Member Info for komakino

Howdent, maybe you should try reading the post before you comment. I assume you missed this bit 'Shares outstanding are around 1.6 billion shares - over 2bn now but modeling is based on 1.6bn '

You might also want to check the exchange rate when I posted, not when you did.

The standard of constructive criticism on this board is a joke.

Hi Noix, I just noticed the last section of my post didn't copy across. It was

'Valuation sensitivity: Each US$100 m of net monetised value roughly translates (at current share count) to ~£62.5 m increase in equity value → roughly ~4p uplift per US$100 m of net award (assuming ~1.6bn shares and £/US$ ~1.25).'

so fairly close to your calculations. If the receivables start getting paid via the proposed bond programme then it's possible there will also be an uplift due to increased positive sentiment if they become regular.

I asked ChartGPT to model some scenarios:

1. Key data points

Savannah states in its update that its subsidiaries Savannah Chad Inc (“SCI”) and Savannah Midstream Investment Limited (“SMIL”) are claiming in the arbitration: > US$775 million (plus interest approx US$140-plus m) for nationalised assets in Chad.

Current market capitalisation of Savannah is around £100-120 million (≈ US$125-150 m at current FX) according to recent data.

Shares outstanding are around 1.6 billion shares - over 2bn now but modeling is based on 1.6bn

The share price is trading very low relative to the potential claim value (~6–8 p in GBX per share).

2. Upside scenario modelling

Assume that Savannah wins the arbitration and obtains a settlement or award, let’s say for US$600 m after costs (a conservative net amount below the claimed US$775 m).

If awarded US$600 m, and assuming 100% of that flows through to equity value (ignoring taxes, legal costs, enforcement risk) — convert to GBP at ~1.25 USD/GBP → ~£480 m.

Add that to current market cap of say ~£120 m = total implied equity value ~£600 m.

With ~1.6 billion shares outstanding, implied share value ~ £0.375 per share = ~37.5 p (versus current ~6-8 p) → ~5-6x upside.

If we take a more “optimistic” scenario: award of US$900 m (~£720 m) → equity value ~£840 m → share value ~£0.525 each (~52.5 p) → ~7-8x upside.

3. Conservative / risk‐adjusted scenario

Because of major risks (enforcement, delay, discounting, partial payment), let’s discount the US$600 m claim by 50% to reflect risk/time value → US$300 m (~£240 m).

Equity value ~ £120 m current + £240 m = ~£360 m → share value ~ £0.225 each (~22.5 p) → ~3-4x from current.

In other words, even with conservative adjustments, the claim has a meaningful “latent value” in the share price which the market may not yet fully price.

4. Factors that might reduce realised value

Enforcement risk: even if award obtained, Chad may delay, negotiate settlement, or pay out over many years (reducing NPV).

Legal/arb costs may reduce net award.

Taxes, local repatriation costs, legal currency risk (Chadian Franc / USD) may reduce effective value.

The claim may be partially settled for less than strategic value.

Market scepticism: the market may only price say 30-50% of the claim’s face value ahead of final judgement.

5. Implications for share valuation

Base case: share price remains depressed (~6-10p) because market currently sees high risk.

Trigger event: favourable ruling or credible settlement may act as catalyst — modelling suggests potential target share price in range ~22p to ~52p, depending on assumptions.

Time horizon: This likely not immediate — a ruling + enforcement process might stretch into 2026 or later (Savannah expects conclusion “no later than 1H 2026” for some proceedings).

Valuation sensitivity: Each US$100 m of net monetised value roughly translates (at current share count)

Challenging the arbitration ruling is common as it's a delaying tactic. However, for ICISD arbitration (applicable to Savannah) rulings there is no appeal. The only possibility is ICSID annulment on very narrow grounds (corruption of arbitrator, failure to give a party a chance to be heard, tribunal exceeded mandate, etc.) Once the award is issued, it must be recognized and enforced like a final domestic court judgment in all ICSID signatory states, which includes Chad.

If Chad refuses to pay then Savannah can seek enforcement in jurisdictions where Chad owns commercial assets, including state-owned oil cargoes, receivables, bank accounts linked to commercial (not sovereign) activity. Courts in those jurisdictions can seize or attach assets which is what happened to Venezuela and Congo in enforcement battles so it's just not theoretical. Governments hate enforcement actions because it damages credit ratings, scares lenders, and exposes commercial assets abroad.

Given Save had stated 'Whilst the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation, no compensation has been paid by the Government of the Republic of Chad to date.” it's fairly likely that some form of compensation will be warded imo.

Hi Scotpak, I based that on the fact that there is now a committee to review the debts and I've never come across a committee that speeds up the process :-) Hopefully you are right though.

Good that they are looking at establishing sustainable payment mechanisms but most likely this will mean that the payments themselves will take longer than originally reported. Looks like Hx might be making another fiver off me after all :-)

Yes, I'd agree with you. You'd hardly expect them to be investing such a large stake if they took Hx's view on things ;-)

I'm pretty sure they'll be in somebody's ear but pretty doubtful they will be able to influence timeframes any more than the weight of the existing gas suppliers and gencos have been able to do.

Thanks Zengas. Interesting to see how this plays out as you'd expect Nipco are going to have a decent amount of influence going forward. Concentrating on further Nigerian activity may not be a bad thing!

The 4th March RNS said that the new investor was committed to subscribe for 113,378,685, not that they would purchase that exact amount. Given no other new investors appeared on the share register it's logical to conclude it was Blacksea and they simply purchased more than they were committed to.

It seems almost certain that Blacksea have sold to NIPCO, though waiting on Investor relations to confirm that for definite.

Blacksea were stated as taking part in the fundraising RNS on the 3rd March 'The Company is aware that Andrew Knott, Director and CEO, and Blacksea intend to participate in the Fundraising'

https://www.lse.co.uk/rns/SAVE/update-on-ops-financials-fundraise-suspension-mq2747e9si9tp8t.html

They then issued a TR1 RNS on 6th March stating Blacksea had acquired 165,088,049 shares.

https://www.lse.co.uk/rns/SAVE/holdings-in-company-yowpk1yoqzn8nhj.html

I've messaged IR so will report back if/when I get a response.

Think that must have happened as there has been a net increase of 510m shares which almost tallies (514m) with the increase in Nipco, AK & Cavendish holdings less Blacksea holdings.

RWC asset management would have dropped off the list anyway even without selling as the new increased share amount meant they dropped to 2.35%.

In the fundraising update it stated that 'Nipco expects to acquire a further £9.5 million, 135,674,944 Ordinary Shares through a series of secondary market trades' so it's plausible they have bought out the majority of Blacksea's stake.

Weirdly, Blacksea WLL are not showing at all despite them owning 165,088,049 shares previously. The half year update still contained this reference 'Completion of an equity issuance in March 2025, raising in aggregate, gross proceeds of approximately £30.6 million and the signing of a US$200 million acquisition debt facility providing access to potential funding for future hydrocarbon asset acquisitions;'. Whether that still exists if they have sold their stake is not clear.

I've never seen any document that shows whether Save can charge interest on the true-up, but the 2024 annual report does show they do charge interest on late payments. Section 10 Finance Income 'Other interest income includes US$4.8 million (2023: US$nil) of default interest on late payments charged to customers'

For balance, the other AI engine summarised it as

'Interpretation

Although Savannah Energy is engaged in share buyback activity — which can occasionally be an early step in privatization — in this instance, it is described as “conditional” and part of broader financial repositioning rather than a delisting strategy. The tone and structure of its official updates suggest it plans to remain AIM-listed, benefiting from access to public capital while restructuring its equity base.

Conclusion:

Savannah Energy’s current announcements — particularly the relisting of shares, planned fundraising, and operational expansion — indicate a continuation as a public AIM company, not preparations to go private.'

I doubt I've got any more knowledge than yourself CYB, so your thinking is just as valid as mine. I asked ChatGPT and another AI engine for an opinion which differed. They are too long to post here but ChatGPT's opinion which was more suggestive of a takeover possibility summarised it as

'Overall likelihood (subjective assessment):

Possible / Early-stage setup: ~6–7 out of 10 chance that this structure could enable a future management or strategic buyout within 12–24 months if valuation remains low.

Immediate intention to delist: ~3 out of 10 — not signalled yet, too early to call it an active plan.

🔹 What to watch for next

If Savannah is quietly preparing for a take-private, you might see:

Further concentration of ownership — CEO, NIPCO, and possibly insiders accumulating more shares.

Reduced public communication — fewer updates or investor marketing.

Buyback acceleration — aggressively reducing free float below 20%.

Strategic review announcement — formal language often used before bids.

Trading liquidity drying up — low volume, wide spreads.

Those are typical early signals that a company is moving toward a management- or partner-led buyout.

🔸 In plain English

Savannah isn’t saying it’s going private — but it’s acting in ways that make it much easier if they decide to.

They’re strengthening insider control, simplifying the structure, and pulling shares out of public hands — all steps that make a future delisting both cheaper and cleaner.'

CYB, AK and NIPCO have 32% between them. Vitol don't hold shares so there's a long way to go to 75% , so personally don't really see that as their intention.

Good summary Che7win, pretty much sums it up.