Member Info for PaulCurtis

Zengas

I agree but an update would increase volume to help clear sellers, allow nervous shareholders an opportunity to price average down and above all, help us sleep better!

I’m nervous about risk of defaulting/losing Niger Licences if work temporarily mothballed? I know we had satisfied commitments as of last year but this year?

World Bank Guarantee should allow SAVP at least a years grace which should be more than enough. I’ll be amazed if oil price not significantly higher by Xmas.

Nigeria non payment a real risk if oil sticks at

You may be correct that SAVP at be wanting price low to clear out loose B/Hs but a reassuring update would greatly increase volume.

Multiple companies have issued trading updates over last few days such as WEN, TRIN and JADE. Can you name some more? Will try to ‘shame’ SAVP into an update although I suspect there is little happening right now re Niger farm out.

However this is the time to reassure that we can survive low oil and, if issues re Accugas deferred payments, that we can mothball Niger without risk of losing licences. Cash is King right now. At least we know the World Bank Guarantee undrawn so that buys c. 12 months?

With the shares at 8p (hopefully just sector carnage - Shell £13!/10% yield!) this is all about surviving with assets intact. IMO farm outs and new gas sales would be lovely but quite frankly I don’t give a damn!

I can confirm that the Guarantee has not been invoked. This would have been a material event.

I said that other oilies were issuing updates to reassure their suffering shareholders that they can weather the storms. We’d like one as well please, assuming it’s not of the jumping of a cliff variety.

The $118m is correct
http://documents.worldbank.org/curated/pt/189151501855342963/pdf/ITK425962-201707040958.pdf

Invoking this must be material so I think we can be reasonably confident that this is not the case.

Apologies for being late to this but has no one asked SAVP?

Do you have a link to this article?

I’ll be amazed if we get imminent Niger farm out. The world is grinding to a halt, travel restricted, new finance frozen and potential farm in partners will be sitting on their hands watching the oil price.

I’m afraid that patience is required. The good news is that Nigeria is predominantly gas revenue and we are therefore to some extent protected from oil price.

You would have thought the share price is now grossly oversold even factoring in the above but I’ve never been any good at calling the bottom!

Now back to watching the Baker Hughes US Shale rig count weekly updates. Oil demand has temporarily fallen off a cliff but assuming we are over the worst of CV within 3 - 4 months without too much collateral damage (trashed economies) , the destruction to medium term supply likely to be even greater.

What’s the point of an update? There is clearly a large loose seller, my guess left over 7E bond holder.

Painful though it is, best get share price to a level that clears out seller. ie sucks in large buyer. I thought this was done at c. 20p a couple of months ago. A broker put together a consortium to buy out overhang and we had c. 60m traded

Agreed, if SAVP were confident re obtaining Bridging Finance before, this must now be even easier. Assuming it’s required which is now unlikely - I’m told should be about a month to conclude Implementation Phase.

Wonder if a few shorter being squeezed today.

I think the current price reflects SAVP’s cash position, or rather lack of. Market fears a placing although SAVP claim bridging finance available. Upon Presidential sign off, bridging should be a cert.

Let’s assume worst case. Don’t need to raise much and shares will bounce when completed. Hence not too dilutive from here.

The other concern is obviously Nigeria! Investors fear corruption and SAVP rolled over, especially since Deal looks sweet. That $90m of cash will have a few crooks eying it up! Mirabaud said we may not get the full $90m day 1 but they are very confident that Deal will complete. SAVP has too big a foot in the door, barring something absolutely outrageous such as Nationalisation

Thanks.

As I posted, the concern was more that President’s priority was to nominate Cabinet and this would delay final sign off. Now that he has done this, it is hoped he will focus more on catching up with paperwork. The Siemens sign off on Tuesday was cited as an example of business getting back to normal.

Also, another source told me that Knott was in Abuja earlier this week, may still be there for all I know. I’m sure he’s doing his utmost to oil wheels. Theoretically sign off could be today or anytime thereafter! I’d be amazed if this drags on into H2 August, after all, it’s a big deal (10% of Nigerian gas), but then this is Nigeria

Just clarified with Company that we don't need Cabinet to be ratified!!!

The President has the Recommendation from the Outgoing Pet Min. He can now sign off whenever he wants. The only issue with the Cabinet nominations was that would have been President preoccupied. Hopefully his desk a bit clearer now. So imo we could get news of sign off anytime.

The Implementation Phase should take about one month.

I clarified a couple of other things and now feeling very relaxed, famous last words!

@paulcurtis123

I took out 1.5m, I was bidding for 2m. The balance has gone to another buyer and the MM putting the deal together took some for his book. Im told the other buyer ongoing plus another buyer out there.

So let’s see. If this was the last of the sellers we will end up over 12p. But so many false dawns so far that I’m not holding my breath.

FWIW I’ve cleared out one seller at 11.6p. Was scaled back so possibly for real!

Before you all slit your wrists, remember this from Finals

‘Our focus in Niger in 2019 will be on testing the Amdigh-1 discovery, delivering first oil from our R3 East EPS, and commencing a further exploration programme in the second half of the year, potentially with a partner.. We expect this process to be one that adds significant value for all of our stakeholders.’

SAVP clearly in talks and motivated to conclude a deal. The only problem is whether farm in partner views them as ‘over a barrel’ and offers low ball terms or insists on farm out including core assets. However, wearing rose tinted, the terms could illustrate the value of Niger and possibly include a bit of cash up front. Especially if core thrown into pot.

Looks okay
According to Article 9 of the PSC, during the Initial Period, the Contractor undertakes to execute the following Minimum Works Programme: (i) acquisition, processing and interpretation of 2000 km of new 2D seismic profiles whose 2/3 at least shall be effected on the Block R2; (ii) acquisition, processing and interpretation of 1000 km2 of new 3D seismic profiles whose at least 50 per cent. shall be effected on the Block R1; (iii) drilling of 5 Exploration Wells to a minimum depth of two thousand, five hundred (2,500) metres with at least one (1) well in each of the Block R1 and Block R2.
If a renewal exploration period is granted (each of which is up to two years in length), the Contractor shall implement the following Minimum Works Programme:
• For the first renewal period: (i) acquisition, processing and interpretation of 1000 km of new 2D seismic profiles whose 2/3 at least shall be effected on the Block R2; (ii) acquisition, processing and interpretation of 500 km2 of new 3D seismic profiles whose at least 50 per cent. shall be effected on the Block R1; (iii) drilling of 2 Exploration Wells to a minimum depth of two thousand, five hundred (2,500) metres with at least one (1) well in each of the Block R1 and Block R2.
• For the second renewal period: (i) acquisition, processing and interpretation of 500 km of new 2D seismic on the Block R2; (ii) acquisition, processing and interpretation of 500 km2 of new 3D seismic profiles whose at least 50 per cent. shall be effected on the Block R1; (iii) drilling of 2 Exploration Wells to a minimum depth of two thousand, five hundred (2,500) metres with at least one (1) well either on Block R1 or Block R2.
If the Contractor fails to satisfy the Minimum Works Programme obligation either at the Initial Period or if due to the total renunciation or the withdrawal of the EEA during these periods, the works have not achieved the minimum undertakings required for that period, the Contractor shall pay the Government, as a lump sum payment, within thirty (30) Days after the end of the period concerned, the effective date of the total renunciation or the date of the withdrawal of the Exclusive Exploration Authorization, a penalty equivalent to: (i) one million (1,000,000) dollars for each undrilled Well; (ii) eight hundred

Very good question, anyone know?

I can’t see anything re Licence work commitments/time frame?

Significance of this?

‘The Edo House of Assembly have about a week to come up with the proper election of the principal officers.

“If in a week nothing changes, perhaps the House and the National Assembly as a whole would look at invoking section 11 of the constitution,’’ he said.’

But what can Knott do? We are at the mercy of Buhari.

Would be interesting to hear why, on 31st May, SAVP were still confident of Q2 completion. What assumptions were they making re new Administration being in place.

But dilution for anyone buying down here is pretty minimal?
How much would they need to raise? $10m? About £8m. At 10p market cap about £90 that’s less than 10%.
Hardly a disaster in view of potential upside.
Of course the risk is that they need to raise a lot more for some reason unbeknown to me? Anyone any ideas?

SAVP are not going to walk away. They own 7E bonds and $28m SS loan. I don’t see how they lose out unless 7E nationalised. This is unlikely!

IMO worst case is Consent delayed until near YE, SAVP can’t get Bridging Finance, share price continues falling and SAVP forced to fund raise to keep the lights on. My understanding is cash burn c. $10m so don’t need to raise much. And any placing should be oversubscribed since shares will bounce once finances sorted. I’d pile in at 10p.

Also this assumes no Niger farm out in the meantime.

You wonder if this is being shorted but this appears risky since Company confident that they can sort bridging finance.