Member Info for PaulCurtis

Peel Hunt reckon Gran Tierra who recently raised a war chest and have operations close to AMER.

The “Workstreams” are subject to legally binding conditions (with legally binding end points) which kick in upon Ministerial Consent. Hence I’m told no potential ‘ransom strips’. Accugas are on the hook and no reason why they would cause problems? They also receive a slug of cash upon completion.

Thanks, excellent summary.

I’d add I think the ring fencing is first two years but by then debt dramatically lower. And SAVP should be able to refinance at lower interest rate and defer repayments. This will boost cash flow.

Re your $269m cash, I was assuming cash neutral 2019, c $58m, 2021 and c$150m in 2022.

ie cash accumulates by $150m up to 2022 whilst $400m debt dramatically reduced, from memory to c $60m. All the while paying dividends of c. $13m

I hold too many for comfort and not selling. More likely to buy more on weakness.

I’m always more interested to hear the bear case in case I’m missing something

The bears say Deal won’t complete. I think very unlikely and as I kept asking on Twitter this morning, how does this play out when SAVP hold the Senior Bonds, the SS $28m and has full agreement with the 7E debt holders.

More likely is, if Cabinet not appointed in July, we might have to wait until Sept/Oct. Can SAVP agree bridge finance. They appear very confident that they can. If not, the bears salivate over a placing at knockdown share price.

Hopefully worst case but at what price? Say 10p? I’d pile in. Shares would bounce on this risk removed. So at 13p the risk reward attractive.

There is clearly an ongoing large seller, it appears trading outside market makers. I assume we are going down to a level where someone takes them out. How low do we go until this happens.....

I’m on Twitter, @Paulcurtis123, and discussing SAVP with Oilman Jim, Peter Brailey and AIM 4 Success.

All very bearish and arguing that SAVP either going bust or forced into equity raise.

At year end, SAVP had $15m revolving debt (Orabank) and had not drawn down on the $20m committed? Trade debtors of $23m (any idea what these are?) Plus received $22m from January raise.

Hence unless major cash outgoings last few months, they should be easily within the $20m? Unless the $20m is conditional on Presidental sign off? So why the bearish comments, backed up by selling?

This facility is only $20m committed of which $15m drawn at year end. The $30m balance is uncommitted

It’s Risky

You posted this last week
‘I was there when Andrew Knott said “there was no need for any funding, and that would still be the case in the very unlikely event that the deal hadn’t closed by end Q3.”
This possible funding shortfall appears the crux. After the Barclays note there are many who think shares in some sort of a death spiral ie the lower the price goes, the more dilutive the raise even if modest. Plus it’s never good to look remotely distressed in Nigeria.

Can you please elaborate on anything else said re funding shortfall. I believe Knott alluded to bridge financing?

Also an indication re how long current cash lasts?

Thanks

To what extent do you think ‘going Green’ has impacted our sector. How many Institutions are adopting a carbon neutral investment policy?

There are a lot of very unloved oil stocks at the moment where the selling pressures seems relentless. Wondering if a large fund turning green to keep its investors happy.

SAVP should get more fund support when it starts paying dividends. And Deal completion has to be a light switch moment!!!

My broker has checked around the market, offering to buy in size if any sellers out there. Market makers claim that not aware of any. Most seem as bemused as us!

But the selling continues....

Normally when a seller is cleared we get a good bounce as market makers, the first to know, load up in anticipation. This time I think they are already overloaded. Hence any selling now just hitting SETS.

Question is whether there is another large seller hitting SETS or whether today’s selling is nervous PI’s and stop losses. There must be a significant amount of stop loss selling

Does anyone understand the process from here?

Outgoing Petroleum Minister has signed Consent and now with Chief of Staff, happily reappointed.

Burhari can only sign off when Cabinet appointed. But is this the only roadblock? Just a formality and any delay down to the stack of documents on his desk. Hence only Robles would be if new Pet Minister reviews.

Upon sign off, Implementation Agreement activated and all the commitments within it become legally binding. ie principle terms can’t be renegotiated. The only outstanding issues are getting final versions of all the documents signed.

Anyone understand why not already signed, conditional subject to Consent? ie what exactly are they tying up?

Thanks, any idea re current value? I had about £25K in the early days, is this now zilch!

Much of today’s Sell appears old news
Edison said last note
“Incremental gas discoveries are required to infill our forecast risked demand through to 2022 but, based on SDX’s high exploration success rate (c 80% chance of success) and proposed 12-well drilling programme starting in Q419, we do not see supply shortfall as a significant risk at this stage.”

Hence analysis hinges on whether 80% CoS far too high?

Re NWG - Edison value assuming field abandonment year end 2020 so yes, it’s declining but in the market.

I definitely helped clear out one seller, only filled 75% of my order. Told that this was the seller behind today’s drop, 15p forced stop loss.

Surprised no bounce. All market makers appear to have full books because they say looks oversold. Hence suspect that can’t take on any more so any selling hits SETS. And there will some who bought in for a bounce/news last Friday plus general stop losses. Hence hopefully will stabilise Monday.

Can’t see any reason for selling - Niger pipeline improves farm out potential, no short term cash problems and SAVP still confident that transformation deal will be signed soon.

I’ve recently spent a lot of time looking at the 7E detail and it looks a cracker to me!

Can you pls say a bit more? I owned shares in Nordaq but thought they had gone bust. Was this a litigation settlement?

A couple of us have, hopefully finally cleared the seller, had c.2m left this lunchtime. Evidently he has been selling down since 20p. I paid 13.6p.
If this was the last of the sellers, we should now see a bit of a bounce. I’m not holding my breath, too many false dawns with this share, but can’t believe anyone non distressed/no stop loses selling at this level.
I had a brief chat with SAVP this morning, all seems okay.

“there was no need for any funding, and that would still be the case in the very unlikely event that the deal hadn’t closed by end Q3.”

Thanks. So this meant current cash lasts to end Q3, thereafter they can borrow?

Has anyone read the Barclays Note, 7p share price if No Deal or Deal delayed too long.

I can vaguely understand No Deal 7p share price but think SAVP should be able to salvage something via their 7E Senior Bonds and the $28m Super Senior loan which put them in a strong position. Nigerian Govt would have to nationalise the whole caboodle. But why 7p if Deal delayed? Assume fund raising (s) required to survive depresses share price.

But what are SAVP’s costs going forward. How much cash are they burning, especially now that just waiting on Minister?

Can it be more than say $10m pa to keep the lights on.

And farm out of Niger an option.

I’m hoping to get this Note anytime.

It’s been reported by attendees that Knott said no need for equity raise, they can borrow? Can anyone please confirm this and the context?

Thank Happy. The last Mirabaud note I saw, think the most recent, stated net debt at $400m and cash received on deal completion of $60m.

I assumed the $400m was net, ie $460m Total debt

But is the $60m for us to keep or ring fenced within 7E? I assume revenues are split, part for debt repayments and part to us. The $60m is our accumulated share which is increasing daily?

Thanks Zengas.

We may get $60m -$90m cash but we are also taking on board a large lump of debt? Circa US$400m but ring fenced?

Do your free cash flows allow for servicing/repaying this debt?

The Benin pipeline, once actually signed off, should significantly galvanise farm in partner interest. Do you know when it will be signed off? I thought still some debate on route?

Best Paul