Member Info for SeaTank8300

Don't underestimate ANOH, which is actually already owned and coming on stream soon. This is a certainty, unlike MPNU, and will produce 10k boe/d to SEPL. It is not small, and all the capex has been sunk. This will be very cash generative and SEPL has nothing to do with the cash flow but give it to shareholders, IMO.

I would think about MPNU in terms of free cash flow and dividend. MPNU produces around 35m bbl annually. FCF should be at least $10/bbl at $75 oil, perhaps a lot more, I don't know. The transaction price tag is $1,600m as per 1 Jan 2021, so adjusted for FCF since then (I'm guessing at least $400m annual) the cost to SEPL will be closer to $800m. I would hope the market would asribe a value to this asset of at least 2.5x FCF, which would be $1bn, i.e. an incremental $200m to the price paid on deal closure. But every year that passes, $400m of the debt can be paid down and this value will be transfered to the equity, i.e. after two years $1bn value all to SEPL equity. That is more than the market cap of SEPL today. This is one way to look at it.

The other way might be impact on dividend yield. They may decide to keep the debt and pay out half of the FCF and reinvest the remainder in growth. Paying out half of that FCF minus cost of debt would be around $150m annually. That would be a huge increase in the dividend, almost 3x. That would certainly double the share price in my view.

But before all of that ANOH will definitely complete and will move the share price, so I would focus on ANOH before MPNU.

Hi, could someone help provide the contact email of someone at Napster or Algorand or the administrator of the scheme so that I can claim my tokens? Interactive Investor have told me that they are writing off the shareholding I had and have not been in touch about tokens.

I need a contact for someone who can help me claim.

thank you for any assistance

I believe the heavier buying and run up of the share price is on the realisation that the new government means business with regard to liberalisation (and is following through very quickly) and that the presidents advisory council, which is advising on these matters, has recommended that NNPC tone down competition with the private sector and that the private sector be encouraged to drive O&G sector growth. Gas prices could be liberalised much soon now too. Note the Dangote refinery will consume half of Nigeria's oil output soon, which essentially means that Nigeria can more or less double production within its OPEC quota - this needs the private sector to ramp up investment and it appears Tinubu is all for that. There is also an LNG export opportunity he wants to harness. There has been a transformational pivot in policy making in Nigeria - it is slowly dawning on the market.

Two potential SEPL-specific catalysts are the MPNU deal and completion of the ANOH refinery's gas truck line that has delayed its completion - good news on either front will move the share price a lot. Both are game-changers for cash generation and the dividend.

Pleasant thoughts to go into the weekend with

Bought more today. I thought the stock was cheap at 1900p a couple of months ago. We're at 1500p today but with 8% fewer shares. Bargain, especially for a company that typically does well in volatility when everything else is going down.

Events on the ground are moving fast. Yesterday the CBN let the currency devalue by 21%, and this morning a further 3%. There's still more to go but this is a huge and long awaited move by the new president. Nobody really believed it would happen so soon. Very exciting for Nigeria.

The immediate implication for Nigerian equities is that this signals much improved macro economic and fiscal management which will be a huge boost for future growth prospects. As the Naira falls and exchange controls are removed the country will also attract FDI and portfolio investors again.

With regard to SEPL, their local costs immediately fall in USD terms, a short term boost to profitability.

More than that, however, this represents Nigeria's opening up to market forces again, which is positive for their gas business, their acquisition of MPNU, and investment outlook generally.

This is very exciting stuff.

Full year results out next week. Hopefully with much more clarity about returning to 10%+ margins. Coming from a very low base - stock price can only rise from here, IMHO.

Most Nigerian blue chips including listings outside Nigeria such as MTN are up circa 50% since the election. Seplat has got some catching up to do, especially as there's no currency risk at all from a devaluation, which is coming. The local line of Seplat rose 10% today. Plenty more gains coming to us.

The fund that holds Shanta is NOT being wound up - I know this for a fact. Redemptions have been gated too. This is an opportunity IMHO.

This is almost certainly why the share has been moving north.

Austin Avuru, founder and one of SEPL's largest shareholders, is on Tinubu's advisory council, which is advising on O&G policy reform - this itself is very noteworthy and a sentiment turner.

One of their key proposals was a liberalisation of fuel prices, which you may have read was partially or fully enacted overnight about a week ago resulting in the price of fuel rising 2-3x. Tinubu reversed 8 years of policy in a week.

So what else was advised? In particular, transitioning to market prices for gas within 100 days (SEPL's gas is sold far below market levels), and mandating NNPC to close out outstanding divestments before end 2024 (MPNU is the major one).

Tinubu has no obligation to follow the coucil's advice, but it appears that he very probably will.

https://nairametrics.com/2023/06/10/tinubus-plans-to-double-nigerias-crude-production-raise-17-4-bn-through-sell-down-of-nnpcs-assets/

https://twitter.com/omoafe/status/1667772562942873600?s=20

Feels like something positive is lurking. I don't know anything - just feels like it.

The noise, dirty tricks and legal disruption being orchestrated by ABC Orjiako is not actually intended to undermine the MPNU deal. Orjiako's stake in SEPL is his most value asset and he wants the deal to close. Remember that he was the one who went behind the back of the board to offer the government a piece of MPNU in order to have the deal signed off. That is why SEPL is now suing him for damages; even though the offer he made has now been reconstituted and presented "officially" by the board to NNPC, from what I understand. The issue is, the new government may now want a further sweetener in some form - the negotiation will take many more months to pan out, presumably. There is also the question of how a piece of MPNU's production, if offered to NNPC, is paid for, financed, and by whom? It may be that SEPL needs to finance this but the cost is borne by NNPC, or perhaps both the financing and cost is taken by SEPL. Either way, SEPL have a strong position in the law in the first place to strike an acceptable outcome for shareholders, so we will all be happy if this deal receives regulatory approval even if the split of economics is slightly different to originally planned.

Meanwhile, all eyes on ANOH. This stock is throwing off cash and paying out fat quarterly dividends already; both will only increase in 2024.

This is good news in that the deal remains alive and well between the two parties, albeit Exxon will partake in a greater share of the profits during this extended wait for regulatory approval. I hear that once the new government is installed it will take several months to obtain necessary approvals, and there will need to be a quid pro quo agreement to give NNPC some proportion of MPNU's production, so it will be a diluted outcome for SEPL albeit still very material. In my view it will get over the line, ultimately, but the nearer and 90% certain catalyst is the launch of ANOH and the additional cash generation that will produce, which will have to waterfall into a further increase in the dividend.

All this cr@p is being financed and engineered by A.B.C. Orjiako, the ex Chairman and founder

Was there any further guidance on when the spur pipeline to ANOH will be completed? Last I heard, a British contractor was brought in to fix the river crossing part but they had not yet confirmed if their solution was workable. Hopefully this is now known and in progress, with a Q4 start of commercial operation in sight. ANOH has to be a catalyst for this share - how can it not be?!

I've read his book Multiply, which describes the agile and outcome/impact focused approach that TPX employs and makes a compelling case for it. I can see how TPX is winning over public sector clients at a clip. Their approach is also relevant for private enterprises.

With these contract wins I'm thinking in much more positive terms about TPX as a "going concern" again and the potential for growth. These very large contracts propel TPX into the next league and indicate the possibilty of a larger average contract size going forwards. The growth trajectory has potentially been transformed, from the 10-15% per year historically to much more, perhaps 20-25% per year. There is a real possibiltiy of TPX reaching 200m in revenues in more like three years. The profitability question remains, but I can't see why TPX shouldn't manage itself back to the 12%+ EBITDA margin range, where it has always been in the past and still much lower than industry standard. TPX should be making at least £24m in EBTIDA when it reaches £200m. Placing that one a paulty 10x EBITDA multiple puts a forward looking value of around £240m on the business. We're at £43m today. If a credible roadmap back to profitabiltiy can be delivered, this stock is going back towards 200p.

The debt is more like £19m with no penalties for covenant breach and HSBC are supportive; meanwhile the CFO has been buying and the company's revenue line has been rocketing. The covenant breach is unlikely to trigger a capital raise, unless profitability can't be returned to normal levels. In all likelihood the company has at least 6-12 months to normalise profitability. Anyway, cash generation at 3% EBITDA margin is more than enough to service the debt. So what is a minimum level of profitability for this company? 10% EBTIDA margin. 10% EBITDA margin on £100m revenues is £10m. The market cap is £44m. Therein lies the opportunity for all those new to this company.

Thanks damofarl, it's in my interest to support sharing of good information and analysis here, as I'm a very long term holder!

Regarding the raised quarterly dividend level of 3c, this is the baseline now, and we can expect special dividends on top of this commensurate with the oil price level. That means at the current oil price the annual total dividend for 2023 including special will be at least 15c (i.e. what it was for 2022). This is the absolute minimum pay out if oil price remains at this level or higher.

Now, if MPNL doesn't go through, we are looking at a net cash balance sheet in the not distant future + the start of commercial operations at ANOH at end of year, which will generate an additional several tens of million dollars of free cash flow to SEPL annually from 2024 onwards. According to board intention, this has to trigger another raise in the baseline dividend. Whether this raise comes in April 2024 or a little beyond we don't know.

ANOH alone could justify an additional dividend of 9c, in my view, at current oil prices, as should generate FCF of at least $50m - if we assume the board splits that two thirds baseline and one third special, we can expect approximately additional 6c in interim/final dividend and 3c in special at current oil price, when it happens.

That means 24c annually in dividends from mid to late 2024, which is only a year or so away.

The risk to this is that SEPL make another acquisition, or announce a huge renewables project, but I somehow doubt it.

I'm fairly relaxed about the stagnant share price with the steadily notching up quarterly dividend - or perhaps I mean that I am used to it.

Thanks Dartron. Some relief for the long term holders (still sitting on massive losses). Now there can't be any doubt that TPX has revenue lift-off and momentum. One important box ticked. Now we are all looking forward to hearing their detailed plan to make an EBITDA margin of >10% on all of this work incoming. The nuts and bolts of a return to profitability should be straight-forward and within their control, namely hiring the right permanent staff, retaining these staff thus reducing staff turnover, and reducing reliance on external consultants. I hope and expect they can make it right.

On £90m revenue, even a disastrous 3% EBITDA margin is enough to cover interest payments of circa £1m and deliver a positive PTP of circa £1m. Just saying, this business isn't going to the wall.

That said, management need to show a credible roadmap to take the business back to >12% EBITDA margin ASAP.