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K - I am not speculating and in very brief summary I’ll put it in to 2 points:-
1 AIM are not happy with the progress they were expecting to see prior to the agreement of this extension period we are now in. They have mandated that progress is made, mainly in regards to the SS by 1st Feb if a further extension is to be agreed.
2 Debt finance institutions (not Accugas finance) for the SS deal are not progressing their workstreams until we have some sort of new commitments from the SS deal. Their costs to put the deal together are very expensive and they are not prepared to spend the cash as things currently stand.
Now this bit is my opinion. If we were to get the commitment from SS Government (whatever AIM are asking for and I’m not saying a 100% final sign off) by 1st Feb, I believe the debt finance work packages will only re-start in earnest at that point. Then the debt packages would take 4 - 8 weeks to put together.
I think we will either:-
1 pull out or be forced out of the deal by 1/2/24
2 issue a half-baked AD and continue working through the tough parts of the deal
Or hopefully
3 keep AIM happy with progress to allow a further extension
Finally if it is 3 I think we would remain suspended for quite some time post 1st Feb. And as you say, the longer we his goes on, the less the debt finance required. Unless of course the Government and or Petronas start to change the rules if there is not a bi enough hard cash payment to them.
That’s all I’ll be saying on this subject for now.
K - the reason for the shorter extension is that it was mandated by AIM! Previously SAVE & NOMAD agreed dates and then AIM accepted. However, as we are so far past the initial 6 month period and a few extensions have been granted, AIM are now taking control of what’s going on. They have requested to see significant progress by 1st of Feb. I also believe that the SS debt deal is in early stages and debt providers need to see a Government commitment before they will continue their very expensive professional fees to put the finance deal together.
AIM will be pushing SAVE to relist soon if they don’t see the progress which they want to see and AIM are reviewing all progress now far more regularly than the were during the previous extension to the suspension.
In my opinion SAVE need to show debt providers that we have a committed Government before the debt package can be put together and not in place.
If we see a further extension I see this as good news as we will have to have made significant progress for AIM to allow a further extension.
Ooooohhhhhpppppppssssss here are the KPI’s for 2023 that I alluded to that have been missed:-
Reach 1GW renewables
Progress R3 well test
Complete South Sudan
Add at least one more M&A
Complete Accugas debt refiannce
Articulate corporate strategy
And I’m not one for hearing the bad luck card called - I’m one for addressing the overall risk of any future potential deals taken on. These deals we are trying to close are HUGE for a small company such as ours and the assets are being sold at bargain basement prices for a reason. I absolutely agree that the deals we’ve tried to close so far were the right ones to go for at the time but I want to see far lower risk deals being taken on for the next 12 to 24 months.
Rant over - over and out - Ciao
This is why I am getting more and more frustrated. Here are some of the most important KPI’s for Savannah to deliver on during 2023. Whilst I agree we could not expect them all to be hit, at the moment, this looks like quite a dismal performance and the least I expect is to be given some commentary on whats going on. AK has relentlessly said in the past “what we say we will do - we do” and also has frequently said “we are not an ‘or’ company we are and ‘and’ company”.
If a CEO in a FTSE350 company performed like this without at least updating the market ads to the reasons, they would be hung out to dry by the shareholder (PI’s AND II’s). As I’ve said many times before, we floated back in 2014 with 130m shares at 56p. And now some 9 years on we have 1.3bn shares and a suspended price of 26p. Whilst I clearly understand that Rome was not build in a day, how long must we wait before we see and accretive deals flow in to the SP post the Accugas completion. On that note we have still not seen any accretive action to the SP from the fantastic Accugas deal, surely Financial IR need to be asked some serious question on that subject. We changed Financial IR a few years back to Camarco and are still to see any results from them.
Sorry to air my frustrations on here but in my opinion it’s about time we held the relevant people to account. I’ve been to a few AGM’s now but AK has only been to the one I attended in 2015. I sincerely hope he’s there in person for the 2024 meeting. Hopefully we can then pat him on the back by that time when we are on our way to a $2bn market cap company - but let’s see…
Dam I caught the post button on iPhone in the sun:-
A controversial note from myself today but as a significant PI holder, I felt the time was right to let the key people know my views.
In summary, if the deal is not going to close, let’s move on and if we are to face a further extension post 1st Feb, give us some information with what’s going on with the RTO and the wider company.
If there are chances of a lifetime in African - let’s see at least 1 successful deal being completed.
After 13 months since suspension and absolutely minimal information on the RTO, the ICC cases, Niger well testing, Nigeria compression, Accugas debt restructuring, renewable deals or ANYTHING else as BAU in the company, I’ve written to Sally and James Spinney (NOMAD at Strand Hanson) to share my growing frustration. I urge any others on here to do the same should they deem it to be appropriate.
Rightly or wrongly, I think II’s will be briefed more often than ourselves. If not, what are the large team of IR x 4 I think and x 3 at Camarco actually doing.
Whilst I FULLY accept there are numerous very sensitive issues that can not be mentioned, I absolutely believe that we could have been given more information about the company in which we all own a share.
I have urged the NOMAD / AIM to force Savannah back to trading either with AD (with some workstreams still WI) or to walk away from the deal. We can not go on like this with endless additional extensions without being given some information.
A contov
Hey Z - what if all the horses came home together during 2024:-
1 Nigeria compression completed and new customers added taking us over 40kboepd and beyond.
2 Stubb Creek debottlenecked and produces 5kboepd.
3 South Sudan closes with an initial 50kboepd.
4 First oil in Niger at 1.5kboepd growing to 5kboepd very quickly and 33mboepd added to 2P.
5 Partner brought into Niger for >$200m.
6 At least 1 more M&A deal giving 10-20kboepd.
7 ICC x 4 awards in our favour for $400m - $600m.
8 Accugas refinanced on 10-15 year term.
Back to my sweet dreams…
GLA
Hi PF hope you’re well matey - and hopefully we get chance to have a longer chat this years AGM than last. Even more hopefully we can chat over a glass of Armand de Brignac Brut Gold Champagne Midas!!! Ha ha ha or maybe we will need to stick to the Asti Spumante!!!
Maybe the debt refinance is linked to the SS deal NOW, but an only a few months ago I was CATEGORICALLY assured it was not and a complete stand work-stream.
Yes net debt was last noted at $443m but won’t we have to refinance the gross debt which is around $600m to $650m I think?
I’d like us to do something in partnership in Niger with CNPC. Maybe it could go ‘full circle’ after we acquired our first ever PSC in Niger after CNPC failed to hit their drilling requirements in the ARB. After all, they know the ARB better than anybody and we’ve proven our credibility with our 5 from 5 wells and 33m of unrisked contingent resources. Now they’ve built and commissioned the $4bn pipeline I’d love us to de-risk our company and bring them back in to R1, 2,3 & 4 as partner with a large drilling program. Yes I fully agree we could sit it out and going alone for a great deal more EBITDA but a large cash injection at the moment would be ideal for me, especially if we are struggling to refinance our gross debt of circa $600m.
Additionally, as CNPC are operator in South Sudan, let’s hope they’re pulling their weight to help us to get our RTO from Petronas over the line.
In summary, I’d like to see us build an African wide strategic partnership with CNPC. I don’t know anything about their presence in Nigeria but I’m sure there must be avenues to explore.
Sp - David Clarkson told me that the tie in pipeline is of a very simple and fast modular design. I can’t remember exactly how long he said it would take to lay but my memory is telling be he said a month or two but definitely no more than two months if all supplies we in Niger and ready to lay.
On another note, a friend of mine has mentioned a potential reason why we’ve not had any updates on “BAU stuff”! Maybe wishful thinking but if SS is expected to close, it would take quite big news in order to be classed as material. Ie if we are to become a >$1bn company, deals in the $10’s of millions maybe not be classed as material and in need of RNS by NOMAD / SAVE.
Very disappointed that we’ve not seen debt deal closed as expected. Let’s hope we see it early in January.
Happy New Year to one and all and GOOD LUCK for 2024.
I’m a bit confused too as Harbours current market cap is just over $3bn and their acquisition RNS states:- Under the terms of the business combination agreement entered into between Harbour, BASF and LetterOne (the " BCA " ), Harbour will acquire the Target Portfolio for $11.2 billion
TiL - I’m with you on a diverse PF with some assets outside of Africa and I’m becoming a bigger fan of SE Asia.
Additionally and I know hindsight is great, but I’ve never been a fan of companies buying companies bigger than themselves. Yes, I get it that AK says smaller deals come with as much hassle as large deals “so we only do big ones”! But they all have “high hassle” they also come with “high risk”.
I would have liked to see 5/6 10kboepd deals taken on to land 2/3 which would still be huge to Savannah.
And I’m not being negative but simply stating facts here:-
1 After 8/9 years since IPO our SP is only 50% of our list price.
2 Since the Accugas deal 4/5 years ago, we have not seen a single $ from inorganic acquisitions and spent around $40m in transaction costs, massively diluted and added $2m / $3m to our debt stack.
Should SS fail, we CAN NOT take on any more RTO size deals and we have to do some stuff outside of Africa.
The French remain 100% out of favour in Niger. I wonder what the relationship is like between Chad / the French and more importantly between the ‘current’ Chad rulers and Perenco?
Niger coup leaders expel French, but not US, troops fighting jihadists https://www.bbc.co.uk/news/world-africa-67772422
And FWIW I’d do the following if I was AK:-
Strictly manage SG&A.
Refinance debt ASAP.
Put future business development (apart from in Nigeria) M&A on hold.
Put renewable projects on the back burner (pardon the pun) as African Governments take this as seriously as the West.
Direct the saved CAPEX from Niger well test and EVERY other spare penny in to reducing our very expensive debt.
Concentrate 100% on getting compression completed and adding new customers.
Commence Niger well test only when things have proven to be stable.
Work through the 4 x ICC cases and only start incurring large acquisition costs when we have positive awards and certainty we will see the $’s from the awards.
We have had a significant amount of bad luck over recent times and we can’t keep running forward at pace anymore and need a period of consolidation. Controversial I know but this is my view and I’m open for debate.
Getting a bit late in the year for a decent RNS. Just flicked though SVE’s latest presentation and there are 13 KPI’s still stated to be delivered by the end of 2023. Obviously I’m interested in all 13 but the main ones are as follows with my comment against each one in brackets:-
1 To have 1GW of renewables in motion (We have 525MW announced in motion but can’t see as we are making much progress on any of the 3 contracts that make up the 525MW. Like TiL, I’d like us to get a contracted deal in place in Nigeria and am a bit surprised we’ve not seen something announced by now).
2 To well test or 5 discoveries / 33m 2C in Niger (can’t really see this happening until mid / late 2024 now at best)
3 Close South Sudan RTO (simply not going to happen TY)
4 Close at least 1 more significant M&A inorganic hydrocarbon deal (not going to happen as an SPA being signed or similar would have needed to be announced by now)
5 Close the Accugas debt refinance (I have recently been told that this is still expected to close TY but it’s getting tight now)
Anyway, let’s hope we get a BAU update with some decent information in it before the end of the year and hopefully before Christmas. I have a sneaky feeling we may see something tomorrow or Friday.
LST - maybe wishful thinking on my part but I’m hoping AK has been waiting a bit for Naira stability before pushing the button on our debt refinance deal. Additionally I wonder if it could possibly be linked somehow as a tracker deal similar to some UK mortgages? Ie if and when Naira trades better we track the movements for our interest payments. One way or another it’s way beyond time for us to see this deal closed.
TIL - thanks for all your research and keeping some decent content on here. shame SAVE can’t give us a bit more info and they haven’t even put anything on Twitter for 6 weeks. With all that you’ve found going on in Nigeria, the least they could have done is put a few positive Tweets on. They seem more interested in letting us know about Graduate sponsored degrees than O&G. Hopefully we’ll get an update by YE but I’m certainly not banking on it.