cannot take these floating firebombs through the Bosphorus, the Danish straits, the Suez Canal, or enter respectable ports, even in China.
“If the tankers don’t have the requisite insurance, no terminal is willing to accept them,” said Liu Gan from the Eurasia Institute of China’s State Council.
Putin’s decree may be bluster. There are many ways of complying quietly with the $60 cap while chest-beating at home for nationalist consumption. But he may equally be tempted to play his oil card in a last-ditch effort to destabilise the democracies and pressure the West into accepting a shameful deal in Ukraine, one that lets him swallow the Donbas and the occupied land corridor to Crimea.
“He could squeeze the global market by shutting in two to three million barrels a day (b/d) if he chooses to. Russia is a systemically-important exporter of oil,” said Professor Craig Kennedy, an expert on Russian energy at Harvard University and author of a forthcoming book on the Russian oil industry.
“You can see that they are agonising about it in Moscow: should they risk weaponising oil exports to trigger a price spike, or might it backfire?” he said.
Putin needs oil revenue as the Russian budget dives into a deep deficit. It is becoming harder for the Kremlin to raid the country’s rainy-day reserve funds and there is no domestic bond market to speak of. But his money woes can be overstated.
“He has a very strong hedge: if prices jump enough, he can recoup what he loses on volume,” said Christopher Granville from TS Lombard.
Brent crude is currently well-behaved at $80 as the global economy flirts with recession. The picture will look very different once China fully reopens and global aviation recovers.
Could well be Moho and I certainly think that securing acquisitions is much the quicker way to increasing the MCap (assuming we do eventually complete them, and 7 deal notwithstanding!). Certainly AK has reiterated that this is a once in a generation opportunity so not surprising he is more focused on these than Niger at the moment. Long term it does make sense as Niger isn't going anywhere. Save do have to, in the first four years of the PSC, drill five (as opposed to two) exploration wells to a minimum depth of 2,000 metres, with at least one exploration well on R1, R2 or R4, as well as acquiring 250km2 of 3D seismic. So I don't think it's as much about not being enthusiastic, just that acquisitions have jumped to the top of his to do list.
Tier, we are suspended until they publish the admission document. Last year the SPA's were signed on the 13th Dec and we were suspended. The admission doc. was published on the 30th so we resumed trading on the 31st. So we need the admission doc. to be published. Will AK only publish when they have govt. sign off this time, so hence mention of H1 next year. If we have sign off from the govt. at the time they publish the admission document we should see a quick jump in sp imo.
More than likely O&W, though if Exxon/Save have nailed this down legally, which I suspect they have, then Chad can't do much without cutting off their own nose etc. No doubt we'll see more bluster and bravado from them in the media but what goes on behind the scenes is what matters. Might have to wait a while but I'm sure Exxon/Save are confident that they have this in the bag. Does suggest that there are possible different factions in the govt. with Chad happy to award the renewables contract at the same time. Overall I'm not that worried to be honest. If we get the South Sudan gig, and Petronas seem to be more than willing to be working with us, we'll see the value of the company far in excess of where we are at the moment. Does sound as if Exxon/Petronas have all been working closely with SAVE on this strategy. It's not great that we are suspended - my Xmas pressie budget is in here ;-) - but if this comes off we'll all most likely say it will have been worth it.
Agadem, could be wrong but as I suggested and you sort of confirmed with “Andrew will re-list when he had SS Government signatures”, that could explain an AIM cancellation notice to move to a different market. Seems plausible but as ever we'll just have to wait and see.