Member Info for mcb77

Looking at the the Seplat takeover of Eland gives me great confidence with the value of Savannahs assets.

The £382 million all cash offer for Eland would value SAVP at around 43p a share. It just highlights how massively undervalued this company is. The potential growth on offer here is huge, with the expected increased demand for gas in Nigeria in the next few years.

Fundamentals looking excellent, with the reported increased interest in partnering Savannah in Niger this week. Hardly surprising given the CNPC deal to build the export pipeline from Niger, in which SAVP has access to.

Personally I am surprised the share price has drifted back to these levels given the potential near term news flow on offer. As I have previously mentioned the placing to finance the Seven transaction was at 35p. The company's fundamentals have improved massively since then, so in my opinion 22p gives a great opportunity to buy at discount prices.

GLA

Yes looking very positive with the pending deal completion. Also worth considering the vastly improving fundamentals with SAVP since the deal was financed in December 2017, with a placing at 35p valuing the company at 313 million.

* Since the placing at 35p, the deal has been restructured and improved significantly.
* Gas demand in Nigeria appears to be on the increase.
* Potential to increase Gas production in Nigeria via spare capacity.
* 5 /5 successful wells drilled in Niger.
* Export pipeline to be built by CNPC from Niger, giving Savannah the opportunity to produce larger amounts of crude.
* Talks with potential partners in Niger.
* Jefferies / Numis appointed as corporate brokers.

When you assess the above and consider at what price various institutions brought in at, you would have to say the company is very undervalued atm. At deal completion i see no reason why the share price would not close comfortably above the 35p the deal was financed at.

Very interesting read. I see they value Acaugas at 58p risked. You can see why they wanted more of this business in the deal.
Imagine if they can maximise the spare output thats available in the gas network. The potential could be huge.

It does make you wonder what the upside could be here. I believe that some staff have share options at 42p and 60 something . Its possible these could be hit near term. Time will tell.

Thanks for posting Lobon.

Very good point made today regarding the placing in January at 28p ( without ministerial sign off ).

I have mentioned before in December 2017 the placing to finance the deal was 35p. Andrew Knott, and various institutions participated in both placings, and you would think they would have targets way above this considering the deal has since been vastly improved in Savannahs favor.

Now we have ministerial consent, and are on the verge of completing the deal. Since the 35p raise as mentioned we have also had great success in Niger. Fundamentals looking excellent !

With the share price at 19p, some serious gains could occur when you consider the above.

I think you should compare the market caps of SAVP and ECO. SAVP 167m compared to ECOs 250m. Then check the fundamentals.

If / when the seven deal completes, you would think a share price of 35p would be a minimum considering $125 million was raised at 35p to finance the deal.
Since then the deal has been improved significantly, and the company has completed a highly successful drilling campaign in Niger. Plus progress seems to be being made on the export pipline from Niger.

This is just my rational opinion. At 35p the market cap would still only be circa £300 million, and with potential free cash flows of $150 million you would think there would be considerable up side from this.

Huge potential here, but its also highly frustrating waiting with limited updates from the company.

It is also 10 weeks since Andrew Knott stated that ' we shortly expect to complete the transaction, and i strongly believe it will have been worth the wait '.

Since then Buhari has formed a government, and deals have started to have been signed off / agreed. Ministerial consent could occur at any time now as the days go by.

I have brought more shares recently at 14,13, and yesterday at 12.6p, in an attempt to lower my awful average.

I wonder what Andrew Knotts average is. He must be seriously underwater atm. With any luck soon he wont be, and in that case i will be in a very good position.

GLA

Interesting article. Thanks for posting.

H i Paul. The company have been involved in Nigeria for over 2 years now working on this deal. So you would assume they would have gained a decent amount of knowledge and know how during this time to gauge whats achievable with in certain timeframes.

AK has put alot of money in here at 35p when the deal was financed along with institutions, so this does give me confidence the deal will complete. The big question is when ? At 12p its viable the share price could triple quite easily given whats on offer here. Not sure what the hold up is from May 31st, but they seemed very confident of immanent completion.

I think the uncertainty is spooking the market, but with a market cap at just over £100 million the risk reward looks very tempting here, with the discoverys in Niger, and the huge potential up side in Niger.

A positive update regarding funding going forward would be welcome atm, although feed back from the AGM indicated this wouldn't be required.

This is also the same lot that stated on 31/05/19 that we are 'Poised to reap the rewards of our strategy in Nigeria' and also ' Strongly believe the deal would have been worth the wait'.

Very bullish comments, and you would think the deal must be very close to completion, or surely you would not put out statments like that.

Personally im just very frustrated and angry with the wayward guidelines the company have set. Yes the deal looks excellent on paper, but just look at the share price and sentiment towards SAVP atm. If the share price doubled I would still be underwater from here.

And thats what annoys me the most. I could reluctantly except a large loss on operational failure, ie poor drilling results in Niger, but when the loss is due to poor decision making and multiple missed guidance on an RTO it makes it all the more frustrating.

I've been investing in shares since 2008, mainly Oil/ Gas and Mining, with some winners and loosers along the way, but this is by far the worst performing stock ive picked.

Not going to sell any at these prices, so I will sit it out and hope for the best.

GLA

Interesting posts Paul.

Considering the deal was financed with a placing at 35p, I would hope for a share price far above 25p if / when the deal completes. Potentially a great return for new buyers in the teens, but hardly worth the stress and wait having an average at 26 / 27p like myself. Some i am sure may have higher averages than this.

I can handle delays and appreciate its a complex deal, but this is bordering on a farce. Which is made even more frustrating with the company's coments regarding still anticipating completion end of Q2.

Surely they must have been aware of the pending election and the potential delays it could cause. Clarity would have been appreciated from the start of the year, rather than a number of very misleading RNSs.

Very very amateurish.

Some clarity will be required for me in the usual vague update RNS thats expected tomorrow.

I would like a detailed explanation of what the current hold up is, and when exactly they expect this to be resolved. Some serious questions also need to be asked at the AGM, such as what has changed since your last update on 31/05/19 to hold completion up. Unfortunately I cant make the AGM.

The backing of this deal from large institutions and the board still does give me alot of confidence, but its now got to the stadge where many shareholders are naturally concerned and starting to get very anxious.

Personally I did not invest for Nigeria. And I am currently very very annoyed with how this has panned out. If you are going to undertake a deal surely you want the deal to be as straight forward as possible, with a clear step by step plan to completion. If not dont proceed with it.

I didnt envisage when I first invested I would be worrying about the results of an election in Nigeria, or if an minister for petroleum is in place. Total madness. The board have put us in this position, and deserve a hard time at the AGM.

But if this deal completes very soon then they deserve the credit and rewards it should bring.

Lets see what happens tomorrow.

GLA

Positive write up on Niger. And since then 5/5 succeses. What a great asset Niger is.
News on a Partner for Niger would be most welcome atm.

Cant help thinking if only they stuck to their original strategy.

Markets and commodities rallying, and we still continue to drop. Truly awful share price performance.

Just waiting for the inevitable RNS update on friday. Or maybe they will deliver for once..

Savannah has announced this morning that good progress is being made on the Seven Energy transaction and following completion of the Nigerian elections the company remains confident that Ministerial approval will be forthcoming shortly and the transaction will be completed in 2Q 2019. The election has caused a minor delay with no fault to be allocated and the imminent completion along with an exciting programme in Niger bodes well for SAVP for the rest of the year.

This was almost 3 months ago, so i wouldnt regard him as very credible with his comments. No doubt expect further waffle, IF the the transaction fails to complete this week.

To finance the 7 deal, funds were raised at 35p, and were backed by the board and various institutions. Since then the deal has been improved significantly, and the company has carried out a very successful drilling campaign in Niger.

Since then the share price has halfed.

In the last update the CEO and Chairman stated that they expect the deal to shortly complete, and the wait would have been worth while.
Also the company is poised to reap the rewards from our strategy in Nigeria.

Surely you dont make statments like that If you don't think you can complete with in your latest guidance. Personally I would be hugely embarrassed if said such things, and again failed to finalise the deal before the AGM.

Considering the deal was finaced at 35p, I would expect this to be an absolute minimum the share price would be upon completion. Failure to meet this target and I think the boards credibility would be completely shot to pieces, and you would have to question their strategy, and ask weather it was worth the wait.

On the 31st May they stated completion by end of Q2. Not sure what would change in 3 1/2 weeks to change this, so trying to remain hopeful.

GLA

Confident comments from the chairman and CEO in the update on 31st May.

' we are poised to begin reaping the rewards of our strategy in Nigeria upon completion of 7E deal '

' shortly we will complete 7E transaction and I strongly believe that it will prove to be worth the wait '

Worth the wait..

2 years ago prior 7 deal announcement the share price was around 40p. Oil price below $50, and we had yet to drill in Niger.
What would the share price had been after 5 successful drills in Niger, and an improved oil price. Also possibly a second Niger drilling campaign completed ?

50p ? 60p?

For it to be worth the wait you would like to think upon completion the share price would be at least the above figures. Considering the uncertainty and anxiety this deal has caused to many investors.

Share price performance here has been atrocious, and like many here I am well in the red.

The last update did seem to indicate completion end of the month. So hopefully we will see a big uplift in the share price at long last.

This really is unbelievably frustrating. The 7 deal on paper looks excellent, but in reality its has hammered the share price, and held up operations in Niger due to the constant delays.
Sitting on a massive loss atm with the share price constantly drifting lower, all be it with lowish volumes. I certainly wasn't expecting this after the successful drills of last year.

It does give me confidence given the last placing at 28p included participation from the board and institutions. Plus the previous placings at 35p.

Desperately need some good news here soon, its been long overdue !

The company said alot of things,

Dividend payment, very confident on deal completion Q1, flow testing in Niger, possible farm out of Niger.

I added to my holdings further based on these points. My own fault, as I probably got to bullish on the company. I initially brought in for the Niger campaign, and held through 5 discoverys.
I am now sitting on an a 30 % loss despite the success in Niger, incredible really.

The share price is now lower since the depth of the oil price crash in 2016. Bearing in mind the progress made in Niger, it shows the possible value on offer at 20.5p. ( more shares in issue I know )

Totally fed up waiting for this deal to complete, and very very frustrated with the company on their guidelines. But if this does complete soon the share price could easily double from these levels.

GLA

Probably end of Q2, or if not possibly end of Q3...

I agree with your points. Completion end of Q1 was stated on several occasions, and the company seemed confident this date would be met.

To be fair the election was delayed by 1 week, so maybe a minor delay could have been expected, but to still have nothing after 5 weeks is pretty poor.

Hopefully moving forwards SAVP will let somebody else deal with the PR side of things, as Mr Knotts credibility for timelines / expectations is now questionable in my opinion.