Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Https://radiotamazuj.org/en/news/article/annual-budget-passed-amid-splm-io-walkout
Don’t wish to sound repetitive but the warring factions keep trying. They certainly are trying but hopefully one day they can agree to disagree first and foremost for the people of Sudan and secondly for us long suffering shareholders 👍
If anyone was wondering about Auctus Advisors (9 pages) as stated on SAVE’s Website - it’s merely their daily bulletin for lots of different companies and only 2 lines refer to SAVE which just states the obvious.
Zephyr Energy (ZPHR LN)C; target price of £0. 18 per share: Small equity raise to address capex increase and
production delay - Zephyr has raised £3.15 mm of new equity priced at 3.5 p per share. The funding addresses a shortfall created by the combination of an increase in capex due to the blow-out at the State 36 2 well in the Paradox
and a six month delay in bringing the Slawson wells in the Williston into production due to the related surface facilities buildout being late. Much of the additional cost associated with the blow-up of well State 36-2 will be
reimbursed by Zephyr's insurance but there is a lag between when the costs are paid by Zephyr and when Zephyr is reimbursed. As we incorporate the 5% equity dilution and a delay in production start-up in the Paradox from
4Q23 to 1Q24, we are changing our target price to £0. 18 per share.
R3 should provide around 5,000 barrels per day of production for Savannah, with plateau running for eight years.
China National Petroleum Corp. (CNPC) is on track to complete the Niger-Benin export pipeline later this year, Savannah Energy has said.
UK-listed Savannah aims to begin flow testing its Nigerien fields in the fourth quarter of 2023, it said.
The Niger-Benin pipeline is more than 75% complete. It should begin transporting oil commercially in the fourth quarter of 2023, Savannah said. The move will be “transformational” for Niger, the company said, with oil sales likely to increase GDP by 24% and exports by 68% in 2025.
Savannah will play a part in this export growth through its work on the R3 contract. It aims to begin testing production this year under its 35 million barrel field development plan. Results from this test phase should allow Savannah to reach first commercial oil production in the last quarter of 2024.
The company had previously been planning to sell crude domestically to the Zinder refinery. It changed its plan to focus on exports in 2022. Under its domestic use plan, it would have reached first oil in 2023.
Savannah ordered long lead items – bottom-hole pumps and completion equipment – for its R3 East development in the first half of this year. The project covers the Amdigh, Eridal, Bushiya and Kunama finds. It also identified a workover rig for the test programme.
R3 should provide around 5,000 barrels per day of production for Savannah, with plateau running for eight years.
Success at exporting Nigerien oil would open the door for additional developments. It has 90mn barrels of gross unrisked prospective resources at five prospects and leads within tie-in distance to the R3 facilities.
The company claims to have a bank of 146 exploration targets in its areas. It has made five discoveries from five wells in the Agadem Rift Basin.
In addition to its oil plans at R3, Savannah is also working on solar photovoltaic (PV) plans in Niger. In May, it signed a deal with the government to develop two plants, with capacity of up to 200 MW.
The company aims to reach project sanction in 2024 and then begin producing power in 2025-26.
It has also signed on to a 250 MW wind farm in southern Niger’s Tahoua region. Savannah also plans to sanction this project in 2024, starting generation in 2026. The company’s plans would see it generating up to 450 MW of clean power in Niger, equal to a 60% increase in available grid electricity.
https://www.energyvoice.com/oilandgas/africa/pipelines-africa/507631/niger-benin-pipeline-track-2023/
Savannah reported average FY22 gross production up 20% y/y to 26.8kboe/d (90% gas) from its Nigerian operations generating $290m revenues and $222m adjusted EBITDA to end YE22 with $405m net debt
The Company is currently focussed on closing the proposed $1.25b acquisition of PETRONAS' assets in South Sudan in 3Q23 and at least one further hydrocarbon asset deal.
Savannah plans to conduct a flow testing programme in 4Q23 on the 35mb R3 East field to provide data to optimise the FDP development plan in Niger, ahead of expected first commercial oil production in 2024.
The Company is targeting project sanction in 2024 on 525MW of hydroelectric, solar photovoltaic and wind projects in Cameroon and Niger, and aims to grow the pipeline to 1GW+ of renewable energy projects by YE23.
Savannah's key asset remains a significant controlling interest in a large-scale integrated gas production and distribution business that is currently supplying gas to facilitate almost a quarter of Nigeria's thermal power generation.
Despite the proposed nationalisation of the Company's recently acquired Exxon assets by the Chadian government, there are several other potential catalysts that management are progressing towards completion over the next 12M.
We look forward to further updates from its busy management team.
Part 2
Operational highlights for the year were similarly in line with our existing understanding. FY22A average gross production from the Nigerian operations of c.27mboepd was in line with our forecast and represented a 20% increase on the prior year. Unsurprisingly, Nigerian production continues to be dominated by the Uquo gas field, which accounted for 90% of total gross volumes.
As previously announced, four new gas sales agreements were added in Nigeria last year, with a contract extension for the GSA with FIPL also confirmed.
2
Importantly, Savannah has now secured new renewable energy projects with expected generation capacity of up to 525MW, meaning that it is now more than halfway towards its goal to have up to 1GW+ of renewable energy projects in motion by the end of this year - with existing projects already encompassing wind and solar projects in Niger, along with a hydroelectric scheme in Cameroon.
Our recent note (Filling the hopper in renewable energy - 11 May 2023) discusses the renewable energy division's strong progress in more detail.
Other post-vear end highlights include the acquisition of a c.41% interest in Cameroon pipeline company COTCo and subsequent deal to dilute down to c.31% with an agreed disposal of 10% to state hydrocarbon company NH. Savannah reports today that (in the first five months of this year) COTCo transported an average c. 137mbopd of oil, with a total of 21 liftings undertaken. Our model currently assumes gross daily throughput for COTCo of c. 129mbopd in FY23F, so this aspect of the business appears to be outperforming our expectations in the year-to-date.
Savannah's full FY22A annual report is now available on its website, including a particularly interesting section, in our view, discussing "Why we do what we do"
Ahead of publication of the AIM Admission Document relating to South Sudan (which we now expect in the third quarter of this year), we continue to forecast material organic revenues, profits and cash flow in FY23F - along with very manageable gearing levels.
Our last-published Risked NAV estimate is maintained at 45p/ share.
Part 1
This morning's FY22A results from Savannah were much as we expected, even if cash generation was somewhat better than we forecast. Total revenues increased by a robust 26% year-on-vear to US$290m (Shore Capital: US$295m) and significantly exceeded guidance, while adjusted EBITDA of US$222m rose by 27% year-on-year and was pretty close to our US$227m estimate. The adjusted EBITDA margin in the year was 77% - broadly unchanged year-on-year and exactly as we expected.
As always, there are plenty of moving parts within today's results, including operating and administrative expenses which were modestly higher than we forecast, and DD&A which was somewhat lower.
A key takeaway for us, however, was Savannah's cash generation in the year. FY22A operating cash flow of US$76m comfortably exceeded our US$66m forecast, while capex for the year totalled just US$24m (Shore Capital: US$35m). Such measures combined to give closing net debt of US$405m, meaningfully lower than our US$441m forecast.
Ahead of forthcoming publication of the AIM Admission Document relating to the major South Sudanese reverse takeover transaction (now anticipated in Q3), we will leave our FY23F forecasts unchanged for now, but see these as being well underpinned given the recently-announced third party gas sales and purchase agreement with AMOCON in Nigeria, and results today which contained no real surprises.
Savannah takes the opportunity to reiterate the growth that it has been achieving from its Nigerian upstream and midstream businesses, which have delivered compound annual growth in total revenues of 21% (and doubled the number of customers supplied since their acquisition in FY17A.
CEO Andrew Knott lays out five key objectives for FY23F, including (1) completion of the company's proposed South Sudanese reverse takeover transaction in the third quarter of this year; (2) "at least one further hydrocarbon asset deal"; (3) reaching the targeted delivery of up to 1GW+ of new renewable energy projects by the end of this year; (4) flow testing at R3 East in Niger; and (5) refinancing of Savannah's Nigerian debt.
All of these objectives are consistent with our existing understanding and expectations, even if the narrative surrounding point number two does seem to imply, in our opinion, increasing visibility at the company on hydrocarbon acquisitions to potentially follow South Sudan. We will eagerly look forward to further updates relating to such potential follow-on deals in due course.
We note Friday evening's update from Savannah, which in turn notes a news release from Cameroon pipeline company COTCo clarifying an earlier statement by the Republic of Chad.
COTCo's full release can be found here although, in summary, we believe that this provides considerable reassurance with regard to Savannah's holding in COTCo (following the Republic of Chad's earlier statement on Friday).
Ahead of publication of the AIM Admission Document relating to the major South Sudanese reverse takeover transaction, we continue to forecast material organic revenues, profits and cash flow - along with very manageable gearing levels.
Our last-published Risked NAV estimate stands at 45p/share.
Part 3
When contacted for further information, Attorney Michel Voukeng, a member of the group, revealed that the June 2 hearing has been postponed to June 7 to allow for the submission of evidence. He did not disclose the identities of the clients he represents but mentioned that they have opposing interests to Mr. Soumahoro.
According to reliable sources, the challenge to Mr. Soumahoro's interim position comes after the dismissal of at least four directors of Cotco within a week. Attorney Michel Voukeng questions whether, even as an interim CEO, Mr. Soumahoro has the authority to do more than handle day-to-day affairs and whether he can terminate executives appointed by the Board of Directors.
Regarding the disputed statement from the CEO of Cotco, which supports Mr. Soumahoro as the interim CEO, the lawyer argues that Nicolas de Aubin de Blanpre himself does not have the authority to act as the CEO of Cotco. Firstly, he points out that the resolutions made during the Board of Directors meeting on May 24, 2023, in Paris, need to be authenticated by a notary to have legal effect in Cameroon. Additionally, this appointment still requires ratification from the General Assembly and validation from the Minister of Employment through the signing of the employment contract, per the law. "You cannot transfer something you don't possess yourself," says Attorney Voukeng. Furthermore, he notes that Mr. De Blanpre himself has been dismissed by the majority shareholder of Cotco, which is the Chadian oil and gas corporation.
Part 2.
Despite this, Chad has asked banks holding Cotco SA accounts in the Cemac zone, as well as the Cemac central bank (Beac) to block fund transfers requested by the dismissed directors, particularly abroad. “The fund transfer restrictions do not concern the payment of the salaries of Cotco SA's Cameroonian and Chadian employees, as well as the taxes and social contributions owed to the administrations of Cameroon and Chad," the statement read.
On its side, Savannah Energy is also holding tight. Nicolas de Blanpre issued a press release on June 1, 2023, in which he presented himself as the company's CEO, despite Chad's protests. "(...) Mr. Soumahoro Khalif Allah Ahmed is currently acting as interim CEO for Mr. Nicolas de Blanpre, under a special delegation of authority dated May 24, 2023. Within the framework of this interim assignment, Mr. Soumahoro Khalif Allah Ahmed has full powers to represent the Managing Director and to commit the company," he wrote.
Tense social climate
Nicolas de Blanpre made that statement because the position of the Acting CEO is also opposed. Indeed a group of lawyers challenged Mr. Soumahoro's appointment in a June 1 statement. They argue that Mr. Soumahoro Khalif Allah Ahmed cannot serve as the CEO, even in an interim capacity, of Cotco because Mr. Nicolas de Aubin de Blanpre was appointed as the director and CEO of Cotco on May 24, 2023, by the Board of Directors. However, this appointment is subject to validation by the General Assembly and the ministry responsible for Employment, considering regulations regarding foreign workers. The lawyers also mention that a legal opposition has been authorized against all the actions and official communications of Mr. Soumahoro Khalif Allah Ahmed Stéphane and the requested nullification of these actions will be examined starting from June 2, 2023, by the court of the company's registered office.
Tense social climate
Nicolas de Blanpre made that statement because the position of the Acting CEO is also opposed. Indeed a group of lawyers challenged Mr. Soumahoro's appointment in a June 1 statement. They argue that Mr. Soumahoro Khalif Allah Ahmed cannot serve as the CEO, even in an interim capacity, of Cotco because Mr. Nicolas de Aubin de Blanpre was appointed as the director and CEO of Cotco on May 24, 2023, by the Board of Directors. However, this appointment is subject to validation by the General Assembly and the ministry responsible for Employment, considering regulations regarding foreign workers. The lawyers also mention that a legal opposition has been authorized against all the actions and official communications of Mr. Soumahoro Khalif Allah Ahmed Stéphane and the requested nullification of these actions will be examined starting from June 2, 2023, by the court of the company's registered office.
Part 1.
Business in Cameroon) - Nicolas de Blanpré, the former head of the Chadian subsidiary of British Savannah Energy was appointed MD of the Cameroon Oil Transportation Company (COTCo). The information was made public this week by Savannah Energy, which claims to have acquired the assets of American multinational Exxon Mobil in Cotco.
The twist here is that the newly appointed MD was expelled from N'Djamena, Chad, in December 2022 following a conflict between the British oil company and the Chadian government. The dispute was over the takeover of Exxon Mobil's assets held by Esso Pipeline Investments Limited (EPIL) in the Doba oilfield in the southern region of Chad and the Chad-Cameroon pipeline.
In a statement released Friday, the Chadian Oil Ministry made it clear that “as majority shareholders of Cotco SA, the Republic of Chad and SHT (the Chadian oil and gas corporation) will take necessary measures, in consultation with Cameroonian authorities, to swiftly appoint a new CEO for Cotco”. Following the green light given last month by the Cemac Council of Competition for the acquisition of Petronas Carigali Chad Exploration & Production Inc. by SHT, Chad (both SHT and the government) now holds a 53.77% stake in Cotco. And based on this shareholding, the county now has the power to name the leaders of the company.
On the day Savannah appointed the new CEO for Cotco, a General Assembly of Cotco took place in Paris, resulting in several significant decisions.
Firm opposition
During the General Meeting, which "was held despite the many time-wasting tactics by Esso Pipeline Investments Limited (EPIL) allegedly owned by Savannah Energy (...), to have it postponed", the Chadian Ministry of Hydrocarbons points out, several decisions were taken. The participants have decided that all the directors of EPIL (Savannah Energy, ed) will be dismissed with immediate effect and that almost all the draft resolutions previously proposed by EPIL, including the resolution proposing the allocation of profits and the distribution of dividends for 2022, will be removed. This means that no dividends will be distributed for 2022.
"As EPIL (Savannah Energy, ed) is no longer a member of the Doba field consortium in Chad, it no longer has the right, under Cotco SA's articles of association, to hold shares in Cotco SA", the press release explains. But what the statement did not mention is that although Chadian authorities dispute Savannah Energy's takeover of EPIL's assets in their country, the case is still pending before the International Court of Arbitration of the International Chamber of Commerce in Paris. A clear verdict has yet to be given.
I just can’t get excited about the SS transactions at present until the warring parties in Sudan find common ground for a permanent cease fire.
‘The fighting between rival military forces comes as truce talks mediated by the US and Saudi Arabia collapsed.’
https://www.bbc.co.uk/news/world-africa-65777311
Chad steps up drive to force UK-listed oil player out of country
African nation’s government removes all Savannah Energy directors from company controlling key part of Chad-Cameroon oil pipeline.
Chad’s government has up the ante in its long-running campaign to force London-listed Savannah Energy out of the country, by removing its representatives in a company holding a key stake in a pipeline that exports Chadian oil to world markets.
https://www.upstreamonline.com/politics/chad-steps-up-drive-to-force-uk-listed-oil-player-out-of-country/2-1-1460821