Member Info for mcb77

When SAVE were suspended back in early June I believe brent was trading at around $67, its currently $79.
Another factor to consider on re list price, as has been mentioned before is the ACUGAS business has performed very well since June. Revenues and production up, cash balance increased, with debt being paid down.
Also the reserves upgrade to add in.
Due to the suspension none of this has been priced in by the market, so potentially the share price could have been mid to high twenties without the Exxon- Petronas deals.

Value accretive transaction... Thats what they said about the Seven Energy transaction, and raised at 35p to purchase it.
Several years later unbelievably they have raised at 19.3p. Far from impressed with the raise price is an understatement.
To be fair the amount of shares issued is impressive given the size and quality of the assets they are purchasing. When put together, the production, and potential for increasing production should create a very high market cap here. Huge increase in reserves also.
This should comfortably be 40 - 50p before any production increases given what other simular companies are valued at. And that's being very Conservative.
But the market can be strange at times so will have to wait and see on re list price tomorrow.

Very interesting regarding Recon Zengas.

Their share price performance over the last year has been staggering! It just highlights how grossly undervalued SAVE currently is. There is now no excuse whatsoever for SAVE to be lagging at a £165 m/cap, especially with oil trading above $60.

My main gripe with this company, and AK in particular is the complete lack of shareholder growth. So far AK has generated sweet FA in terms of returns. Horrific share price performance, no dividends paid (yet), no share buybacks.

At 35p we were told the Seven deal was going to be value enhancing. We are currently more than 50% below that price, and 18 months into completing the deal.

This surely has to be one of the most undervalued companies anywhere in any sector.

If AK cannot generate returns for shareholders here, maybe he should do the right thing and step aside. With the right leadership this could easily be a multi billion pound company. The Recon story just goes to show whats possible, and they are not even generating any income. A pure exploration play.

We have a large revenue stream via ACUGAS, plus huge exploration opportunities in Niger. AK needs to get the story out there!

16/17p is a joke.

I totally agree MR.B.

When oil rallied from its april lows to the mid forties SAVE slowly drifted downwards over the summer months. Oil price now under a bit of pressure, and we get dragged down with it, even though 85 / 90% of our production is gas at fixed rate prices.

The recent updates and results have been very impressive. Director buying is another plus.
Production up, Cash collections up, Debt reduced, New customers to be added at little cost to increase FCF even further.

Add to this the prospect of a progressive dividend. The muted $12.5m was based on the original deal, with lower FCF. They way the business is performing I think this could be increased further over the next few years. With a share price in the 10/12p range this would yeald an impressive 10%. A decent 5% yeald would be on offer with a share price in the low 20s.

This will be a real share price mover going forwards. I see no reason why they couldn't start paying a divi imminently.

Since the share price was in the mid 20s, new customers have been added, debt has been reduced, cash collections and production up. Also cash position is looking alot healthier. But here we are at 10p. Its a crazy market!

Sentiment is the O/G sector may be low atm, but when you look at the ACUGAS deal it now looks like very good business. Im looking medium term here. And i am focusing on what would the share price potentially could be with debt paid down, production increased, and paying a dividend. 80p plus would very conservative in my opinion. Also you cant forget Niger, which offers great exposure to Oil. This should come into play nicely if the oil price recovers in to the $50s with improving demand post covid.

Well balanced post Paul.

Oil price improving recently, brent now above $42, but could remain volatile over the next few months. The economics for Niger looking vastly improved with a break even at $26pb. Just a shame the company couldn't progress operations further over the lsat 18 months.

Looking at the market I see the likes of TLW/PMO/SQZ have nearly doubled overvthe last few weeks. Sure first two are more oil focused, but it shows how quickly out of favour stocks can recover.

SAVE with a market cap of around £75 million could move upwards very quickly. Gas production up, and received payments confirmed on the 1st may update. Sure a more detailed set of financals would be most welcome.

If AK cant deliver more clarity with the financials over the next few months I think we need to upgrade the CEO. After waiting 2 years for the 7 deal to complete, I think most shareholders would be expecting a higher standard of financial reporting. Personally I would keep him for his contacts and knowledge of Nigeria, but after seeing other O+G companies report recently I think he's coming up short.

Believe the debt was $409 million as per update on 11th December 2019. Decent, professional, and a detailed set of financals required next month !

Hi Michu,

I agree, 30 - 35p would be a good target within the next 18 months.
In under 2 years the Benin export pipeline should be completed, SAVE would have access to this. If Brent could recover to the $50 / $60 range ( which is possible ) the outlook for Niger looks very very positive.

With production increasing in Nigeria, debt levels should be considerably lower in that timeframe, also FCF improving. If everything comes together, and thats a big IF 54p could be well exceeded.

Personally for me if the share price ever got back to 35p ( 7 deal placing price ) I would sell the majority of my holdings. I would probably off load some in the 20s depending on market conditions if the share price recovered.

But back to reality, a near term share price above 10p would be a start !

Hi O+W,

Forecast y/e cash position was $15 million. My mistake.

Year end cash position for Nigeria was $15 million. Announced on 11th December. Capital expenditure forcast $41.5 million for Gas drilling during 2020.
For 4 months up to March 2020 the company recieved $96 million in Gas sales. New Gas customer announced on 31st January should now be added to incoming revenues.

Unless the management are on $50 million a year each, then i would think the cash position should be looking quite healthy. Goning forwards through 2020 even better. The finals need to cover all aspects of the business, but with production up circa 30 % and payments being received I am fairly optimistic.

Apologies. It is dated February 2020.

https://t.co/g5DpB45CWP?amp=1

Positive article regarding World bank loan to Nigeria.

I was in GKP for many years. It actually reached £4.50 in February 2012. So not fantasy. If I remember the M Cap was about 3 or 4 billion at the time, and wasn't producing anything. Huge reserves though.
SAVE market cap 85 million in comparison. Getting paid for GAS sales with world bank guarantee in place. This company is far from perfect, and issues will always arrise when operating in Nigeria.
But the investment case is compelling from these levels.

Finals at end of May should provide substance.

Just thought I would take the opportunity on a quiet sunday to access the fundamentals of SAVE.

I will only draw on information from issued RNSs and broker notes.

From the Nigeria CPR issued on 11th December 19, the assets allocated to SAVE have a NAV of $957 million. ( current M Cap £85 million )
Calabar Gas pricing to increase 43% over next 4 years. ( could you show me an E/P company that could forecast that price increase for production revenue in this current environment ).
Production costs were reduced by 18%.
FCF to average $130 million from 2020 - 23. ( not including additional contracts ).

On the 31st January an additional customer was announced. FIPL would take 35mm cf/d. Using the brokers FCF pricing estimates this would generate an extra $10 million FCF per 10mmmcf/d.

Recent update shows production for 2020 has already increased 25%. $ 96 million incoming cash within just 4 months.
CEO confident Central processing facility will be full capacity of around 200 mmcf/d at year end. More new customers expected.
All of the above has been issued in RNSs ir broker notes.

When you look at the current investors on board,
Standard Life Aberdeen
TT international
Miton
Hambro
Capital group
VR global
Cavendish
IFC
Legal and general
Ingalls + Snynder
and the CEO hold 70% of the shares between them. A.K holds 27 million shares probably with an average over 30p. They must have some confidence in the future performance of SAVE.

On balance Nigeria is a challenging country to operate in. Over time irregular payments may occur. Im looking at the finals at end of may to provide some more clarity regarding current cash position, debt level, outstanding payments, and FCF.
Also SAVE have to improve their communication with private investors. Currently its not of a decent standard to say the least. Another gripe is the failure of the company to provide any sort of return to shareholders, either with price appreciation or dividend payments. This has to change.

At the end of 2020, if SAVE are producing 200mmcf/d with FCF of $200 million then the above shouldn't be an issue. You would think with those figures it has to be a takeover target for a major or NOC.

https://www.energyvoice.com/oilandgas/africa/238918/savannah-cashes-in-on-nigerian-gas-work/

15th November - march $96 million cash collected. Over a year that should equal around $288 million.
This is with out the new customer announced on 31/01/20. Plus the potential for further deals this year. Growth potential is huge, with revenue protected from near term oil price weakness.

For Niger I am taking a 18/24 month outlook. Developing the asset looks to be cheap. Export pipeline to be hopefully completed end of 2021 into 2022. With US production dropping of a cliff and major projects being scrapped, if demand could pick up as we recover from the covid nightmare, I could see $50 oil as we prepare to export via the pipeline. Another cash generative business in the making.

As a gripe I would like to see management putting their pockets and buying some shares. Share buyback / dividend news would be a plus. We should see some more clarification on plans / financals in the the end of year figures which should be released at the end of may.

Brought more today, was holding of until payments were confirmed. Cant believe we are lower now than where we were 2 weeks ago. More patience required.

I stand corrected. $96 million in 4 months. 15th November - march. And a market cap around £85 million !

Is very impressive. And that is without the new Gas customer annouced on 31/01/20.
With these figures a dividend or share buy back must be possible sometime this year.

The recent tweets indicate that the company has increased Gas production, so you would think if there were any issues regarding payments then there is no way they would have done this. I may be wrong. Also no conformation via RNS of payment complications, or invoking world bank guarantee as of yet.

Communication from the company is very poor. Waited 2 years for this deal to complete, and so far it has certainly not been worth the wait, remembering Andrew Knotts comments from 31/05/19.

The amount of institutions invested in this company must have better idea of whats going on atm. I would be very interested to get their take on things. None appear to have sold yet, so this does give me some confidence.

To put it into perspective, the company could buy back all the issued shares from the last 28p placing for just over $6m. With the increased FCF from the improved deal, this should be small change, if we are being paid correctly. With the share price where it is maybe its possible to buy back a large percentage of the shares issued to finance the 7 deal at 35p.

Could it be that the companies appalling lack of communication with its share holders is part of a strategy to decimate the share price to enable this lol.

He seems to like many things about this company. I think his last price target was 70 / 80p a few months ago. If he had left the zero off, he would have been spot on for once !