Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Todays AI article.
' Potential buyers waiting for Tullow Oil to pull out of Espoir
Production on Baleine, ENI's massive oil deposit in Ivorian waters, is expected to begin before the end of this year. This is great news for Ivory Coast, as the country's output has been down. Canadian Natural Resources (CNR) has struggled to maintain crude oil production levels on Espoir (9000 bpd - block CI-26) and Baobab (8,000 bpd - block CI-40). Its partner, Tullow Oil, is apparently currently looking for a company to acquire its shares.
Afentra, run by Tullow Oil's ex-MD Paul McDade, may be interested. Thierry Tanoh, Ivorian ex-oil minister, has just joined Afentra's board and will likely become its chair in the coming months. This should facilitate such a potential deal. Thus far, the firm has only invested in Angola, with shares of permit 3/05. It is pursuing its search for matured assets in West Africa in which to invest.
Production on Espoir continues to decline, and BW Offshore just sold the FPSO there to CNR. The drilling campaign planned to increase production has been delayed until 2025. Technical problems detected on Baobab's FPSO will likely lead to a suspension of production next year until the system can be repaired. Svenska Petroleum, another one of CNR's partners in Ivory Coast, owned by billionaire Mohammed Hussein al-Amoudi, is reportedly also looking to pull out and is in discussions with several potential buyers.'
26/6/23 Africa Intelligence
'Nigerian businessman Tony Elumelu is investing left and right in the power sector and is now looking into renewables.
Newly-elected President Bola Tinubu's reforms could make the sector even more profitable.
The billionaire chairman of Nigerian behemoth Transcorp, is expected to announce the creation of a subsidiary for sustainable energy this year. Elumelu already works in the hotel and oil industries and is investing more and more in power distribution in Nigeria. He is now counting on reforms that the new president, Bola Ahmed Tinubu will make.
On 10 June, a law allowing each state to manage its own electricity was passed, consequently permitting power providers and distributors to drive up prices. Tony Elumelu was one of the first to welcome the president to his home on 9 March after the election.
In May, ex-VP Yemi Osinbajo (replaced by Kashim Shettima on 29 May) inaugurated a new gas power plant, Afam, in Rivers State, run by Transcorp Power. As Transcorp already owns Ughelli Power Plant (Delta), this brings the group's production capacity up to 1900 MW, or 17% of the country's total installed production capacity.
At the Afam inauguration, Osinbajo announced that the National Council on Privatization, of which he was then chairman, had just selected Transcorp to acquire 60% of Abuja Electricity Distribution Co (AEDC) for $122m'
In the recent annual report for 2022 and in the section dedicated to Nigeria this contains the reference to investing in our people and infrastructure to potentially quadruple the scale of our business - before then moving on to Niger, Chad-Cameroon and then the other segments ie.Sudan. I wonder how far SAVE can scale up Accugas given one of our customers investing materially in the power sector.
From SAVE-
GSA announced with Trans Afam Power Limited on 6 June 2022 to supply up to 35 MMscfpd of gas;
22 April 2022 for the GSA with First Independent Power Limited, increasing the quantity of gas supplied from up to 35 MMscfpd to up to 65 MMscfpd and extending supply to cover three of its power plants, FIPL Afam, Eleme and Trans Amadi;
Also on 31/5/23 they announced buying and transporting up to 20 mmcf/d 3rd party gas which has only come into play sometime around May and will show up in the next H1 accounts and described as a template for significant other opportunities.
-----------------------------------
9/3/23 - 'Tony O. Elumelu’s Remarks at the 240 MW Capacity Afam 3 Fast Power Plant Commissioning'
'Transcorp executed the largest capacity recovery in a privatized power plant in Nigeria, by increasing generated electricity of Transcorp Power Plant in Ughelli from 160MW to 680MW, within a period of 4 years. We transformed Transcorp Hilton Abuja, the flagship hospitality asset of our country, to become the ultimate hospitality destination in Africa. Transcorp Hotels Plc was also discharged from post-privatisation monitoring by the Federal Government in 2019. These successes confirm our business philosophy of building to last, whilst creating significant value for all stakeholders.
I call on the Federal Government to resolve the gas and evacuation challenges that exist in the region, so that the capacity we are recovering in the plants, can be optimized for the good of Nigeria.
I want to use this opportunity to urge the in-coming Federal Government to improve gas supply to our industry and our Afam Plants, ensure the completion of the 330Kv double circuit Afam-Ikot-Ekpene transmission lines, which will increase the capacity of the Afam evacuation corridor.
My vision is of a Nigeria, where time and time again, we can repeat the success we see today at Afam.'
https://www.heirsholdings.com/tony-o-elumelus-remarks-at-the-240-mw-capacity-afam-3-fast-power-plant-commissioning
10/5/23 Elumelu’s Power Companies To Generate 2000MW As VP Osinbajo Inaugurates Transcorp Afam 3 Fast 240MW Power Station.
With an already existing power plant in Afam, this brings the cumulative generating capacity of the plant to 1,000MW.
Tony Elumelu's Transnational Corporation Plc (Transcorp Group) is a publicly quoted conglomerate, Our businesses include Transcorp Hilton Abuja, Transcorp Hotels Calabar, Transcorp Power, Transafam Power, and Transcorp Energy. '
https://persecondnews.com/2023/05/10/elumelus-power-companies-to-generate-2000mw-
Eni reported by AI had agreed to sell its Tunisian assets to Save late last year but was suspended by ENI due to government disarray.
In yesterdays FT - ENI just bought private equity backed Neptune Energy "in the largest cash deal in Europe for almost a decade" (which will not now ipo) for $4.9b.
Net debt assumed at $1.7b. German assets not part of the deal. Part of the reasoning for the deal is cited as also "accretive to its own carbon metrics."
Deal expected to close by the end of March 2024.
From Neptune
Produced 135,000 boepd in 2022 .
552 mmboe 2P. 24/% oil. 76% gas (75% in Europe + 25% Asia/Africa)
468 mmboe 2C. 32% oil. 68% gas (65% Europe + 35% Asia/Africa).
11 years reserve life.
Net debt reduced from $2.1b in 2021 to $1.7b in 2022.
https://www.neptuneenergy.com/sites/neptuneenergy-corp/files/investor/reports-and-presentation/2023/FY%20results%202022/2022%20Neptune%20at%20a%20glance.pdf
Q1 20-23 results production 142,000 boepd.
Revenue $1.425b .
Net Debt $1.546b.
I think their average price was about $110/boe but the european taxes (windfall) much, much higher in that higher price environment.
"Free cash flow in the first quarter of 2023 was $188.5 million"
"Our tax charge in the first quarter was $851.7 million, representing an effective tax rate of 80.5%."
https://www.neptuneenergy.com/sites/neptuneenergy-corp/files/investor/reports-and-presentation/2023/Q1%202023/Neptune%20Energy_Q1%202023_Results%20Statement_Final.pdf
Food for thought given the Kosmos valuation which has now fallen back to $2.7b + $2.1b net debt. Has 550 mmboe 2P and 63,000 boepd production. Valuation has fallen back with lower oil price and delay to Tortue gas start-up which was to help drive them on to a net 90k boepd by year end.
Noting the Neptune metrics above, taking into account the high taxes etc, how does a valuation for Savannah compare reaching say $500m FCF or 2/3rds of Neptunes fully year FCF of $754m - or 2/3rds 2P+2C giving approx 370 mmboe 2P + 300mmboe 2C. It's possible the next acquisitions will reach that in terms of FCF and 2P/2C from where we are now.
South Sudan which at the moment appears to be 50,000 bopd+ and likely $800m at most - down from the up to headline $1.25b, 'at least' 1 other hydrocarbon acquisition by year end (indicating more to follow), Niger start-up fast approaching - if there is no dilution then a 100p target represents a $1.7b fully diluted valuation allowing a similar $1.5-$2.1b net debt range which at the moment is currently around $400m before South Sudan.
off topic while we wait and not for me. reference to save and sudan.
https://www.***************************/wildcat-petroleum-ceo-100-expects-profitable-dividend-paying-company-with-no-debt-video/4121121880
From 'N'Djamena Actu' this evening
The Transitional President, Mahamat Idriss Deby itno, has dispatched the Minister of State, Secretary - General of the Republic of Chad,
Gali Ngothe Gatta to Yaounde. He had intense interviews with President Paul Biya at the Palais de L'Unite on the afternoon of June 19 2023.
Speaking to the press, Mr Gali Ngothe Gatta says " We have come to carry a message from Chads Transitional Preident tp President Paul Biya to thank him for all the support he has given Chad in the transitional process of managing its oil". He said that the incident between the two countries is "finally closed".
I suppose we may hear what Cameroon in due course re SAVEs interest in COTCo and the proposed 10% interest sale that was suspended supposedly last week.
June 16, 2023 (JUBA) – South Sudan has announced that it will import essential oil supplies through Djibouti and Kenyan ports instead of using Port Sudan due to ongoing conflict.
Minister of Petroleum, Puot Kang Chuol, stated during a press briefing that the Ministry, with the approval of the cabinet and the country’s top leadership, including President Salva Kiir and First Vice President Riek Machar, has formed an Emergency Response Team.
“The Emergency Response Team, guided by a well-defined and structured contingency plan, will proactively mitigate the impact of the fighting in Sudan by rerouting all logistics and transportation of critical materials, chemicals, and equipment,” said Minister Chuol.
He emphasized that the crisis has caused mild disruptions in the logistics and transportation of essential supplies to South Sudan’s oilfields through Port Sudan.
“To avoid delivery disruptions, especially of chemicals used in production, we have decided to import essential supplies through the Mombasa port in Kenya. We are also exploring the utilization of Djibouti’s port,” explained Chuol.
The minister assured that the current inventories of critical materials, chemicals, and equipment in the oilfields are sufficient to sustain smooth production and exportation of crude oil for the next three months. The Emergency Response Team is actively working with stakeholders and their Sudanese counterparts to ensure uninterrupted crude oil production in South Sudan amidst the ongoing conflict.
Chuol further reassured that all oilfield facilities, including pipelines, pump stations, field processing facilities, field surface facilities, and the export marine terminal in Sudan, are well-protected and safe from damage. South Sudan continues to produce and export an average of 169,140.81 barrels of crude oil per day from its oilfields.
The Emergency Response Team maintains constant communication and cooperation with relevant authorities at the Port of Mombasa in Kenya and the Port of Djibouti to ensure timely clearance and transportation of critical materials, chemicals, and equipment destined for South Sudan’s oilfield activities, if any are present at those ports.
Given South Sudan’s heavy reliance on oil revenue to finance its annual fiscal expenditure, the country is currently facing economic challenges. The crisis in Sudan arose from major disagreements between the Sudan Army Force and the Rapid Support Force (RSF), particularly regarding the integration of the RSF into the army.
In a separate but related matter, South Sudan’s Minister of Presidential Affairs, Barnaba Marial Benjamin, urged investors to consider opportunities in the country. He highlighted the vast natural resources available, which could benefit South Sudan, the region, and beyond.
https://sudantribune.com/article274486/
Slightly different take though it is 3 day demand and wants a share of the oil revenue or halts payments to the Sudan Govt.
JUBA, June 19, 2023 – South Sudan refrained from commenting on reports that the Sudanese paramilitary Rapid Support Force (RSF) issued a three-day ultimatum to shut down oil pipelines in the militia-controlled areas unless South Sudan shares oil revenues or halts payment of transit fees to the military-led government.
Mayen Wol Jong, Sudan’s undersecretary of the Ministry of Petroleum, stated to Sudan Tribune on Monday that oil continues to flow to international markets, with Sudan being the guarantor and protector of all oil infrastructure passing through its territory.
“As of now, the oil is continuing to flow. There are no disruptions,” said Jong in response to media reports.
He declined to provide further comments regarding the RSF’s conditions for the oil to continue flowing through Sudanese territory. None of the parties involved have officially confirmed these reports. However, officials familiar with the situation informed Sudan Tribune last week that RSF representatives have been pressuring for a share of the rental and transit fees.
Lual Achuek Deng, a member of parliament from South Sudan, expressed concerns on Saturday about the ongoing conflict in Sudan, fearing it could negatively impact oil revenue generation. Deng, a former Sudanese Minister of Petroleum prior to secession in 2011, shared his views with United Nations-sponsored Radio Miraya during a discussion on the annual budget. He suggested that the conflict in Sudan might have contributed to the delay in presenting the budget to parliament.
Observers and economic analysts have voiced concerns over the potential risks to South Sudan’s economy and budget, as the conflict between the RSF and the Sudanese armed forces puts its oil, the mainstay of the economy, at risk.
The RSF has demanded that South Sudan either stop funding the sovereign council’s military leadership or share resources, or the pipeline infrastructure will be shut down.
This presents a critical dilemma for South Sudan, with fears that the RSF may disrupt the oil flow if their demands are not addressed in time. Compliance could lead to retaliation from the Sudanese armed forces, potentially preventing South Sudan’s oil export through Port Sudan and crippling the nation’s economy. Conversely, if South Sudan continues to provide funds, the RSF threatens to shut down the pumping station at Heglig, obstructing the oil flow to the port of Sudan.
The RSF controls the pumping stations at Heglig of South Kordofan, while the Sudanese armed forces oversee the transport routes to the port of Sudan, where the oil is loaded onto cargo ships for international sale. The consequences of a shutdown would be enormous, affecting the government’s ability to function and provide essential services to the people.
https://sudantribune.com/article274555/
Wasn't sure at first, but A C gets around. This weeks South Sudan Energy conference Wed 14th - ending today friday 16th June 2023.
https://www.flickr.com/photos/energycapitalpower/52978244306/in/photostream/
https://www.flickr.com/photos/energycapitalpower/52978695623/in/photostream/
https://www.flickr.com/photos/energycapitalpower/52977638752/in/photostream/
https://www.flickr.com/photos/energycapitalpower/52978689453/in/photostream/
https://www.flickr.com/photos/energycapitalpower/
This should actually be very good for us should it not as our contracts are priced in dollars and this should help with the previous forex losses and means we can take cash out of the country easier.
From the Calabar contract (Ibom and Unicem the same) which are priced in dollars.
From the listing doc 9:16 - All payments under the agreement are to be made: (a) in the Naira currency using the applicable sell rate for the conversion of US$ to Naira published by the Central Bank of Nigeria on the business day immediately prior to the date of payment"
We were pegged to the central bank rate of about 477 to the dollar yesterday - in reality we get paid more naira instead of being locked to the fixed central bank rate against the previous unofficial rate when it came to us getting dollars and making payments in dollars to suppliers etc/finance/interest
14 Jun 2023
Nigeria’s central bank allowed the naira currency to drop as much as 36 percent on the official market on Wednesday, days after President Bola Tinubu suspended the central bank governor who oversaw much-criticised multiple exchange rates.
For decades, multiple exchange rates had led to foreign currency shortages. Under suspended apex bank chief Godwin Emefiele, the situation worsened, making it difficult for investors to take out money from Africa’s biggest economy.
Traders told the Reuters news agency the central bank had removed trading restrictions on the official market, which drove the naira to a record low of 750 to the dollar on the official market, down from Tuesday’s low of 477 naira to the dollar.
The new rate is equivalent to the black market rate which has stood at approximately 750 to the dollar since last year.
This was the first time since 2016 that the naira had recorded a big fall on the official market before the central bank introduced a managed exchange rate in 2017.
Charlie Robertson, head of macro strategy at FIM Partners, said, “A much-needed devaluation which takes the currency from 50 percent overvalued to about 5-10 percent [cheaper]. This should improve the current account and improve the long-term investment climate.”
The central bank did not immediately comment.
Tinubu inherited anaemic economic growth, record debt and shrinking oil output and has promised to reset the economy. He has also said some decisions including removing a popular petrol subsidy would impose an extra burden on citizens but free up money for education, regular power supply, transport infrastructure and healthcare.
Foreign investors had flagged the forex restrictions as one of the biggest impediments to financing in Nigeria, Africa’s biggest oil producer.
Unifying the exchange rate and scrapping the subsidy were the most immediate tasks that Tinubu faced. Delivering these within the first two weeks of his presidency has been well received by investors and economists.
https://www.aljazeera.com/news/2023/6/14/nigeria-allows-naira-to-drop-more-than-36-on-official-market
If you use 35000 euros fixed monthly costs for the electricity production which they say is all in - that equates to $605,000 so you could knock off $6.60 boe from the cost of a barrel production.
However there’s over $2m financing costs annual so that is about $21 boe.
The only way they can escape that is to radically get production up to minimum 1500 bopd+ imo. Otherwise as they say, they contemplate paying bonuses for 75-125-150-225 bopd in the USA from likely equity ie share issues.
They produced 90581 bls in Tunisia, 137 bls condensate and 970 boe gas = 91,688 total bls.
They say their production costs were $4.328m so works out at $47.19 boe.
In addition their admin alone was $4.951m or $54 boe.
This was 6 months to end of Sept 2022. Since then oil, gas and electricity prices have fallen from their peak and explains the higher revenues for that period in the first place.
Yes expecting it definitely TYB. You haven’t addressed the dire position they are now in other than call it gibberish. I presume what you said on the 18th May that “The fact is if there is news to release the company legally has to, SO CLEARLY there is no news to release good or bad”
The gibberish is - that the company sat on news for eight and a half months until barely a week ago to say they couldn’t sell any oil - and with the dire state of the accounts and you being the inexperienced dismissive that you are think they won’t need more cash/dilution to run the show at some point. I guess the words authority to issue unlimited shares are beyond your grasp.
For 12 months to end March 2022 Revenue = $8.239m.
Production costs $2.21m. Depletion & Depreciation $2.24m, Admin $12.526m, Finance costs $2.278m = Loss $8.746m.
Link - https://wp-zenith-2020.s3.eu-west-2.amazonaws.com/media/2022/08/Annual-Report-Zenith-Energy-31.03.2022.pdf
For following 6 months to end Sept 2022 Revenue = $11.571m.
Production costs $4.328m, Depletion & depreciation $578k, Admin $4.951m, Finance expense $1.45m. Net profit $119k.
Link - https://wp-zenith-2020.s3.eu-west-2.amazonaws.com/media/2022/11/Zenith-Financial-Statements-30-September-2022-FINAL.pdf
They had cash of $1.465m at 30/9/22
9 months on as of now, they haven't sold any oil since and revenue from electricity likely running at 1.8m euros or $2.6m/year.
They made their interest debt payments on 30/1/23.
They raised £2.3m/$3.85m on 28th Feb 2023.
They made their latest interest payments on their 10.125%, 10.5% & 10.375% bonds 4 weeks ago.
Their finance expenses alone are about $2.6m-$2.8m yr so when you add that to their admin, ie wages etc there is more going out than coming in - the electricity side will barely cover that never mind admin.
They have long term bonds to pay back of $17.885m and short term loans of $5.185m to repay.
No revenue - only electricity this past 8 months and if they put $2m into the US there's no way i see them making any dent in making anything for shareholders when they talk about issuing bonuses on 75 bopd being first target reached. That's laughable after 14 years that this is deemed progress.
The AGM resolutions only had 10% of all shares voted but passed all resolutions including the ability to issue an unlimited amount of shares and also the consolidation was voted through. All there for reading in the above links and the agm results.
If they resolve the Tunisian oil sales there's not enough to cover themselves. Like the last 14 years they continue to hop from region to region without any success.
I expect consolidation and a fundraise as i highlighted some months back which has been their usual form. Otherwise why have and need the ability to issue an unlimited amount of shares.
Since September 2022 the only revenue/income that i can see is from the electricity side of things in Italy which really isn't enough to cover the company costs.
I personally think the US is a knee jerk reaction to nothing happening in Africa and is from a really low production level akin to where they were 14 years ago. I'll leave others to look indepth at Stateside.
In the short -medium term, i expect more dilution after the consolidation which was approved at the agm.