Member Info for Porschefund

Probably an illogical reaction to a 5% drop in Brent.

https://www.investorschronicle.co.uk/news/2021/03/25/the-name-s-bond-cheap-bond/

Interesting article in Investors Chronicle regarding resources companies using heightened demand from bond buyers to take on cheaper debt

"Savannah Energy (SAV) got itself a great deal in 2017 by buying out the rest of Seven Energy’s creditors as the company ran into financial difficulty.
Taking control of the Nigeria-focused oil and gas company in 2019, the takeover was done at a good price for Savannah and the company has gone from no sales and a cash loss of $13m in 2018 to forecast cash profits of over $120m in 2020 and 2021.

It has taken on a significant amount of debt in the transaction, but has managed to drop this from $484m at the end of 2019 to $409m as of 31 December.'

https://www.proactiveinvestors.co.uk/upload/SponsorFile/File/2021_03/1616063609_17.03.21-Corp-Pres-Jan-2021_vF-Proactive-One2One-Virtual-Forum.pdf

Agadem- I have just received a notification from Companies House that Jessica Ross is no longer a Director of a couple of SAVE subsidiaries. That may answer one of your questions.

Six to one in favour of sells and only down 1.77%. I wait with bated breath for the 2m late buy. TR1 soon?

" perhaps we're only in the intermediate 'buy me handbagS' stage currently?"
Otherwise known as the the Pursefund. LOL

Erb. I have TXP in both a trading account and ISA with Hargreaves Lansdown and didn’t need to fill in any Canadian taxation paperwork. Not sure why you are opening your ISA with AJ Bell but if you have both trading and ISA accounts with the same provider it makes it much easier to Bed and ISA in the future:

http://www.proactiveinvestors.co.uk/register/event_details/325

"No one will take the debt on if we are still making a loss"
I beg to differ- because of the accounting treatment of the difference in the value of gas actually taken and the customers contractual TOP quantity, it is feasible to make say a $10m loss but achieve FCF of say $130m. The difference recorded as a creditor on the Balance Sheet and either repaid in future gas supplied or written off if not taken by an agreed date. A future lender will look at debt serviceability from cash generated.However I do agree that the audit report (for what its worth) will give a future lender some comfort, or at least someone to sue if it goes wrong!

Snaffleman- From the 2019 AR (page 156)- this is the principal debt:
Accugas Limited has a bank loan facility amounting to US$382.1 million. Repayments of principal commenced on 31 December 2019 and will continue semi-annually until the final maturity date of 31 December 2025. Principal repayment amounts are calculated as a variable percentage of the facility outstanding, increasing over the life of the facility, with 3% of the principal repayable in 2019 and a final principal repayment of 49% at final maturity in December 2025. This facility incorporates a cash sweep to accelerate repayments subject to certain minimum cash balances. The facility carries an interest rate of 10.06%, plus three-month US LIBOR per annum to 31 December 2019, at which time the interest rate increases to 10.49%, plus three-month US LIBOR per annum.

Dolly birds and the wife? I suppose someone has to do the cooking and cleaning.

Spoke to one of the traders from Spreadex this morning and they are in discussion with their banks regarding their liquidity requirements for TXP. They have not yet made a decision on following IG by increasing margin requirements but he couldn't rule it out. He said all affected account holders would be notified in due course.
As Trek posted probably spooked by Reddit or maybe by the massive test results about to drop!

An interesting article on the economic development in Akwa Ibom State.
Governor Emmanuel Udom was also the subject of a Q & A on page 32 of the 2019 AR.
Also references to the Ibom Industrial City and the $4.2bn state and country’s game changing Ibom Deep Seaport.

https://www.vanguardngr.com/2021/02/the-silent-industrial-revolution-in-akwa-ibom/

Agreed Snaffleman- When I think back to Guy Fawkes Day 2018 when I bought my first tranche of SAVE shares for 31p I thought they would rocket when the 7E deal completed.
At that time the market valued the company at £253m. 27 months later after near trebling from the low point of 6p, the market only values SAVE at £172m.

This is despite proving to the market the FCF it can generate, its ability to repay debt and that it is delivering on its Nigerian market penetration.
Oh and I nearly forgot Niger the way the rest of the market has!

It’s only a matter of time before the market wakes up to the opportunity here.
The lows in the last 12 months gave me the opportunity to average down significantly and it’s very nice to now be in profit.

It is clear from Friday evenings RNS that the Directors are very confident of the company’s future, as am I.

Canada likes the news a lot. Up 6%!

To me this is a highly important step for Savannah which should add significant added value to its model for a number of reasons. The point about it being Savannah’s first gas-to-CNG sales agreement should not be missed, the CNG will initially substitute diesel in Mantrac’s (part of Mansour Group) generators who are also one of the world’s largest dealers in Caterpillar machinery, power systems and equipment.

However, more is expected as Mantrac has synergies in Nigeria through conversion of its existing customer base of C. 400MW of diesel-fuelled generators. Overall this is expected to provide Mantrac customers with ‘up to a 40% saving in energy costs and a 30% reduction in their carbon footprint’. This looks to be a profitable win-win contract with a major league customer and will be just the start for SAVE in its gas sales in Nigeria and importantly I predict long term, substantially rising volumes and profits.

The shares may have doubled since the low last year but this constant flow of excellent news must surely make the price today a bargain when the market gets to grips with the massive upside potential. A market cap of only £163.41m is surely a travesty given the upside on offer and this has only just started…

Accugas, SAVE, AIIM and SUGL are numbers 3 to 6 on the list of defendants and the last paragraph of the article states that:
“The court’s being asked for special damages against the Seven Energy International Limited Company and the 7th-14 respondents in the sum of$14,740,123.94, to the petitioner for the fundamental and substantial erosion of the equity and value of the petitioner’s shares”

That suggests to me that whilst SAVE etc are parties to the action, they are not parties to the damages claim.

The outcome of the November 2020 discharge application to the ex-parte interim injunction granted in November 2019 is clearly a different legal matter and the outcome of the discharge application is expected at the end of this month.

I wonder if the new contract signing is being held up by the interim injunction?

Don't forget the possibility that the debt restructuring ( term and rate) could also happen at any time. We are now "in the window" with over 12 months trading from the Nigerian assets under our belt.

The following is extracted from the 2019 A.R. (page 68).
The foreign exchange loss of US$12.7 million (2018: US$0.9 million) arises mainly from the fact that US Dollar denominated gas sales were collected in local currency converted at the Central Bank of Nigeria (“CBN”) official rate.
In order to purchase US Dollars to service US Dollar obligations, Savannah is obliged to use the Nigerian Autonomous Foreign Exchange rate (“NAFEX”), which is the benchmark rate for
foreign exchange spot operations in the investors’ and exporters’ foreign exchange window. During 2019 the CBN exchange rate was approximately 306 Naira/US$ and the NAFEX rate was approximately 360 Naira/US$, a 15% differential. This exchange rate differential was and continues to be included in our future planning assumptions. The foreign exchange losses are thus
not a result of sudden unexpected changes in rates, rather the fact that two parallel rates exist which are accounted for in our forecasting. We are encouraged by the fact that post year end,
in March 2020, the CBN adjusted the official rate, which has resulted in the differential between the CBN and NAFEX rates falling to 7%. The Nigerian Government has indicated to the World Bank that it will unify these two rates in the next 12 months.
These losses are in part recoverable through a foreign exchange “true-up” clause in the Calabar NIPP gas sales agreement (“GSA”) whereby realised foreign exchange losses on this contract can subsequently be invoiced back to Calabar and recovered and recognised as a reduction in foreign exchange losses.

https://africaoilgasreport.com/2021/01/in-the-news/savannah-may-get-a-trickle-of-crude-oil-to-zinder-refinery/

Savannah Petroleum intends to commence installation of an Early Production System by the end of financial year (FY) 2021, market conditions and financing permitting, and intends to deliver its initial production of 1,500Barrels Per Day from the R3 East development, to the Zinder refinery in Niger Republic.
“Subsurface work has been progressing well following the completion of our Pre-Stack Depth Migration (PSDM) processing of the R3 East seismic in 2019”, Savannah explains in a release. Savannah has now completed the seismic interpretation of the R3 East area. The PSDM dataset shows an overall improvement in the interpretation of faults and horizons, supported by attributes analysis which has also improved our structural, stratigraphic and sedimentological interpretations. Based on the newly interpreted PSDM, 3D geocellular models have been built for the Amdigh and Eridal discoveries. The resulting oil in place volumes are in line with previously reported estimated figures from the Niger CPR dated April 2020.
Significant further potential on the Savannah PSC areas remains, with 146 further potential exploration targets having been identified for future drilling consideration as Savannah looks to follow up on its highly successful R3 East drilling campaign in 2018, which saw five exploration discoveries from five exploration wells. The R3 East portfolio is currently being re-evaluated based on the newly interpreted PSDM seismic dataset with a focus on the deeper Cretaceous plays.