Without wanting to sound negative (as I clearly want SS to complete and after all this time, I think it will) but if it does not, I hope AK has another deal, oven ready that does not constitute and mandate us going into another back to back RTO.
Naively I’ve always though that RTO’s were determined on market cap alone but having gone through this one and read a lot of stuff, it seems that the rules that determine an RTO are numerous and complex. If it were market cap alone, we’re currently sitting at around £350m ($440m), so on my old measure any acquisition less than that that would be fine. In theory that would allow a decent bit of business to be bought. But to be honest, if we don’t complete on SS, I have no idea how any subsequent purchase would be measured for RTO calculation. I do think that AK will have done a VAST amount of work on at least one more deal.
Finally I know he says that a small deal comes with as much hassle as a if deal so we only do big deals. Is SS does not complete, his stance does not wash with me and I think we should bolt on a few smaller acquisitions without more suspensions. I’m tired of being suspended and in my opinion we should not go in anymore very longwinded, uncertain and expensive RTO’s.
We floated in 2014 at 56p and we deserve see some progress to get us over that price and off to the races soon.
$730m seems cheap for 45kboepd to me, especially compared to our $1.25bn for 50k-60kboepd from Petronas. Is this because they only have between 82mboe and 131mboe of reserves at current production rates? Maybe somebody else with more knowledge than me could give their views / comparisons to the deal we are trying to secure in South Sudan.
Added more today as I’m hoping we have plateaued at the current price. We’re also in for a very busy period of news and company PR over the coming weeks and months. Inevitably there will be bumps along the way but I think that on the balance of probability we will see a lot more positive news on Han negative along the way. Biggest risk I see at the moment of s the jurisdiction of the Country in which we are active. Genuinely looking for a 2 bagger from current price up to around 50p within the next 12 months. Apart from CN3 results I eagerly await the updated reserves report and the analysis of the latest seismic being issued once the data has been fully processed and integrated to existing knowledge. Regarding new licences and extensions I need to do more research.
I3E paid monthly dividends from January until June and the 1st quarterly dividend is based on the period July to September. This is expected to be announced and paid in October if the pass the financial tests whatever they may be. So I am expecting 3 x 0.000855 = £0.002565 per share to be paid in October. After that payment for the 1st 9 months of the year the company would have paid ((6 x 0.00171) + 0.002565) * 1,201,870,000 = £15.4m. Then the final dividend for 2023 would be for the period Oct to Dec and paid in January. On top of that we have a chance of increased dividend, special dividend or buybacks.
Morning all
Started a position here today. Looks cheap at sub 12p and even with the trimmed dividend still paying 8.5%. I am basing my investment decision on all the bad news from the company being out on the table. I think the new CFO will have been instrumental in dragging CEO back into line as he was clearly over optimistic of his NOI numbers especially as they were based on very high POO of $80 and AECO of $4.5. I have a few concerns about drilling enough incremental BOEPD this year to counteract decline rates but we can never have a stock we are 100% happy with can we? Maybe we will acquire a bit of production and if we do I hope for no raise but I am only 70/30 on that. Regarding CFO share options I cant see him hitting the 1st one this year but the 2nd and 3rd are quite possible. Am I reading the RNS correctly that the options vest 1/3 1/3 and 1/3 on the 3 anniversaries of the RNS date even if he does not hit the 3 individual targets? This seems very strange as why should he even consider buying them at 20p. Anyway that is just a bit of noise to me at the moment. Looking forward to my first dividend in October and I have pencilled in 15p SP by the end of the year which would give me a paper profit of 25%. Will obviously monitor closely and I also need to brush up a bit more on the Canadian market. For what it’s worth I do not like Serenity and I also think we should shut down our very expensive UK operation and move to Canada. Main reason for being in London it to be able to raise capital I agree but there are more than one way to skin a cat. I will add as appropriate as news is released and I see what is happening longer term to commodity prices which I think have quite a strong short to medium chance of increasing from current prices.
Wagner boss Prigozhin killed in plane crash in Russia https://www.bbc.co.uk/news/world-europe-66599733
And if there was an issue of equity as part of the SS deal due to the loss of expected FCF from Doba when deal was signed, we can rest assured it would be significantly higher than the suspended price. Maybe not too bad a thing if that happened, especially if we got new II’s on board and it would draw a new floor to the SP when trading resumes.
Some great posts today folks, massively appreciated. With hopefully 31p/45p W/O SS, it’s scary to see think that we could be 80p - 120p with SS. It really is mind blowing to think what a successful SS deal could mean to so many of us on here. Here’s hoping that in less than 6 weeks, we could be trading again and producing over 80kboepd. Here’s hoping…
Cyb - very helpful insight and thank you. You clearly have a detailed model that you run in the background and I commend you for that as these types of models are extremely difficult to put together. I think the best I’ve ever seen were from a true gent who wend under the name of Dalesman but alas I don’t know what happened to that chap.
A few follow ups if I may? Could you please give us brief commentaries as to how you get to each of your prices, copied below. I guess specifically a few areas of main interest to me are inserted below each of your lines:-
Nigeria (including central corporate overhead) 9.4p
(What production and gas prices have you based this on)
(What number have you used for the corporate overhead and what FTE number have you used)
Niger -2.4p
(What cost have you included for our tie-in pipeline and production, if any have you used)
(Have you included our 35m boe as a 2P number in your calculations)
Chad 16.2p
(As Doba and TOTCO have been Nationalised, how do you get to this number? 16.2p seems very high to me as things currently stand)
Cameroon 9.1p
(Is this with 41.06% + dividend or 31.06% + $44.9m + reduced dividend?)
South Sudan 54.8p
(What debt number and 2P number have you used in this calculation and are you factoring in any dilution in your model)
Re de-list from AIM, do you really think this could even be the remotest of possibilities, especially with AK holding 48m shares and 60% ish owned bBy II’s?
Excluding SS, what net debt figure at EOY 2023 are you working on?
Do you have any valuations built in for renewables?
What payment are you expecting in the interims for Lekoil?
Sincere thanks and good luck
The SS deal could possibly be done with Government sign-off. As the admission document needs a FULL audit before it can be issued, the auditors may be working on it now. We know the 1H 23 accounts need full audit too and AK’s preferred way forward is to have the Ad Doc and 1H as part of the same process. This saves a lot of time and money.
So maybe we are getting close to deal completion now but I definitely don’t expect to see any updates on these 2 pieces of work prior to 29/9. So do we just need auditor approvals and then shareholders to rubber stamp everything 2 to 3 weeks into October.
Now - c’mon England…
Bit of a bloodbath out there at the moment with some O&G stocks having a very tough time, AXL i3E JSE PRD PXEN TXP and ZEPHR to name a few. Maybe it’s not too bad a time to be suspended as I’m sure we’d be very volatile at the moment and probably not in a good way.
in our favour big time are our fixed rate GSA’s for our gas at Accugas and i thin these are inflation linked per annum too. This takes out all the volatility of commodity pricing which is swinging all over the place at the mo with gas particularly weak. Oil seems stronger and every day that goes by our settlement figure for SS is reducing very nicely, thank you very much.
Also with things probably slowing down at the moment in Niger, are we not spending as much of our $60m guidance 23FY CAPEX? If we are saving here, will we be able to put more cash to SS final payment or pay down existing debt more quickly?
At FY22 I think our net debt was $404m / 1.275 fx / 1.1312bn shares = 24p to add to the SP if paid in full. I’m sure that we will reduce bed t by at least $100m this year which adds 6p to the SP. So all things being equal and without SS completing we could see 26.35p suspended price which was virtually end of 2022 +6p for debt reduction = 32.65p. There is nothing in this for Niger and nothing for TOTCO for which I think we should definitely see something from. We will be seeing the dividend from our 41.06% stake in TOTCO until we get paid our $44.9m and then our dividend will reduce to 31.06%.
Clearly Accugas is still the jewel in the crown and god knows how much more we have added with existing customers there. I guess the bigger we get, the bigger any news has to be before it’s classified as material and an RNS issued. Definitely seems that AK is not keen to let us know anything at all which is disappointing for us shareholders.
I still think we will come back to market one way or the other on Monday 2nd October at 8.00am and hopefully with a fully completed deal. If we do not have Government sign off by then and that’s the last thing that we need (apart of course from the obligatory GM shareholder approval), I don’t think the NOMAD will, or should allow a further extension to the 3 months they’ve approved as asking for Government sign-off in these types of countries is like guessing the length of a piece of string.
My revised return prices FWIW are 26p to 30p without a deal (or with a NONE Gov signed return) and 50p+ with Government approved deal.
So six weeks maximum to go before our next news and hopefully a few crumbs in some sort of RNS in the interim.
Not enjoying the journey so much at the moment but will be all worth it if we eventually get to a very good destination.
So I guess that would put the Petronas share at about 40kboepd, a lot less and Han the 50k / 60k we’ve been working on to try and estimate our balance payment.
Let’s hope we stay suspended for another 6 months to get the balance payment meant down to what we were calculating LOL
Better be careful what I wish for eh?
Very strange number for March, especially as it’s exactly 50% of the current number. I suspect the March number may not be correct. Certainly hope is incorrect as low numbers like that would be significantly affecting our balancing payment at closure of the SS Petronas deal. And the higher the figure the higher the chance of equity being issued in my opinion.
TiL - thats better news if it’s now signed off. As the opposition walked out Friday, there must have been a quick change to get them back in and get it all agreed. Can you please post your source of information stating it’s signed?
This could well be holding us up and there will be nothing that Savannah can do to speed things up. the more and more I speak to people, read things and think about it, the more and more I think we will be forced to come back at the end of September with or without Government signature.
https://www.bbc.co.uk/news/live/world-africa-66073092
Z - indeed and I think it will be larger than our suspension market cap and less than the enlarged market cap, assuming SS successful closure. My concern is that should SS fail and the other hydrocarbon still takes place, we go from one RTO suspension ending and another beginning during closed market hours and no time for resumption of trading.
We are in a very precarious position at the moment with no grey area, that is totally black and white and all based on the successful closure on the current Petronas purchase.
And I still think we are all over quite a large hydrocarbon acquisition in Cameroon, utilising the Cotco piece of the pipeline.
We got very high level gov buy in in SS before SPA signed
Nothing changed operationally since SPA signed but politics changed due to minister changes and Sudan war
I think SS gov see priority is dealing with Sudan war and change of company in country not top of their agenda
AK spending most of his time in SS trying to get gov sign off. I get impression other work streams complete
We need auditor sign off for H1 financials and auditor sign off for ad doc
SAVE trying to get auditor to do the above as one process for both and determined to get done by 29/9
I can’t see ad doc being issued before 29/9, I suspect 2 RNS on that day for H1 financials and ad doc
Made very clear to me at beginning of call we do not need gov sign off to issue ad doc and relist but AK does not want to come back W/O gov sign off and be in another Chad situation
I think nomad may say enough is enough and you need to comeback on 29/9 even if W/O gov sign off
AK cards close to chest re next SPA
We are still getting paid for 41% of Costco but nothing for Doba or Totco - as we knew would be the case
No update on ICC case to me of where Coup in niger leaves well test or 2 x renewable deals
Accugas debt still making progress but no indication of timeframes
My summary, I think we could well come back on 29/9 with 2 x RNS, preferably with gov sign off but may be forced to come back without. Whether AK gets sign off before then is anybodies guess. All seems good to me on the whole as a company but the next phase of our evolution is all down to one single humungous signature.
PS massive thanks to the person on the phone this morning, I was massively impressed with your depth and breadth of knowledge. thank you for your time, professionalism and sharing with me what you were allowed to.
Have a good weekend all and hopefully a lot more to talk about 7 weeks today with resumption of trading at 8.00am on 2nd October.