Member Info for SeaTank8300

Agree Damofarl, the Mobile deal may or may not happen, in the meantime the catalyst is organic growth, a positive net cash balance sheet and raise of the dividend. Progress on all fronts by mid 2023 I hope!

Explains weakness these past several days:
https://www.lse.co.uk/news/nigerias-forcados-crude-oil-terminal-resumes-loading-spdc-crjjao07y2b6c35.html

Back up and running, again

I hope it doesn't mean another six month delay of ANOH

Share price is moving up. The fundamentals alone support it. Trading on 3.5x EBITDA...dead cheap for a franchise with excellent growth prospects.

There are no sellers. Trading update is in a couple of weeks - should confirm that they'll meet current forecasts.

Maybe some processed LPG for export, but I thought this was primarily for domestic consumption. I don't think it will really move the dial for them anyway. It would be nice to see some pipelines for gas export, but those are years and years away. I'm not aware of them having future plans/access to LNG terminals.

However ANOH's gas to liquids plant will leverage their gas reserves and the profits will be exportable. The capital cost of such as plant is massive though, so I'm not sure it really makes sense for them to do another. Also ANOH has taken years to be built.

On an aside, i'm finding the torment on the Savannah Energy board fairly amusing. Not because I enjoy watching suffering, but for all the hubris that board was throwing around back when the share price was 38p.

I've been, on-and-off, a shareholder in SAVE. From 9p to 18p, then 24p to 36p. I do like the management team and their ambition. But, one thing has always niggled me about this company. NO DIVIDEND. The reason they don't pay a dividend, other than the fact they have always held plenty of debt, is because they can't pay a dividend because they can't expatriate profits from Nigeria. This is because they are a domestic gas producer. It's not allowed. Anyway, there it is. Bummer.

Turning this around to SEPL. The oil business is throwing off cash and that pays the dividends. Meanwhile the domestic gas business reinvests its cash flow into capex, adding value that way. Few seem to understand this difference.

hxulcolrdoh, you're commentary here, among watchers of SEPL for many years, isn't adding much value - sorry! Firstly, the hit to SEPL's profit was primarily in Q3, so this is a historical event now, so it is not really a profit warning, which usually refers to forward looking results. Yes there will be some hangover into October, but not a huge deal as December should be better than average in terms of production and somewhat make up for the bad October. Secondly, if you believe the force majeure at Forcados Terminal was a "profit warning", then there has been a profit warning from SEPL almost every year of its existence - that's not a profit warning, that's regular course of business. In accounting terms it is not "exceptional", rather it is a common event, that happens intermittently. It is out of the company's control, which why SEPL has been looking for more stable evacuation routes. So in short, poor results reported for Q3 was not a profit warning.

Welcome to Nigeria!

Invest in a second tier oil producer. Many out there pay high single digit or double digit dividends and trade on 1 or 2x EBITDA. The oil price could, probably is going to, stay high permantently as oil production is being crushed by climate crusaders. You can take home a fat dividend and see your investment double as this dosy market full of tech hubris catches up with reality.

Nothing new here from Capital Access, but they do make the following points that I've highlighted before and support the story:

13.8% reconciliation losses will reduce with the Escravos Ampuke pipeline up and running - not a small number!
55kbpd exit production by year end is top of the forecast range and excellent drilling performance should support further growth in 2023
Forcados Terminal is operational again and Bonny Terminal will be shortly

This is all good news.

It's time for the dividend to be raised, by Q1 next year latest please!

https://*********************/dashboard/PortalDownloadResearchNote?id=23_2022110810101897950&token=&partner=&whitelabelCompanyId=

The silence from the company is loud as hell.

Some half decent volume into rising share price is most welcome!

Came across this website where tenders are posted by the E&P companies in Nigeria. One can see what Seplat is currently tendering out.

For instance, what sounds like significant further investment in OML53 infrastructure, which probably suggests the company believes that the route to market via Bonny Terminal will be fixed otherwise why would they be sinking more investment.

http://nipexmain.nipex-ng.com/nipexsite/wp-content/uploads/2019/09/nipex_opportunities.htm

The update last week confirmed that the GSA with ONEE for phase 2 remains in place and the deadline for conditions to be met has been extended to 30 June 2023. Sound has plenty of breathing room to have the financing package from Morocco's largest and leading commercial bank (Attijariwafa) signed and in parallel to bring in a JV partner to fund the remaining equity required. The pieces of the jigsaw are falling in place.

Folks seem to forget that phase 2 is a project of significant scale, low complexity, and national interest; both the government and banks are very supportive of it. I don't see how this project won't break ground by next year. The project has significant value to Sound - multiples of the current £50m enterprise value.

In my view Sound will find a JV partner for the remaining equity, the share price will rise significantly, then the company will raise some additional capital to cover admin expenses until the projects deliver cash flow.

For all anyone knows Sound might accept an offer for the entire company, as interested third parties probably would like to be operator themselves.

Only a fool would short Sound today.

"Phase 2 Development Gas Sales Agreement



The Company announced on 30 November 2021 that it had entered into a binding gas sale and purchase agreement (the "GSA") in respect of the Phase 2 development of the Tendrara Production Concession with Morocco's state-owned power company ONEE (Office National de l'Electricite et de l'Eau potable) for the sale of natural gas from the Tendrara Concession in Eastern Morocco over a 10-year period.



The GSA remains conditional upon, inter alia: (i) all necessary authorisations and permits having been granted for the construction of the Phase 2 gas installations; and (ii) the final investment decision, when taken, by the Tendrara joint venture partners, being approved by the Moroccan Ministries of Transition Energy and Sustainable Development and Economy and Finance;



Pursuant to the terms of the GSA, the Company announced on 9 March 2022 that it had agreed with ONEE a 90-day extension to the period by which the conditions would be required to be satisfied in order for the GSA to become effective. Whilst good progress is being made in order to satisfy the conditions, the Company announces that it has agreed with the parties to the GSA to extend the date by which the conditions should be satisfied to 30 June 2023."

Will be v positive for SEPL's OML53 production. Also no comment on SEPL deal with Mobil - no news is good news.

https://www.energyvoice.com/oilandgas/africa/457048/nigeria-nnpc-lng-oil/

Nigeria is currently producing 1.45 million barrels per day, with plans to scale this up to 1.8mn bpd by the end of November.

Nigerian National Petroleum Corp. (NNPC) head Mele Kyari, speaking at Adipec, went on to say that the country intended to reach 2.2mn bpd in 2023.

“Everyone is coming back to the table now,” Kyari said, in reference to potential investments from the IOC. Companies are reassured by “improved security and also improved fiscal terms, it’s a perfect opportunity for businesses so the companies are coming back, particularly in the deepwater.”

Should investments move ahead, Kyari said Nigeria would reach 3mn bpd within two to three years, and then 4mn bpd in five years.

Nigeria’s production fell below 1mn bpd this year, largely as a result of insecurity and sabotage in the Niger Delta. There have been some promising signs, though, with Forcados now back online “force majeure will be lifted from Bonny”, he continued.

As production moves up, he continued, Nigeria would seek to raise its baseline at OPEC, allowing it to increase output while conforming to new quotas.

The NNPC head was bullish about the possibility of new investments. However, he declined to shed any light on his company’s efforts to halt the sale of ExxonMobil’s local onshore unit to Seplat Energy.

NNPC is targeting the Exxon assets for itself.

"The Company has received strong interest in the process from a wide range of credible and well-funded parties." The lawyers won't let a statement like this go out publically as an RNS unless it can be substantiated.

For me the conversion of the first phase was the turning point for Sound. I expect more good news to follow from here as the larger resource is economic and will attract interest.

DNO ASA trades at a similar multiple. Jurisdiction/country risk is an issue in my view. Few willing buyers of these assets. Still, I'm OK with the dividend personally.

I find it somewhat amusing that some folks here are surprised about the country risk. In a place such as Nigeria it's labelled front and centre, and anyone who's been looking at SEPL beyond the last few months of acquisition excitement will know all about it. Vandalism, theft and shutdowns at Forcados have been a regular occurrence for years and years. It is actually the story of Nigerian oil production decline the past ten years.

I believe the terminal deals with around 15% of the country's crude production as of today. One thing to remember is 85% of Nigerian government tax revenue derives from oil, so there's an incentive for the government to keep the oil industry alive, but it's on life support because of deep and embedded corruption. With oil production halved in ten years and debt default around the corner, I would say that it can't get much worse from here bar a complete collapse of the state, which is very unlikely in my view. There are too many vested interests in keeping the beast alive; and the oil industry is the life blood, sadly.

So where does that leave us? Forcados Terminal is back up and running, SEPL's daily production has already bounced back. Yes Q4 numbers will be damaged due to the outage in October, but November and December will be fine and the outlook for 2023 remains excellent assuming no further disruptions (always a risk). Markets are forward looking and will move on from the recent Forcados shut down, and price in better production numbers next year with new wells, less disruption, the AEP, and ANOH.

Read the update again yesterday. Their drilling progress has been really good this year, with 7 more wells due in Q4.

In the context of THIS, it's bloody amazing progress:
https://businessday.ng/energy/article/nigerias-rig-count-falls-further-to-seven-lowest-this-year/

With Forcados back operational, were sitting pretty sweet in my view.

Some patience required