Firering Strategic Minerals: From explorer to producer. Watch the video here.
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.
looking strong at the moment. the battle is between weak economies and potential recessions vs tightness in supply. china growth is a bit tepid, us jobs market cooling and germany looking a bit weaker than expected. we just have a **** government that does not know it’s **** from its elbow. but with a massive 15m draw last week in the us, along with ksa & russia (allegedly) cutting production, the market is very tight regarding supply. with huge cuts in capex over the last 8 years and the us rig count only in the 600’s and falling about 5 a week, i think the outlook for oil is very strong.
i won’t beat the drum a lot about it but we all know what this is doing for the balance payment for south sudan should it complete.
ps has the war in sudan ended or have the journalists simply moved to the sahel?
Leaders of Niger's ruling military junta say they can't accept a high-level diplomatic visit because there'd be a risk to the visitors' security.
Delegates from the regional grouping Ecowas, the African Union and the United Nations had been due to fly in today.
But the coup leaders told Ecowas that sanctions and the threat of invasion from the bloc had created public anger, so the delegation couldn't be hosted with calm and in security.
They added that Niger's land and air borders were closed.
Reports from the capital Niamey say many people have greeted the coup as a breath of fresh air, even though the toppled President, Mohamed Bazoum, was democratically elected.
Washington has warned there's a danger Russian Wagner mercenaries will take advantage of Niger's coup.
The Junta seemingly building their empire in Niger:-
Niger junta leader Gen Abdourahmane Tchiani has named a former finance minister as the new prime minister following the 26 July coup.
Ali Mahaman Lamine Zeine replaces Mahamadou Ouhoumoudou, who was in Europe during the coup.
Mr Zeine, reported to be in his 50s, served as cabinet director and finance minister from 2001 until the overthrow of the late former President Mamadou Tandja by the army in 2010.
His appointment was announced in a statement read on state-owned television channel Télé Sahel on Monday night by a junta spokesperson.
Mr Zeine has worked for the African Development Bank in Chad, Ivory Coast and Gabon in recent years, according to the privately-owned ActuNiger news website.
The junta on Monday also appointed Brig Gen Amadou Didilli as the head of the country’s High Authority for Peace Consolidation (HACP) and Brig Gen Abou Tague Mahamadou as the inspector general of the army and the national gendarmerie.
It named Col Ibro Amadou Bachirou the private chief of staff of the junta leader and Lt Col Habibou Assoumane as the commander of the presidential guard.
Niger coup: Wagner taking advantage of instability - Antony Blinken https://www.bbc.co.uk/news/world-africa-66436797
AK must surely be confident of adding material hydrocarbon production as he’s still recruiting personnel with salaries between £50k and £100k.
Personally I’m looking for Savannah to have a market cap in excess of $2bn within 12 to 18 months.
Savannah are doing some great stuff in the community as per the post on X below for some stuff going on in Nigeria. Also a few months ago they sent a small team of people to Niger to take kids from a school to teach them how to make water wells in the Desert. Don’t think they’ll be making many more water wells in Niger anytime soon.
I do like all this community / PR stuff but the picture just goes to show once again what a HUGE, very expensive workforce we have. I think SG&A budget for 2022 was $75m and we came in at $66m. For 2023 the $75m has remained static and it will be interesting to see what the 1H 23 numbers come in at when we see the RNS on 29/9/2023.
The workforce is obviously being built to support a very large company and we have to do it this way (horse before cart and all that stuff) but I do worry that a lot of it was scoped with Doba oil being in the equation. Over recent years we have always reported gross margins as 75% / 80% of revenue and let’s look out for this number as I see this as a key metric in out numbers moving forward.
From X recently:-
#Savannah is pleased to announce that #Accugas, its midstream subsidiary in #Nigeria, has recently signed a Memorandum of Understanding with the Inoyo Toro Foundation, for the establishment of the Savannah Energy Education and Internship Training (“SEE-IT”) programme within secondary schools located in the Akwa Ibom and Cross River States. Education is an important part of #Savannah’s corporate social responsibility and integral to our purpose, to meaningfully contribute to the economic development of the countries in which we operate through the development of projects that will make a material difference. The SEE-IT programme will enhance access to education and improve the quality of education in the two states. This is indeed a Project that Matters. We look forward to working with the #InoyoToroFoundation and to seeing the results of this exciting partnership.
While it’s quiet on here and no news (AI etc) on the deal, what are peoples views of this all being an anticlimax and we dont see the SP reaction we all hope for if SS closes with full Government blessings? In my opinion, in the past when we’ve had large successes, the SP has not reacted as positively as people may have possible expected. Ie:-
1 Although we all know there was no export pipeline, we saw hardly any reaction at all in Niger when we drilled 5 very successful wells from 5 wells drilled. You don’t very often see 5 from 5 from a junior starting out on exploration projects such as that and the SP reaction was very disappointing.
2 I still don’t know why we did not rise significantly on the successful close of the 7E RTO.
3 With regards to point 2 above and how successful Accugas has performed, I still see the SP as very much as underachieving.
So if SS Petronas 100% successfully completes, are people seriously expecting to see a significant rise? I certainly am but as you know, I am the ultimate optimist. The question for me is what will the equation look like on re-list. In ver y simple terms we have:-
Suspended price of 26p
Plus the upside of the SS deal if 100% completed
Minus the potential drag of Doba / Totco ICC case
Minus trouble in Niger
Minus trouble in Sudan
Plus potential Accugas debt re-sign, I think AK previously said could be worth $28m pa to SAVE
Plus any new hydrocarbon deal signed and closed
Plus potential additional renewable deals signed
Plus potential new customers in Nigeria / additional take-off from existing custmers
So lots and loads of calls and puts in the equation I guess and guessing a new SP is nigh on impossible. I just sincerely hope we do see some decent upside if SS closes, especially if we take only take on 50% of the headline acquisition price as debt and come out of it with >50kboepd of incremental production.
Would love to hear peoples views although I note a few people have given up posting on here at the moment. I assume they still hold though PMSL.
If you take a step back and look at this with a clean pair of eyes, it’s crazy how long this deal is taking to complete. Apart from it being in Africa, this transaction should be relatively simple. Ie:-
1 We are not operator and simply buying a share of production
2 We are looking to spend significant CAPEX whereas Petronas are not
3 We don’t have large complex IT systems to integrate
4 We will be taking on very few staff in Country
5 We don’t need complex regulatory sign off similar to the Chad / Petronas deal that we could not get
6 We don’t have employees or Government, as far as we know demanding severance payments
7 I assume we had the buy-in from SS Gov since day 1
8 Our seller wants out ASAP and we want in just as quickly
After 8 months this is frustrating for all of us and let’s really hope this gets over the line ASAP and definitely within the next 8 weeks by the end of September.
Who fancies a post close Friday RNS and the following Monday seeing the resumption of trading? I do and we could get absolutely huge coverage in the press over the weekend.
Have always said I’d keep a large core holding until December 2024 and that’s still the case. However, that timeframe could be forced upon me at this rate - ha ha ha.
Finally I’m currently running my price model between 15p and 100p. Just goes to show how important the SS deal is.
GLA and let’s hope we get some positive news soon.
K - good article and sounds like a step in the right direction for us. Let’s hope that’s the first decision of many that come down on our side. It certainly seems like the ICC may be siding with us on the whole situation here and more importantly, let’s hope we get a win on the Doba oil court case too.
SAVE and Petronas pushed hard to get the deal over he line by 28th July but that clearly did not happen. I don’t know how many or what the outstanding work streams are but there are more than one. I do know that South Sudan were still a bit twitchy about losing a major in their country and being replaced with a junior. I can’t find out why that is but find it a little surprising as we are not operator and are prepared to reinvest heavily in field development, something Petronas had not done for some time.
I am told that things literally grind to a halt in South Sudan which is their main holiday month. Additionally our City boys disappear for the same month for 4 or 5 weeks.
Therefore, as I he deal did not close by the end of July, SAVE decided to give new guidance of end September, allowing them a good 4 weeks to tie everything up when South Sudan re-opens for business and our City boys come back to their 6 hour working days.
SS gov, Petronas and SAVE need to come up with something meshing that gives some reassurance to the SS gov that all will be OK when Petronas depart. I’ve not been told anything about a leaving fee as in Chad but I suspect a package is being worked on.
SAVE are working as hard as they can and are confident they will get this over to he line. Whether it will be before the end of September or after is anybodies guess.
So all in all I don’t feel very comfortable at the moment. This is not me blowing hot and cold, it’s just a couple of posts as how I genuinely see our situation. Maybe Zengas (hopefully) will come back with a more upbeat view of life here. I have been happy overall with AK’s strategy, as risky as it is but at the end of the day he has been bloody unlucky and that is the risk we all take - most of all him personally.
So in the meantime I think we need to see in the short to medium term:-
Compression project successfully completed at Accugas
Nigeria to remain a stable nation and more new gas customers added and existing customers taking more
Debt re-finance to be completed. We’ve been promised this for years now and inflation / interest rates have risen exponentially over recent times
Hopefully the democratic administration will be restored in Niger but who knows
If the above happens, well test and first oil would be great to see along with the continuation of the renewable projects
South Sudan to close ASAP and resumption of trading
At least one more M&A this calendar year in the hydrocarbon space
I think we will see more renewable deals signed but as a medium term holder, these do not personally excite me
I’ve always wanted to see a dividend and this has not happened due to failed deals and nationalisation of oil in Chad
If South Sudan closes, I think we could see a dividend announcement in the 2023 finals but if it fails we are a long time off
No doubt there will be other things that people would like to see but that’s just a quick brain dump from myself. At the moment, we are definitely a one-trick pony and we need two ponies doing tricks very very soon.
Clearly with the understandable lack of RNS’s we have no idea what is going on in the company. However, outside South Sudan and Nigeria, the other countries of interest seem to be fraught with problems. Whilst this is the nature of the beast, we could not have envisaged Doba being Nationalised or the trouble arising in Niger. We all know, or at least should know that investing in companies operating in Africa is towards the higher risk of investments but we do seem to be having our unfair share of luck. We are very lucky to have a crown in the jewel still running well in Nigeria but at the end of the day, that is all we have until hopefully South Sudan closes within the next 2 months or so.
We need to close a revenue generating deal as a matter of urgency in my opinion. AK has modelled the company FTE to be a very large power generating company in Africa with an aspiration to be No 1. The headcount number in London is now huge and all paid extremely high salaries. What will all the people do in the renewable team if much more goes wrong there? Where are we left witht he projects in Niger at the moment? I know for a fact that many many staff have being flying to a large number of countries in Africa for 12 months plus now and the cost of travel and subsistence is very significant.
All this added to our M&A transaction costs must be causing a drag on the profitability of the company. To throw a few very rough figures out there, this could well be what some of our cash burn looks like:-
Exxon Chad transaction cost circa $20m + was it $170m of debt and large dilution? Looks like we’ve lost the Doba and Totco assets now and will hopefully be awarded a large sum by the ICC sometime within the next 18 months. But it’s a bit like filing a CCJ against somebody or organisation, they are often won but getting your cash is a different story. In the UK you can apply to the high court to appoint a bailiff who will then try and get your cash. However, if Chad lose the case and decide not to pay, who is the bailiff? Hopefully we could take the cash from listings in Cameroon but who knows?
Transaction cost for the failed Petronas Chad deal $10m to $20m spent for nothing!
A large renewable team set up on very high salaries. Hopefully we will see new renewable deals signed but when will we see any revenue from these. More MW seem to be falling off the books than going on. We have taken on a 75MW project in Cameroon that the Chinese walked away from mid-project, no smoke without fire eh? And where will we be left with the 450MW of deals in Niger. We have been working on these for over a year now and were hoping for project sanction next year. Hopefully our ARB oil will still be OK but I think there is a big question mark over the 450MW.
SS must be costing around $20m to date and there is huge pressure on the company to close. Some of the legal team being used can be charging $5k per day here and should it fail we will be hit hard.