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This morning a number of large trades have been printed in Savannah Petroleum (SAVP LN). A total of 58m shares have traded, equivalent to almost 6% of the company, with the vendor, we understand, being a former Seven Energy SSN noteholder. In our view, this overhang goes some way in explaining the share price performance since the Seven Energy deal completed in mid-November. The stock immediately rallied above 27p/shr on the news, but subsequently fell to the low 20s as it became clear that there was a big seller in the market. We believe that with the vendor now seemingly clear, this decline should start to reverse.
All - link to an interview between Andrew Knott, CEO of SAVP, and Malcolm Graham-Wood of Malcy's blog below.
https://www.youtube.com/watch?v=kFgfzrRAByI
Contrary to expectations, shares in Savannah Petroleum (SAVP LN) have struggled for ground (down 19%) since completing the Seven Energy transaction, opening up a potentially attractive entry point for investors, in our view. We note that the deal serves as an important valuation marker which is currently being overlooked by the market. As part of a partial sell-down in Nigeria, SAVP divested 20% of the Uquo gas field and Accugas midstream business to African infrastructure specialists AIIM for US$54m in cash. This implies a valuation net to SAVP’s residual 80% stake of US$270m (21.1p/shr) including the cash proceeds – firming underpinning the current share price (21.6p/shr). Notably, the sell down excludes SAVP’s interests in the Stubb Creek field (risked NAV 6p/shr) in Nigeria and of course its entire Niger portfolio (risked NAV 30p/shr), suggesting that, at the current price, these valuable assets are in for free.
I see the number of shares in this morning’s TR-1 is in line with what’s on the SAVP website, looks like this is just to reflect the deal shares being issued and them moving through a % rather than any sale of shares.
https://irpages2.eqs.com/websites/savannahpetroleum/English/21/news-tool---rns---eqs-group.html?iframe=true&article=29895895&company=savannahpetroleum
All - a Core Finance video of Andrew Knott, CEO of SAVP, being interviewed by Malcy can be found at the below link:
https://www.youtube.com/watch?v=yyuXo72qquY&feature=youtu.be
The latest research note from Mirabaud can be found on Savannah Petroleum's website:
https://www.savannah-petroleum.com/en/analyst-coverage
Came across a note from finnCap on today's news. Excerpts below:
Columbus Energy Resources - Delivering on its promises
Columbus has announced that it has been awarded acreage containing discovered resource onshore Suriname. This new country entry brings additional low-cost, low-risk growth potential into the portfolio and strategically, geographically and operationally complements its existing operations in Trinidad. Columbus now offers growth potential on multiple fronts via its producing assets, low-cost developments, enhanced oil recovery, and high-impact exploration. The latest evidence suggests that the market should react positively to this news, and despite strong recent performance, Columbus still trades at a NAV discount to its peers. We are maintaining our Buy rating and raising our price target by 34% to 13.7p.
New country entry. Columbus has been awarded 100% of the Weg Naar Zee (WNZ) block, onshore Suriname, containing 24mmbbls of discovered oil in place. This award comes at zero cost and only carries a $250k minimum work obligation over the first three-year phase. The acreage has extensive historical well control and seismic that can help inform the appraisal/development of the discovered resource.