focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Mukesh and Komakino - with every extension I have always felt that the intention is to return to market with a deal I am sure in the back of AK mind you don’t want to have wasted 14 months in suspension to not come back with a deal and than ask for another suspension to pursue deal making strategy will be hard sell to shareholders so the idea being come to market with a deal following the current suspension period would be the most prudent and sensible course of action now whether that’s with South Sudan or another deal or South Sudan and another deal who knows. Now since December 22 it’s only recently after over a year we have started to get a little more commentary on the deal itself:
1) first time since suspension savannah added a little context to the rns on 1st Feb 24 - saying in country approvals are being pursued this can be viewed in many ways it could mean from Savannah point of view they are reaching a stage where they have completed all they need to and have satisfactory lined up t
Workstreams in order to complete that to me is how I read it effectively they are now saying the ball is in SS government hand but savannah has got everything ready to go if approval is granted.
2) Shore capital - saying realistically expect admission document in the new suspension window.
3) Africa intelligence saying on 30th Jan article due to complete in the next few weeks.
4) the IC interview loosely touching on completion shortly.
Now that’s the most drip feed or breadcrumbs we have had since deal announcement which has been over a year in the last few weeks.
Folks can view the above with caution or optimism……. ……………….
Https://www.energyvoice.com/oilandgas/africa/547530/exxon-mobil-to-exit-equatorial-guinea-after-nearly-three-decades/
We know that Equatorial Guinea is still looking for a partner to continue running the fields so probably even though exxon is handing over to them they don't have the operatorship experience or capability to run assets
https://www.africaintelligence.com/central-africa/2024/02/08/teodorin-obiang-offers-zafiro-and-fortuna-fields-to-eni,110157308-bre
Seems like buyers already in place for total energies
https://www.upstreamonline.com/production/totalenergies-heading-for-the-door-pouyanne-says-niger-delta-oil-exit-deal-soon-/2-1-1595568
Https://www.union.sonapresse.com/gabon-economie/rachat-des-actifs-dassala-gabon-la-goc-fait-valoir-sa-preemption-27227
ONE month and a half after the instructions of the President of the Republic, Brice Clotaire Oligui Nguema, concerning the
purchase of Assala assets, Gabon confirms having received several offers from large companies and reassures public opinion
of its ability to raise funds as part of this operation. Indeed, while rumors were circulating relating to
an alleged inability of the State to raise the funds necessary to exercise pre-emption for the repurchase of Assala,
as announced by the Head of State in his speech to the Nation, the Director General of Hydrocarbons, Ernest
Ndong Nguema, brushed aside this information.
"I would like to remind you that the pre-emption process as defined in the law, that is to say the Code of
hydrocarbons, provides that in the event of transfer or assignment of rights, the State has 60 days to make
pre-emption. In the event that the State does not exercise its right of pre-emption, the national operator (GOC) has at its discretion
45-day turn to pre-empt. The GOC exercised this right of pre-emption on November 25, 2023, therefore before
the expiration of the deadline which was December 3, 2023. This was the only deadline that had to be respected,” he declared.
And to continue: “The sellers and the GOC are now engaged in a negotiation which should lead to the
signature of a new deed of transfer, which defines the deadlines for the payment and effective transfer of the asset.
Concerning the State's capacity to raise the funds to make this acquisition a reality, I would again like to reassure
public opinion. Several opportunities and financing mechanisms are available to us. Our attention is focused
therefore on the assurance that we select the best option from the point of view of the interests of the State ".
Total looking to exit Nigeria onshore as well, same operating assets as shell sale of 30% stake for $2.4bn to local independents announced weeks ago. Total has 10% stake in these assests so simple maths would suggest Total stake is worth circa $800 million. I wonder whether we would be interested in these.............................
https://www.reuters.com/business/energy/totalenergies-looks-exit-nigerian-onshore-oil-following-shell-2024-02-08/
Looks like Equatorial Guinea is still trying to find some buyers for Zafiro and another field.
https://www.africaintelligence.com/central-africa/2024/02/08/teodorin-obiang-offers-zafiro-and-fortuna-fields-to-eni,110157308-bre
Interesting interview for IC, one thing I did pick up if the mention of credit guarantee of the accugas asset and if Savannah can get a similar credit guarantee on south sudan than it would be a great deal, could world bank provide a credit guarantee for this purchase as part of it's development goals for the country and seen as the country is heavily reliant on oil revenues to fund national budget ?
Gas shortage supply to Akwa Ibom Power plant, we supply 20 mmscfd which ended December 2023, Can we materially increase our supply with a new gas contract and significant volume or is there a constraint until CPF is completed. Definitely an opportunity here to increase volume significantly.
https://leadership.ng/power-grid-restored-as-tcn-blames-collapse-on-gas-shortage/
https://tdpelmedia.com/power-grid-restored-as-tcn-blames-collapse-on-gas-shortage/
GSA to supply 20 MMscfpd of gas to Ibom Power Company Limited, operator of the Ibom power station, for a ten-year period which ends in December 2023 with a take-or-pay commitment of 80% of the contracted volume. The GSA is expected to be renewed and discussions are ongoing. The Ibom power station has a current installed capacity of 191 MW and is owned by the Akwa Ibom State of Nigeria.
My timeline expectations and the patience timeframe I am willing to give for suspension to continue until maximum timeframe is 30th June 2024. My reasons are as follows:
1) Q1 2024 results released by than - usually comes 2nd week of April 24
2) Full year 2023 results released by than - usually comes 2nd week of June 24
3) Hopefully update on accugas debt re-structure by than
4) Hopefully update on ICC cases by than.
5) CPF completion + material increase in accugas contracts
6) Time to execute an additional deal or alternative deal whatever the SS outcome.
7) South Sudan oil and power 2024 oil conference last week of June so it will either support or expose SS government to drive investment. Our deal decision eill sway investor interest and confidence on event and investment environment in SS
8) Progress and update on Niger work programme and Niger export pipeline.
I believe in my mind 30th June 2024 is the upmost period I am willing to accept in my mind, which allows enough time for the company to progress all of the above but also underpin the company and protect and enhance shareholder value beyond our suspended price.
After 30th June 2024, I don’t believe there is any sensible justification for the company to remain suspended beyond this date if they aren’t able to progress a few of the above items and would happily accept coming to market whatever the status of progress on above.
Some may disagree but I believe that timeframe allowed is the ideal timeframe in my mind
Thanks Rockyride - I am still of the opinion that with accugas with CPF completion will transform the company into another level in a few months time. One thing I will say is that all deals in Africa are difficult even Nigeria as we witnessed first hand how long it took for the accugas deal to reach conclusion that being said we have 3 offices in Nigeria and big Nigeria staff base we should still pursue another asset base in Nigeria to fully utilize our Nigerian staff and maximise efficiency
I just had a thought this morning and wondered if anyone had a view on this and whether it's technically and legally possible. Could we complete another deal whilst we wait out decisions on SS government prior to the SS Deal. What I mean is return to market with another deal which enlarges the company so it doesn't need to stay suspended prior to the SS Deal, than the SS deal can play out in it's own time with the deal still intact in the background if it continues to take longer.....................
I wonder if that's actually possible in this same suspension window and whether legally and technically allowed given that we were suspended for the SS Deal in the first place so would be able to re-order the running order and execution of deals ?
Probably a legal or a Nomad question one would think ?
As with all deal making there is an escrow process so folks can google it, so all parties to transaction feel comfortable to commit to each other using a third party a legal firm. So the South Sudan government can feel comfortable that Savannah can finance the acquisition and has backers and the debt providers can feel comfortable that they have assurance on government approvals, It's a matching process and it happens in tandem, you can have the approvals happen later but in this case I believe Savannah and Debt providers would want approvals and debt execution to happen concurrently to give assurance to both parties, so the escrow process allows for this and both parties can not say you are not providing debt or you are not providing approvals, they can both satisfy each other through escrow.
It really comes down to SS government will to complete this deal and let's be frank that's the only thing that matters with this acquisition and nothing else really
Savannah Energy+ (SAVE, Suspended, Under Review)
South Sudan acquisition update
In a short RNS this morning, Savannah has confirmed that (further to its prior announcements) the company continues to advance the various workstreams – including the receipt of relevant approvals in-country – required to complete the acquisition of PETRONAS International’s South Sudanese portfolio.
Regarding this major proposed reverse takeover transaction, Savannah reports today that AIM has granted a further extension to 2 April, with subsequent updates to be provided as and when appropriate.
Given the further eight-week extension that has now been secured, regarding this obviously significant transaction, we believe that publication of the related AIM admission document can be very realistically expected within this newly updated timetable – and will look forward to further news in due course.
Whilst acknowledging that publication of the admission document (relating to the South Sudanese reverse takeover deal) had originally been expected to occur at an earlier stage, we continue to sense that Savannah is pressing on to ensure that this can occur as soon as possible – noting AIM’s granting of the further extension announced today.
We will obviously continue to look forward to admission document publication, at which point we will be in a position to fully assess the incoming South Sudanese assets. Whilst the shares will naturally remain suspended ahead of this, we continue to forecast material organic revenues and cash flow in the meantime. Our last-published Risked NAV estimate stands at 45p/share.
Https://www.southsudanminingjournal.co/en/post/petroleum-minister-backs-inclusive,-fair-global-energy-transition-from-fossil-fuels/548