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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.

Although I do agree that there definitely needs to be an update on accugas debt re-structure.

Caution there seems to be differ naira rate from different providers google rate is much lower 1 usd = 896.50 naira

Https://www.southsudanminingjournal.co/en/post/petroleum-minister-backs-inclusive,-fair-global-energy-transition-from-fossil-fuels/548

Rockyride - That's how I read the article as well, plus they did mention one other acquisition by end of 2023 and this was in the half year report so they clearly had runway to do another acquisition alongside SS whatever the outcome.

On Assala Gabon assets the articles implied that the bid deadline set was 20th Jan 2024, so I wonder if things are much more progressed on the Assala assets that yesterday article suggests, Yesterday's article may have been delayed reporting by Africa Intelligence

Fair Point Scotpak the article I posted yesterday seems to suggest that us pursuing Assala assets in Gabon is more a substitute for Chad rather than south sudan so let's see. Africa Intelligence still seems to suggest that SS is still on or at least the article yesterday seems to imply that. Now we can all sit here and guess how much we trust AI news sources, however they were very early in highlighting our interest in Petronas South Sudan assets so here is me hoping there comment is based on more credible actual intelligence from people close to the deal as supposed to a throw away comment based on conjecture on whats publicly available so far.

Vitol seems to be the only trader / financier considering but they want a credible operator to manage the assets, I am guessing that's where Savannah comes in.............. I wonder if we go 50/50 split as yesterday article suggest that we are going for these assets due to Chad nationalisation. If we did get Chad Exxon and Petronas assets as originally intended that would have been circa 20,000 bopd. If we get 50/50 on the Assala assets than that would replace the 20,000 bopd that was intended from chad initially.

Plus going in with a joint bid with the government means approvals will not be an issue as long as Carlyle accept the bid and the Gabonese government want us a partner.

An extension on yesterday article referring to Gabon assala assets..........

"Vitol seems to be the trader most in tune with the government's aspirations. But it does not want to commit to a deal worth nearly a billion dollars without a serious operator capable of helping GOC in the management of complex oil assets."

Gabonese officials are working on a financial package that would enable them to pre-empt Carlyle's assets and to counter an offer from Maurel & Prom.

A team from the Gabon Oil Co (GOC) were in Paris on 17 and 18 January to address the crucial issue of the state's pre-emption of Carlyle's Gabonese assets (45,000 bpd). The delegation met with Carlyle managers and in particular Guido Funes Nova, the Italian who is in charge of the asset sale project. Carlyle wants more details on the financial package envisaged by GOC, and has given it until 20 January to submit its final offer.

After several months of negotiations between oil companies and Libreville, Vitol seems to be the trader most in tune with the government's aspirations (AI, 11/12/23). But it does not want to commit to a deal worth nearly a billion dollars without a serious operator capable of helping GOC in the management of complex oil assets.

Among the firms contacted by GOC is TotalEnergies, from whose ranks its managing director Marcellin Simba Ngabi comes. But the French major does not seem genuinely interested in investing in Gabon, and has in recent years been selling off its assets there (AI, 25/11/21).

Time is of the essence. By the end of 2021, Carlyle had launched the process of selling its Gabonese assets, which it had acquired from Shell in 2017 and then entrusted to Assala Energy. The US group announced last August that it had reached a sale agreement with Maurel & Prom of the Pertamina group.

Game-changer

Gabon's coup d'état on 30 August was a complete game-changer. The new regime quickly announced its intention to pre-empt these same assets (AI, 19/10/23). This was confirmed by junta leader Oligui Nguema in his address to the nation on 31 December. The new Gabonese administration has since then been scrambling to find the funds to counter Maurel & Prom's bid.

Maurel & Prom has since made it clear to its Gabonese counterparts that it is prepared to compromise. If the government agrees to its offer to buy Carlyle's assets, it will gladly sell part of its new holdings to GOC. However, during a trip to Libreville late last year, Maurel & Prom CEO Olivier de Langavant was not received by either the junta leader or any of his ministers.

Given the high value of the transaction, Maurel & Prom is confident. Its directors believe that it will be difficult for the government's teams to put together a convincing financial package and find a technical partner familiar with Gabon

Gabon

Savannah Energy joins the race for a share of Carlyle's oil assets

Savannah Energy, the oil company owned by British national Andrew Knott, wrote recently to the oil ministry with an offer to help it pre-empt the oil assets currently held by Carlyle group subsidiary Assala Energy (AI, 26/01/24). Savannah thus joins half a dozen other oil companies trying to cash in on the planned sale of the assets, which currently produce 45,000 barrels of oil per day. Previously owned by Shell, they have been operated by Assala since 2017.

A few days before the 30 August coup carried out by General Brice Clotaire Oligui Nguema, Maurel & Prom, a subsidiary of Indonesia's Pertamina oil group, announced that it had reached an agreement with Carlyle to acquire the latter's activities in Gabon. Since then, however, Gabon Oil Company (GOC) has officially exercised its pre-emption rights to prevent the sale from taking place. GOC is now looking for an operator and financial partner for the blocks.

Savannah is all the more interested in the Gabonese blocks for the fact that it faces having nationalised the Chadian assets it bought from ExxonMobil in 2022. Situated in the Doba Basin, these are currently producing 30,000 barrels per day. Savannah is, however, represented in Nigeria, Africa's biggest leading economy, thanks to the gas assets it acquired in the Niger delta from Seven Energy in 2019. In the next few weeks, moreover, it is also expected to complete the purchase of the interests of Malaysia's Petronas group in South Sudan in an operation it announced in 2022.

https://www.africaintelligence.com/central-africa/2024/01/30/savannah-energy-joins-the-race-for-a-share-of-carlyle-s-oil-assets,110153645-bre

To add further to that Zengas even Shell recent onshore sale to local independents will drag

https://blueprint.ng/coalition-rejects-shells-divestment-threatens-nationwide-protest-2/

As for where we are on the value ladder, I always use to to compare Seplat share price with our share price as there use to be a broad correlation between the 2 companies prior to suspension.... The Seplat share price has hit an all time high this wee and 75% up since the price at our time of suspension.

I know it's not comparing apples to apples, and probably more like apples to pears, but considering the positive correlation I would imagine there might be some read across from that perhaps not as much as 75% but a small read across of 15% - 25%, also with the fact that with every passing month we reduce overall debt and build cash...........

Zengas - Great analysis as ever I personally would be happy with extended suspension if it means it allows the company time to bring a significant deal to market. I think everyone on here knows that what savannah is trying to do is once in a lifetime opportunity, and with these opportunities nothing is ever as clear cut and simple as mentioned by a few already accugas took a while and now it's a top performing asset with material upside. Andrew strategy is not wrong as everyone is looking to deal make in Africa with majors selling some tasty assets we just need a bit of luck to come our way and there is nothing like additional time to close deals to swing the odds more in our favour.

I am cognisant of the fact that a lot of private investors are frustrated on here but the prize is such that can only be executed with patience as I like to call it the "ZEN" mindsight..............................

Https://careers.savannah-energy.com/job/Victoria-Island-Senior-Compliance-Officer-LA/967565855/

https://careers.savannah-energy.com/job/Esit-Eket-Inventory-and-Material-Supervisor-AK/967562455/

Nigeria team continues to grow shows potential sign of the growth to come from accugas this year

Interesting that they have talked to Vitol and Vitol are pre-dominantly one of our backers on deals so could get interesting.......

Further details on Gabon government pre-emption rights................ $1.3bn a significant premium to what M&P offered nearly 100%...........

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/012924-signal-to-investors-gabon-junta-goes-for-broke-with-13-bil-assala-oil-pre-emption

https://www.intellinews.com/gabon-seeks-1-3bn-funding-to-buy-assala-oil-company-ahead-of-france-s-maurel-and-prom-310103/

By the wording looks like we will help the Gabonese government pre-empt so perhaps a joint bid...............

https://www.africaintelligence.com/central-africa/2024/01/30/savannah-energy-joins-the-race-for-a-share-of-carlyle-s-oil-assets,110153645-bre

Nicely put Kinkell, most people don't realise the value that the accugas asset will unlock this year with CPF completion. There is so much going right for the company still.

- Accugas will see material increase in volumes this year with CPF completion in a few months - No doubt in my mind

- Niger / Benin pipeline complete and on the cusp of commencing exports will mean a better plan for Savannah Niger programme.

- Should see some update on all ICC cases preferably H1 2024.

- Accugas debt re-structure - Hopefully some update in H1 2024

- Potential acquisitions south sudan or another

I truly believe based on organic growth during the suspension period and with every passing month reducing overall debt we should be fairly valued higher than our suspension price especially with whats to come with accugas in the next few months.

Https://www.linkedin.com/posts/makuach-j-makeny-p-eng-spec-35284128_company-review-savannah-energy-plc-activity-7157765544786456576-kQD6?utm_source=share&utm_medium=member_ios

Could we go for Etinde assets with new age now that Perenco have pulled out.

https://www.lse.co.uk/rns/BLVN/termination-of-transaction-jxcjggrtkhm10mm.html