Member Info for komakino

Unfortunately in French and I guess it's probably not going to tell us anything new but might be interesting if there are any French speakers out there.

https://www.youtube.com/watch?v=fTUBZJOpQ3Y

Hi PF, not sure this is related to Savannah Energy. All of the other subsidiaries are 'Savannah Energy ......'. The beneficial owner is Jacqueline Anne Mackie who appears to have no links to Savannah Energy and is a director of 2 companies 'CEF HOLDINGS LIMITED' and 'CITY ELECTRICAL FACTORS LIMITED'

Yes, I'd agree with that TiL. Not been able to find anything of note in the Malaysian media about the deal or anything in South Sudan either. They don't seem to do Facebook over there. Wise people ;-)

Yes, hopefully we should as we've had one for the last 2 years in the last week of Jan. Will we get any comment on Chad? Personally I don't think we will, but given we are suspended I don't see any reason why we shouldn't get at least some sort of an update. I guess they may be having sensitive discussions with the govt. who have been pretty quiet since their initial objection statement. As for South Sudan, I'm going for an admission document when we have some assurance from the govt. Ordinarily I'd expect it any time now but not holding my breath on that one!

Whilst we wait, for those of you who don't read ADVFN, Thommie posted some interesting thoughts which might be of interest:

' As Mount teide outlined before this asset had starved any investments since nearly a decade now. It still has a very big resource that can be developed. Even if you dont drill any new infill wells, intensifying the workovers of the around 400 wells that are currently shut in should have a material impact on production and should in my view alone be capable of increasing the production to around 50 000 bopd gross. The ROI of these workovers at current prices would be extraordinary. So investing cash flow directly now would see benefitting all partys! But I guess this thing will drag on for a while, maybe years. Anyway, if chad wants to be part of the international credit market, etc. and as Mt outlined the government and its corrupt heads are desperate of getting the oil revenues, will at one point have to accept this transfer by the ruling of international courts that are responsible by contractual bindings. If once accepted the chad government will accept saves operatorship even if they get the petronas stake on top of their current 25% holding as it's in their very interest to increase production and Management the asset in a profitable way by international standards that save with its workforce can give. I think even the government knows, that operating the assets alone wouldnt be a good move in the longterm...
The good thing is, that save wont lose out on any revenue as operatorship transfer happened legally in december, so they can sit it out, even if it drags on for years they dont face a financial problem or anything. The prepayment facility gets paid down automatically by incoming revenues from the liftings that are constantly happening. I think the revenues go to some Cayman islands tax haven before being distributed between the partys depending on their working interest.

And if its right what analysts wrote in december that by company sources the prepayment facility (around 170m$) was expected to be paid down in just 3-6 months by the expected revenues. The only explanation I still have how that would be possible in that short timeframe is that already half of the needed money was in inventory of the subsidiary in form of unsold oil in an underlift position in early december when the purchase was closed with a value of around 80m$. Im no accountant, so Im still not sure if the way I read the outlined financials is correct...

So the good thing is oil will be flowing, revenue will keep flowing, debt will be melted down very fast no matter how long this court case goes on. Save just misses out (like the government as well) on additional revenues by reinvesting the cashflow in the mid to longterm.'

Thanks PF. Not unexpected that Save would go quickly to arbitration. Looks like it'll be a while before anything is resolved on this and guess the market will attribute nothing to the sp until it does, when we relist. Hopefully we get some govt. assurance on SS and relist to market fairly soonish.

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.

Ha ha, if I did that my wife would be the first out the door!! Kids have no money so only way of getting rid of them is if I pay a rather large exit fee. Feels familiar somehow ;-)

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

So we now have 3 Savannah Energy Rx Limited subsiduaries

RC, RN and now RT

Renewables Chad?
Renewables Niger?
and now
Renewables Tunisia? links with the possible ENI acquisition.

Lol Soder, I'll never be able use Thanks in Advance ever again ;-)

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.