Member Info for PaulCurtis

I’m hoping Stubb Creek is generating +ve cash flow but the oil element likely to be cash flow -ve. Oil price achieved will be significantly under spot price.

I’m nervous because SAVE did not mention Stubb Creek in the last update and normally no news is bad news!

Re sellers my guess is 7E bondholders liquidating D4E shares received at deal completion.

I’d hoped the overhang cleared at start of year when’s market maker sorted out a very large block trade at just over 20p. I suspect any business in Nigeria holding £/$ denominated shares is a likely seller.

IMO the principle thing we should watch out for is Govt receipt of the the International bail out package. Hopefully imminent

Some great posts over the w/e, both SAVE + and -ve. This is exactly what makes these forums so great. Especial thanks to Zengas as always.

Just listened to the audio cast, thought AK sounded absolutely shattered.

My take, fwiw, is that SAVE finances are very tight. eg ‘Challenging times’ and ‘all stakeholders, customers, transmission company being very supportive’. However, he did say that SAVE has ‘maintained and significantly improved’ cash collections but this is pretty meaningless without more detail re outgoings etc.

This is all pretty much what we were expecting. As I said on Friday, the Nigerian Govt have to keep SAVE alive and the most reassuring point Knott made was re the strategic importance of their 10% + gas supply in terms of staving off political unrest, especially with everyone stuck at home. The Nigerian Govt will be very concerned about this, hence they simply have to pay SAVE enough to keep the gas flowing.

Hence, perversely, although I suspect SAVE is having a nightmare re payment arrears. they are one of the better placed to survive. Too big to fail!

And we always have the backstop of the Guarantee but I suspect SAVE giving Nigerian Govt time to sort out/receive an International financial aid package.

I’m still disappointed/nervous that Friday’s update didn’t outline their measures to respond to Covid. It is the elephant in the room and clearly a major challenge.

This is not about a £52m write down but cash flow and survival in a dire market.

Nigerian Govt likely to pay enough to keep SAVE operating since mutual benefit, at least until crisis over. And they have world bank guarantee in reserve

Inter

Agreed, we need to know arrears at date of completion. If similar, the cash flow should be okay assuming no new outgoings?

Need to clear the big seller, an ex Green Energy Bondholder?

Interzone

“My personal thinking is that there have been issues with payments and SAVE have been waiting for these to be sorted out as much as possible before releasing an update”

I agree. However this is now about transparency. When every other O&G has issued Covid updates, for better or worse, the SAVE BoD lose credibility if the only one not to be honest with Shareholders. I think we all agree that the shares already discounting payment delays, trouble is we are now also factoring an insouciant at best, duplicitous at worst BoD.

The bottom line is that just about every other oil company has bothered to issue an update! Forget whether good news/bad news - this is about accountability to shareholders. When you are the ONLY BoD hiding behind behind the sofa you destroy your credibility.

As many Institutions move away from O&G it’s madness to undermine your PI base.

Goldman’s turn +ve on oil, sparking sector rally

https://markets.businessinsider.com/commodities/news/oil-price-buy-energy-stocks-why-goldman-lists-reasons-plunge-2020-4-1029139451

Excluding SAVE of course , still flat on it’s back thanks to insouciant BoD. If they are hiding bad news, it’s going to have to be sensationally bad to justify shares going lower from here.??

This lack of transparency really irritates me. I know results are due soon but there is no excuse for no interim update in view of these exceptional times.

Directors only hold c. 3% so must be very confident of institutional support come the AGM. Be interesting to see how the voting goes, especially re remuneration.

Thanks Zengas. In my experience if it looks like a duck, walks like a duck and quacks like a duck, then most times it is a duck.

The lack of a Covid update looks like not getting paid!

But still begs the question, why haven’t they invoked the Guarantee? Implies working on something....... Am I correct in assuming that the Guarantee is time limited 12 months and only about 80% of revenues? Hence a last resort?

On SAVE’s web site dated 10th March.

https://www.savannah-energy.com/downloads/March%202020%20-%20Capital%20Access%20-%20Savannah%20Petroleum%20Plc.pdf

Interesting because one assumes pretty much written by SAVE and ties in with positive noises via Twitter. However no mention of the World Bank guarantee backstop.

The elephant in the room is whether SAVE still being paid by a Nigerian Govt in a Covid/low oil price induced crisis? One assumes sporadically at best, otherwise they would have updated.

The lack of an official Covid update demonstrates unrivalled shareholder indifference unless SAVE working on a magic bunny to pull from the hat. The Note refers to in country refinancing but on the face of it, this seems as unlikely as new gas contracts.

However, refinancing to allow a capital/interest holiday may be the angle but can only be achieved via World Bank or equivalent? Local banks will have more pressing concerns.

Thanks Zengas and others

I’m not sure which is worse, SAVP sitting on bad news or sitting on good news (ie solvent/being paid) but showing total disregard for shareholders with no Covid update. I will be more annoyed if the latter since I’m expecting the first!

SAVP has the dubious honour of being the only share I own (about 15) which has not updated the market since Covid hit the fan. Roll on the AGM, we won’t be able to complain in person but there should be some suitable platform

Zengas

Being paid or being paid sporadically and in significant arrears? Did he clarify?

Thanks

The only justification for no Covid update is that might be politically sensitive. ie SAVP trying to appease Nigerian Govt. I note G20 have now agreed debt defaults till year end in order to help countries such as Nigeria to cope. This should help Govt cash flows although reality is that defaults looked inevitable whatever

However this an unprecedented situation and I can’t see why Govt would be ‘offended’ if SAVP spelt out current situation and explained the process of invoking the World Bank Guarantee, if only as a safety net. Anyone know how this Guarantee is triggered? I assume have to issue default notice after x months of non payment.

The concern is the debt pile that SAVP took on board with 7E deal. Maybe they are renegotiating this.

Whatever, why can’t they say what’s going on! We all understand that there are massive sector problems, hence share price down nearly 75% from year highs. Leadership is about being open and honest at such times, not alienating shareholders by appearing contemptuously indifferent.

Time will reveal why no update but unless damn good reason, many of us will sell out into next bounce post AGM vote!

This market is all about surviving a few months of possibly very low oil prices and/or maybe $30 - $35 for rest of year.

Demand destruction has been phenomenal but at current oil prices, supply is going to fall off a cliff. The calculation is OPEC/G20 have slowed the rate of fill of storage capacity but everything hinges on demand slowly recovering at same time as supply destruction begins to kick in. Needs to balance before we hit full capacity. I suspect further cuts will be required. Important to remember that actual price achievable is at a very significant price to the dated price on our screens. And in certain locations where storage near capacity the price could be sub $10.

The great thing about SAVP is that revenues mainly gas so we just need to get paid! Or be reassured that World Bank Guarantee still our safety net. It’s possible that Nigeria will benefit from G7/IMF debt relief and SAVP waiting on this.

Thanks Longshort

SAVP the only share I own that has not provided a COVID update. So why no update, if only to say the lights are still on! I still suspect they are suffering significant arrears on gas payments. However Jimmy Lea implying not an issue.

Very odd, if waiting on a good news update (eg Niger CPR or more gas sale contracts) announce reassuring Covid update now (ie SAVP not in distress) and then the good news a few days later. Then we get two bounces.

Directors are losing a great deal of PI goodwill. Anyone know which directors, if any, seeking re-election at next AGM? Finals out end of next month.

Too early to say. Everyone can see the storage precipice and common sense /mutual self interest should mean they avoid it.

G20 need to join the party, should be today. Hopefully everyone done the maths correctly

Niceto

You say

eg Paul Curtis wrote ''The next RNS will state that the Guarantee now invoked. Clearly a very delicate matter and SAVP can’t give any update now - the only question we will be asking is are you being paid for the gas.''

The context was that SAVP confirmed that invoking the Guarantee was a notifiable event. Hence, they clearly hadn’t invoked it

My concern was/is that with oil price so so low, Nigeria unable to pay for its gas. Hence no RNS’s because not being paid and therefore next RNS would be invoking Guarantee. Hope I’m wrong. Finals end of May when all must be revealed

Final Results should be out in May. There still appears to be a large seller holding price down. Same with Pharos Energy. Everyone who was going to buy has bought and now waiting for clarity from SAVP that nothing seriously wrong.

Frustrating to be missing out on improving sector sentiment but unless Company updates re gas payments, it looks like we are going to be stuck here for a month.

No point wiping out Shale because you will simply wipe out the debt, the assets will be restructured via D4E or purchased by larger oil company.

This applies in general to the sector - I bought EnQuest bonds yesterday at 24p. I hoping worst case is a D4E.

Russia is better off leaving the walking wounded struggle on, handicapped by their debt.

I was expecting cuts by now, everyone can see the precipice ahead as storage runs out. Cuts are needed pretty soon to at least slow the rise in storage, buying more time for economic recovery. The cuts must still be of such magnitude that will need G20 on board. I’m assuming we are in a game of poker and of the three principle players, Putin is the best player with the best hand

Can Nigeria afford to pay for it’s gas with Brent at $22 and in midst of Covid crisis.

Only option is to trigger the World Bank guarantee but at same time maintain political goodwill - Nigeria can not be blamed/down rated when everyone in the same boat.

Hence are SAVP processing this? The next RNS will state that the Guarantee now invoked. Clearly a very delicate matter and SAVP can’t give any update now - the only question we will be asking is are you being paid for the gas.

Nigeria has obviously been mothballed until international travel resumed and oil price crisis resolved - my guess is that, in view of the size of the cuts required, Russia and Saudis believe that the G20 producers must also be involved. Hence they are waiting until all parties desperate enough to sign up. Don’t know how the USA will contribute but they will. Whatever they do will involve throwing the rule book out the window.

I thought Sailplane’s Oilprice link offered a fascinating solution for the USA although would result in a trade war...?