Blencowe Resources: Aspiring to become one of the largest graphite producers in the world. Watch the video here.
Niger has started running its biggest solar power plant, filling in the shortage brought about by a cut in imported power supply from neighbouring Nigeria in July.
Nigeria - which accounted for 70% of Niger's power - cut its electricity supply in August after neighbouring countries imposed sanctions on Nigerien military leaders who overthrew elected President Mohamed Bazoum.
Most of Niger has since then suffered frequent blackouts.
Energy Minister Mahaman Moustapha Barke said on Sunday that quality of electricity supply had improved in the capital and other towns following the coming online of the solar plant.
The French embassy in Mali has said it notes the "operational launch" of the plant but warns that it faces operational risks as it “could not be finalised under the conditions initially planned”.
The plant, built by a French consortium, was initiated in 2018 and inaugurated on 5 July this year. French relations with the Nigerien junta have soured since the coup.
The plant has over 55,000 solar panels and can generate 30 megawatts of electricity.
It had been due to begin operations in August but that was delayed following the 26 July coup that overthrew Mr Bazoum and many of the technical operators left.
Mr Barke, the junta's energy minister, on Sunday said the plant’s coming into operation had been made possible by the technical workers who remained.
I sent in 7 questions earlier in the week to Sally. Whilst we know we will not learn anything material in the replies, it’’s very encouraging that Sally replied late yesterday to acknowledge my email and is hoping to get something back to me next week.
1 - are Savannah still on track for the South Sudan deal and expecting to issue an Admission Document on or by 15/
12/23? What are the work streams that are still being worked on?
2 - as we issued a term-sheet to a consortium of lenders quite some time ago, I'd have expected this to have completed by now. Where are we with the Accugas debt re-finance and is it still expected to close in Q4/23?
3 - as part of the companies FY23 objectives, one was stated to be 'close at least one more hydrocarbon M&A deal in addition to South Sudan’. Is this still expected to happen before the end of this calendar and how many deals are we working on?
4 - how are things going on with well testing in Niger and has the new $4bn pipeline been completed and commissioned?
5 - how are the 4 x ICC cases going and with all the changes going on in Chad (energy minister being sacked due to trying to nationalise Doba), are we talking directly to the Chad Government and trying to reach out of court settlements? I guess with the TOTCO/COTCO revenues being frozen that it's it hitting Government finances quite hard.
6 - will the company be releasing a Q3 operations / finance update and if so when will this be issued?
7 - if all customers took their full take or pay quotas from Accugas, would we be at full capacity or do we still have spare capacity to add new customers prior to the compression project being completed?
Hubs - my understanding is that these types of deals have long-stop dates which do what they say on the tin. However, if ALL concerned parties agree to an extension and there is a realistic chance of the deal completing they can be extended.
But for reference, read the WEN RNS yesterday.
Tweet on X a bit earlier today:-
#Savannah was pleased to participate in the inaugural Nigerian Electricity Supply Industry (“NESI”) Market Participants & Stakeholder Roundtable 2023. The conference discussed the accomplishments, challenges, opportunities and prospects of the Nigerian Electricity Supply Industry, 10 years after its privatisation in 2013. #Savannah’s Head of Commercial, Oge Peters, was on the panel to discuss the topic: “Gas to Power: Challenges and the way forward”. Oge spoke about Savannah’s contribution to the Nigerian domestic gas market and power sector, where we currently supply gas enabling c. 20% of Nigeria’s thermal power generation capacity, as well as supplying gas to power for a number of industrial customers. He advocated a more attractive gas market with the right incentives to encourage domestic producers of gas.
Well so far, any official stuff we have read says the pipeline and production have not been affected by the war in Sudan. But as we are all aware, as the war continues, there has to be a dark cloud sitting over the pipeline. This is why it’s imperative that when the balance payment is known ($1.25bn - the amount of economic interest credit from maybe as far back as 1/1//22) and I’m expecting it to be somewhere around $400m to $500m, that we split as much as possible of the payment into future production payments. I really want to see the debt we take on kept to a bare minimum. Maybe something like $200m to $250m of debt and the same to be paid from future production.
That would then give us in total for the company about 75kboepd of production, a maximum of $600m debt, I would hope for 2P to be >400mboe and 1.4bn shares fully diluted.
Yes we will get discounted due to everything thats going on and especially the war in Sudan, but I would still expect a successful SS deal to re-list us at >50p. then we have Niger to come on line at some point, 4 x ICC awards hopefully in our favour and organic growth / new customers when the compression upgrade is completed next year.
Have at least 1GW of contracted renewables - put back to 2024
Refinance debt - guidance says this will still happen
Test Niger discoveries - put back to 2024 but saves $30m 2023 CAPEX
Close South Sudan Petronas deal - guidance says will be hit
Close at least 1 other hydrocarbon acquisition - radio silence but who knows?
From the 5 - is certainly be happy if they delivered on Debt and SS deals but I guess there is a possibility we deliver 0/5.
CYB - I think 6 weeks for any potential Chad out of court settlement is a bit soon but I hope we have a chance to work on a deal like that. I believe AK is holding all the trump cards on that one and would be able to be VERY firm with any negotiation.
Conversely, SS know the massive importance to AK for the Petronas deal and he won’t be holding as many trump cards on that one. Whilst there not be any other ‘real’ acquirers, I think that if the SS Government say to AK ‘jump’ his reply would rapidly be’ how high’!
I’m with others here, let’s get this debt deal done to really underpin and stabilise the company but I am expecting something like 8% + LIBOR which will be pretty hard to stomach. But let’s not forget we still have nearly $4bn of Gas revenues in Nigeria over the next 15 years and that should significantly grow next year when the compression project is completed.
Like others I am massively hungry for some updates which to be honest, on the debt front could come at anytime.
Tier - having thought about it a bit more, I don’t think the market will like it if we come back without a completed (obviously we would still need shareholder ratification if we did come back with all work streams and Gov approval post ad doc and re-list) deal. I am also assuming that should we come back without a completed SS deal that we do not announce another M&A deal. My reasoning for this is:-
1 the market would be very nervous about SS completing, especially after the Chad fiasco, albeit on different terms
2 yes we are favourite for the 4 x ICC cases but these are too far off decisions and the market will price in zero for them
3 the Niger pipeline is delayed and so is our well testing program that should have been in Q4 2023
4 at the interims, debt has gone up since EOY 2022 and production was down
5 not sure where we are at with 450MW renewables in Niger but am assuming delayed with what’s going on in Country
6 no revenue coming to us from Cotco while revenues are frozen
If we did come back without a completed deal in SS I would dearly love to come back (as would everybody else on here) to come back at a minimum of 26.35p but somehow I think we would come back lower than that.
All that being said, I still think we have a good chance of SS completing and if it does, I hope the market do not discount for the ongoing war in Sudan and hence threat to the export pipeline.
US to remove Uganda and three other African countries from Agoa trade deal https://www.bbc.co.uk/news/world-africa-67236251
World Bank warns oil prices could reach $150 a barrel https://www.bbc.co.uk/news/business-67267719
I wonder why we started to try and buy it at n Jan 21 if the SS Gov announced in 2020 that they intended to nationalise their oil in 2027?
Anyway, good that the Gov have been over to China / CNPC to discuss their backtracking on Nationalising and PSC extensions beyond 2027.
Great that we have CNPC fighting for extension for themselves and by default for ourselves.
Am not certain but I think Arrow have to wait until February 24 (which gets them into the 4 year window of current PSC ending) before they can extend their PSC in Columbia beyond 2028.
Maybe it’s different country by country but we are now within the 4 year window of CNPC’s PSC ending in SS in 2027.
God knows how long these things can take but am sure we will find out in due course.
At least SS seem determined to increase production beyond 250kboed and if that’s to happen they need to extend PSC’s and keep CNPC, the other company and ourselves onside.
TiL - great post and even more exciting for us if we close the deal. Only 6 weeks on Friday until the “on or before 15th December 2023” date. But being brutally honest I think the dates put out by SAVE are best guess dates and not specifically tied in to work streams ‘completed dates’. You never know what’s going on in the background with the SS Gov and Calltech / Russia or other. Was hoping for catch up on a call with my contact at IR but they’re on extended leave until 27th November.
K - I wonder if something REALLY big is going on (AK does not do small things) and SAVE could possibly spring a really nice surprise on us. Maybe I’m dreaming and wishful thinking but you never know.
Now let’s get this bloody debt refinanced as a starter for 10…
Sudan conflict: RSF takes control of Nyala in Darfur https://www.bbc.co.uk/news/world-africa-67226076
Another case of more and more reliable gas and renewable energy needed in another West African country.
Ghana power crisis: Limited gas supply triggers nationwide power outage https://www.bbc.co.uk/news/world-africa-67236078
Nigeria Supreme Court dismisses election challenges by Atiku Abubakar and Peter Obi https://www.bbc.co.uk/news/world-africa-67227814