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One thing I found interesting is that in the 8th June update they talked about

"Our focus in the short term is on the recruitment of the in-country management team ahead of completion of the proposed acquisition of the South Sudan Assets"

"The Group has previously used hedging instruments to provide protection against fluctuations and following the acquisition of the South Sudan Assets, the Group is expecting to enter into a rolling hedging programme to provide protection against oil price fluctuations."

Surely it was cart before the horse what made them say this..........................................................................................

Was the transaction further along the line that made them say this with confidence.............................................................

Longshort - Russian interest is not a new threat or an elevated threat. They have been in an around for a while

https://energycapitalpower.com/south-sudan-snp-group-bentiu-refinery-ssop-2023/

https://oilprice.com/Latest-Energy-News/World-News/South-Sudan-Welcomes-Russian-Firms-To-Its-Oil-Gas-Sector.html

Under the current climate and foreign sanctions even a proxy deal would be exposed involving Russia so would be hard for Petronas to entertain such a deal.

Besides very rarely does Russia or it's companies participate in JV's outside of Russia in oil extraction. They prefer local partners where they can impose their influence............You have to remember the other partners in these PSCs are state oil companies of India and China..................................... So the exposure is much greater and Russia foreign policy has always been to operate illusively in the shadows without too much traceability.

Rockyride - oh believe me I am not hinging on that fact. I know they are not worth the paper in normal circumstances. But we don't know the specific clauses that were attached or the petroleum contracts in place as zengas alluded to earlier and how that ties in with the South Sudanese petroleum law. At the end of day I totally agree it's a binary choice between us or no sale, unless they can muster up the loan but there is a slim chance of that. The third option is deal inertia as i referred to earlier continuing to drag the deal without a yes or no..........................

Also usually the Letter of Intent would cover pre-emption rights specified within a timeframe, giving the government a specified time-frame to find a competitive bid obviously a genuine one or to exercise the rights itself. .............................

I was speaking to a M&A lawyer mate of mine earlier this evening. His not oil and gas specific but mainly tech deals……

I asked him what happens prior to an SPA is signed and this is what he told me in most cases before the buyer and seller proceed with the transaction they Obtain a letter of intent from the government. A letter of intent is a non-binding document that expresses the government's willingness to proceed with the sale of the oil assets. It should include the key terms of the transaction, such as the price, the assets to be sold, and the timeline for completion.

So I would imagine that’s what we would have received prior to signing the SPA, hence we proceeded

Moho - I think that question needs to be posed to no one on here is entirely sure if new flow is restricted because of this deal………….. or genuinely could be no updates

I am more interested in all other areas of the business and what the company has been up to as they have been on a news blackout for a while so one hopes they have been making moves..........................

RockyRide - If that's the case I would kiss you................

Come on Mr Andrew Knott we believe in you any oil deal announce in the admission document with oil approaching $100+ in Q4 will do wonders for sentiment..............................

God save Andrew Knott ;)

Zengas - If we are granted an another extension I would want the company to be explicit in regarding the workstreams that are still outstanding but I don't think we will get the detail as you suggest. if there is an extension it would be similar woding used previously "continuing to advance workstreams".

If the due diligence is complete and audited on the acquisition than one would hope they can give a bit more context if extension is granted.

In terms of the timing of this caltech story it does certainly seem convenient as it was public knowledge in regards to Savannah intention to publish admission document by 30th September so I wonder as you allude to that they had to scramble to do something

Porthemeor - the video is nothing new whether they approve save or not is another story but they ain’t getting hands on that kind of money from anyone.

1) we could acquire the assets in the short term for 5-7 years and than transition it over to state.

2) we could give a much sweeter deal on the production sharing fronts.

This whole caltech saga has been designed to perhaps re-negotiate terms that suit them favourably. They may reject savannah eventually remains to be seen but the government has not publicly stated that they have rejected savannah yet. Some articles have implied it based on this caltech deal.

Since the deal was announced not a single person in government has said a word mentioning savannah that could be a good or a bad thing depending on how you see it. If Savannah was totally out of the picture than I would have expected minister to say we have formally rejected savannah as a partner so there are clearly hedging their bets as well.

Besides as far as I could tell from Rockys update on this Petronas we’re as surprised on Monday. So the new buyer would have to negotiate with Petronas as well and that takes months if not longer.

There are 2 options in this really Petronas keep the assets for the foreseeable future or they approve savannah.

In terms of costs once all the due diligence has been done and all the other work streams are complete you wouldn’t have additional costs if the government approval is the only bit outstanding so at this point.

Obviously with every deal there comes a point between a buyer, seller and the approver to make a firm choice and set a non negotiable deadline to either continue pursuing or to move on. Whether we have reached that stage for this deal remains to be seen.

SS government are just putting feelers out there in the market by naming their price for the asset as $3bn in a nutshell to see if anyone bites, but if I was a betting man and if someone was to give them a $1.25bn loan to purchase and intergrate the asset into nilepet I don’t think they would bite. They are not interested in running the asset at this stage they are more interested in the additional $1.8bn lump sum top up.

If they were just interested in purchasing the asset they would just give with give us $1.25bn

Zengas - Who in there right mind would grant a loan of such proportions when the government can barely service employee salaries. There other income stream is not big enough to service debt all it will take is embargo on exports and the debt is stranded.

Whereas an entity can like savannah has access to debt because they can service from another asset like accugas etc..............

And both Petronas and Savannah would have continued to engaged with the government even before the SPA they must have been given some hope thus to come this far.............

No deal is granted prior consent that's just the way things are in deal making.................................

Longshort - We will definitely be engaging with government on this...........................................

1) It's not secret that Petronas have been looking to exit africa since 2021 and the assets have been on sale for over 2 years+, I am sure if there was a genuine competitive bid from a credible entity than they would have submitted it................. In fact even if there was others lurking the sudan civil war since april would have made them run away so the SS government hand has weakened further on this front.................

2) Nobody will pay greater than $1.25bn for the assets and even that seemed like a premium to certain deals that have been reported and as Zengas had analysed .

3) We could receive a matching bid from a credible buyer but same as point 1 why wait till now when they had 2 years plus and also if it's a matching bid what are SS government getting out of it.........................

On the whole Caltech saga I am sure both Petronas and Savannah lawyers would be all over there background checks on the said individuals and will have access to data on them from law enforcements and institutions alike and far greater than what we can publicly find so if they are purposely misinforming than they could be in trouble with the law and could face some serious time if they are not careful...........................

Based on all of the above are Caltech a genuine threat to our transaction I would say chances are very slim less than 5% chance. Could another credible party come possibly yes.......... however based on point 1 to 3 again probably a 20% chance....................

So at this stage it's a binary choice between Savannah being approved or Petronas continue to operate.....................

However judging by the fact that the ministry of finance is struggling to pay salaries and needs cash urgently and almost certainly there is a signing on bonus attached to our deal on completion and approval. Can they afford a no deal scenario where they get nothing for now.....................................

Clear pro investment step changes happening to upstream regulations in Nigeria

https://www.reuters.com/world/africa/nigerias-nnpc-oil-majors-agree-shorten-talks-contracts-2023-09-25/

Longshort - Could be I wonder if anyone has been in touch with IR since Rocky's update on Monday................................

Should cover some minuscule acquisition cost

Haha talk about damage limitations they have clearly realised that the media had caught on that Caltech is a sham entity and now they are trying to justify themselves so they don't appear incompetent

https://www.eyeradio.org/finance-minister-says-no-deal-with-u-s-based-oil-firm-yet/

Personally i don't see why there would be any restrictions to providing operational updates such as ne gas sales agreements....................

I am not referring to further SPA's as I know they may be rules around new SPA's that but I was expecting a Q2 update which was surprising that it didn't come...................................................