The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Zengas - One thing I would like to add is if they are unable to secure another acquisition, and are unable to re-finance the accugas debt. Than my personal choice would be any cash which is considered spare and by spare I mean cash not needed for Accugas and Niger work programmes should be used to pay down the accugas debt as aggressively as possible or share buybacks. Personally not a huge fan of dividends at our current valuation and feel that paying down the accugas debt above the usual payments or share buybacks will be more pleasing to shareholders in terms of growth.
Zengas - Totally agree I think the company now has to deliver substantial / material news flow considering we will be suspended for over 18 months possibly even longer.
To put it into context Afentra was thereabout 25/26p in December 2022 now near 50p and Seplat our Nigerian peer was around 85p and now close to 160p. So these 2 companies are a classic example of seeing close to a 100% share price growth over the same period.
In similar context if we are to have parity growth over the same period than we deserve a minimum price growth up to 50p, and if we are to be fully diluted 1.4 billion shares that would equate to a market cap of circa £700m, how the company is able to deliver this growth will be interesting, now whether they can materially increase accugas output well beyond 200 mmscfd, start aggressive Niger exploration and production or deliver through another acquisition, but that's minimum that needs to occur
Looks like Deal approvals in Nigeria are gathering pace -
Nigeria
ENI sale of NAOC to Oando imminent
After concluding a months-long assessment, the Nigerian upstream regulator is expected to authorise the transaction in the coming days. The acquisition means the company led by President Tinubu's nephew will nearly double its oil reserves. [...]
https://www.africaintelligence.com/west-africa/2024/04/29/eni-sale-of-naoc-to-oando-imminent,110220658-art
If the ENI to Oando deal is approved than the Seplat / Exxon Deal and also the Shell / Renaissance could also be imminent. Perhaps there is never a better time than to strike another deal in Nigeria, whilst the government could be about to start an approvals spree.
The company has to do all in it's power to get another Nigerian deal over the line seems like the investment environment there is relatively more friendly albeit still drawn out.
The charts I am referring to is on the CPR document released in March 2024
https://wp-savannah-2020.s3.eu-west-2.amazonaws.com/media/2024/03/Nigeria-Competent-Persons-Report-18-March-2024.pdf
I was just looking at 2 interesting charts to see if there is anything that catches my eye and 2 charts particularly caught my eye, please see below:
1) Figure 4-2 Uquo Field production forecast profiles page 41 shows our production from roughly mid 2024 should be 190 MMScfd = 33,676 BOEPD.
2) Figure 4-4 Stubb Creek production forecast profiles page 43 shows our production being 5,000 BOPD from Stubb Creek
If those forecast are as accurate considering that were released in the CPR as latest at March 2024, than I expect us to between 35,000 - 40,000 Boepd by close of this year, unless i have misinterpreted what the chart is trying to tell. That doesn't factor in any production from Niger.
In that context our Accugas Contracts:
Long-term GSAs in place with the Calabar power plant (131 MMscf/d) and Lafarge cement plant (24.2 MMscf/d)
The GSAs have a combined 155.2 MMscf/d Daily Contract Quantity (DCQ) with an 80% Take-or-Pay provision
Additional interruptible GSAs are in place with:
Central Horizon Gas Company (CHGC), an Axxela subsidiary, for up to 10 MMscf/d
Notore Chemical Industries for up to 10 MMscf/d
Shell Petroleum Development Company of Nigeria (SPDC) for up to 3 MMscf/d
Shell Nigeria Gas Limited (SNG) for up to 3 MMscf/d
Nice to see ex Nigeria president driving investors to Akwa Ibom state as promoting gas development
https://leadership.ng/why-i-endorsed-akwa-ibom-for-huge-gas-investment-jonathan/
Porsche - I have seen this article a personally I don’t believe any entity will loan 2-3 x GDP it’s another silly caltech style news and not worth the paper it’s written on. A distant relative of the royal family is laughable.
It’s like saying I am related to the royal family and got them on speed dial
Ground breaking ceremony for plant in akwa ibom in local ibeno area right in the midst of accugas pipeline, attended by Nigeria gas minister.
https://independent.ng/windek-energy-breaks-ground-for-20000-mt-liquified-gas-depot-in-aibom/
Looks like Akwa Ibom government in south east Nigeria are building a LNG plant, I am sure this will unlock further opportunities for our accugas asset.
https://thestreetjournal.org/governor-umo-eno-receives-former-president-jonathan-over-planned-lng-plant-to-be-built-in-akwa-ibom/
Https://theenergyrepublic.com/nigeria-launches-new-fiscal-incentives-to-revitalise-oil-gas-sector/
Looks like first oil is now flowing to Benin port ready for first shipment
https://www.africanews.com/2024/04/24/niger-benin-pipeline-first-drops-of-oil-arrive-at-seme-krake/
Looks like things could be moving quick now in Niger, with the oil minister having a meeting with CNPC and Savannah at the orders of the transitional leader. Seems like Niger are taking an aggressive approach and trying to push operators and partners to come together and be aggressive with their programmes by giving certain directives.
On April 20, 2024, the Minister of Oil of Niger, Mahamane Moustapha Barké Bako, organized a crucial meeting with officials of oil companies and their subcontractors. The main objective of this meeting was to transmit specific directives issued by Brigadier General Abdourahamane Tiani, President of the National Council for the Protection of the Fatherland and Head of State. These directives target the strengthening of oil and gas resource exploitation practices with the aim of consolidating the national economy.
Three key points were highlighted: optimization of contracts, improvement of recruitment strategies, and more rigorous management, marking an important step towards more efficient and responsible management of Niger's natural resources.
This initiative illustrates the government's commitment to maximising the economic benefits of its natural resources while ensuring sustainable and equitable management.
Discussion between the Minister of Oil
And the operators of the National Oil Company, China, Savannah and CEPEX
The Minister of Oil, Mr. Barka Bako Mahamane Mustapha, met Saturday in his office with officials of China National Petroleum Corporation (CNPC), Savannah and CEPEX, major oil companies in Niger.
The purpose of the meeting was to inform these companies of the instructions issued by the Chairman of the National Council for the Protection of the Fatherland, Head of State, Brigadier General Abderrahmane Tayani, within the framework of the arrangements for oil exploitation in Niger.
The meeting focused on three main points: operating contracts, hiring employees, and managing oil resources in Niger.
On the issue of contracts, Minister Barque noted that the national oil company CNPC and WAPCO had always been responsible for hiring their subcontractors, and if they failed to do so, they would bear the consequences. The Minister has already indicated that he will contact the Chamber of Commerce to create a database of companies that will be pre-qualified to provide upstream and downstream services, so as to officially send it to all operators.
Regarding employment, the Minister of Oil indicated that a joint mission from the Ministry of Oil and the Ministry of Civil Service had already investigated the matter at the level of Suraz Company and its subcontractors, then WAPCO Company and its subcontractors, and finally the China National Petroleum Company and its subcontractors. The final report was submitted on April 20 to the office of the Minister of Oil, who will transmit it to the President of the State, who issued his instructions in this regard
https://x.com/nigerar/status/1
Good to see Akwa Ibom Gas development being forefront of mind, with our CPF completion our ability to harness additional gas through our pipeline both through feedstock of new gas and delivery of gas to new customers will transform accugas asset to another level..
https://guardian.ng/business-services/fg-akwa-ibom-unite-to-unlock-economic-potential-of-gas-deposits/
This article is quite clear not all exports has stopped but they are at lows compared to recent highs. 6-8 weeks to get back to recent levels
https://www.argusmedia.com/en/news-and-insights/latest-market-news/2558621-south-sudan-eyes-dar-blend-export-restart-in-6-8-weeks
Https://www.linkedin.com/in/chidimma-alozie/
Gas Commercial
Savannah Energy · Full-timeSavannah Energy · Full-time
Jan 2024 - Present · 4 mos Jan 2024 - Present · 4 mos
On-site
A new hire to focus on Commercial Gas, Joined in Jan 2024 from ANOH Gas Processing Company. This is the company which is bringing online a significant gas to power project towards completion with Seplat in Q3 2024, which is a massive 300 MMscfd.
Her recent experience and knowledge on that project which is coming online will add massive experience to our team. I wonder if this hire is designed to help us increase our gas contracts intime for CPF completion.
Perhaps and probably not out the question completely is could we pursue another Gas / Power deal in Nigeria, we know our preference is an oil deal, but additional gas deals in Nigeria are not bad if fairly priced especially with the recent pricing and sector reforms by the Nigerian government this year.
https://www.linkedin.com/in/julianaeigbe/
Business Development, M&A Joined August 2023
Perhaps if we can agree with chad to Compensate at a discounted amount for chad Doba field, whilst accepting our share in Cotco Separately would be a good outcome for all parties.
I believe someone posted a few weeks ago that SNH were talking to gran tierra about a partnership in Doba oil fields so it is definitely clear that they probably realise that they definitely need a partner to help them run the field as they clearly feel they will struggle to maximise the field otherwise.
We Know that Chad has elections next month on 6th May so perhaps they might take a different view once Deby has consolidated his power, perhaps for the time being he needed to appear with Chad first mentality to gain popularity but could pivot after he secures his win.
Rocky - On your question on Cotco revenues my understanding is that the funds still continue to go into and being held under the Citi Gabon account, which is currently under restriction, the only funds allowed to be paid out the account are for operational purposes, but any dividend payments of shareholders i.e savannah being one of them is currently restricted.
Citi Bank did appeal this last year and there was a hearing in January 2024. I believe our lawyers argued that the stay order should be in place till until the merit of the overall dispute for the Doba fields is concluded in Chad as that should help determine the merit in which Savannah Cotco holding based on the Chad Doba field outcomes. So in essence everything is tied together.
https://dockets.justia.com/docket/circuit-courts/ca2/23-1295
One thing I did observe is Jadestone had their deal terminated and returned to market on 11th April, it was suspended for 2 months from Feb at price 23.75p yet it came to market at a premium and opened back at 28p on re-listing a premium of roughly 18%
A lot of people quoting silly SP prices on SS deal failure cant contextualize, we have been suspended for 18 months with accugas hopefully performing at previous levels or better and we have also completed the Stubb Creek deal, plus on the cusp of CPF completion and potential for a Niger work programme. It would be hard not to still come back at a premium of our suspended price and hence even if SS fails I believe we will have modest premium price return probably in the conservative range of 30-35p as a minimum.