Malcy's Blog10 Jan 2018 14:41
http://www.malcysblog.com/2018/01/oil-price-savannah-tullow-soco-finally/
On Monday I attended the Savannah General Meeting which apart from doing the mandatory technical stuff, enabled us to listen to AK giving the first full presentation on the deal, my comments are below but I urge you to take a look at the full presentation which has some great graphics I just can�t reproduce here.
Post the deal SAVP looks like the real McCoy as a full cycle, self funded E&P company. The existing acreage in the highly prospective Agadem Rift Basin in SE Niger is about to be tested as the three well drilling programme is iminent and will give us a good idea of the prospectivity there. The deal means that the company is about to acquire interests in the Uquo and Stubb Creek oil and gas fields as well as a 20% interest in the Accugas midstream business in SE Nigeria. As I said this will make Savannah into a �cash flow generative, full cycle E&P company capable self funding all operational activities and paying a dividend�.
The acquisition gives net 2P reserves of 92 mmboe, 2C resources of 44 mmboe and net production guidance for 2018 of >20/- b/d of hydrocarbons. Accugas comprises a 200 mmscfd gas processing facility and a 260 km gas pipeline network capable of supplying c.10% of Nigeria�s power generation capacity. The process has led to the company raising $125m of equity capital from new and existing shareholders which is a testament to the deal that the management have brought to the table. The scale of this acquisition is significant and should not be underestimated, SAVP�s management have taken advantage of limited competition in the area, seen Seven in distress and completed some deal. In paying $280m to acquire assets with a CPR valuation of $663m and �material� upside potential shareholders should be delighted, this is a �unique opportunity� to acquire a substantial asset package� There is no doubt that this is a transformational deal for SAVP and its shareholders both in terms of assets and production acquired at an incredibly low cost and comes with beefed up staffing including directors and investors and will be a welcome addition to the bucket list. I look forward to interviewing Andrew Knot on Core Finance before long.
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