Member Info for ZENGAS

Not sure if being non operator will be any quicker re sign off if you look at Afentra - released their adm doc 2 months after the SPA was signed with Sonagol in Angola on 28/4/22 so almost coming up on a year for them waiting and as non operator. Suspended in total for almost 10 months.

8/10/21 it expressed an interest in Angolan assets that might trigger a RTO. Suspended from trading same day.

3/2/22 & 11/4/22 RNSs re still negotiating.

28/4/22 SPA signed with Sonagol for production & blocks as non operator.

10/8/22 Adm doc published and recommencement of trading.

12/1/23 The SPA with Sonagol was extended to 31/3/23

When i first saw the formation of Savannah Energy WN Ltd on 1/1/22 i thought it might be 'West Nile'.

I believe it could be 'White Nile' for the main river that flows through South Sudan and where some hydro electric plans are underway by the government. Save also mention hydro power as possible projects for their renewables division.

Renewables potential in South Sudan is reported as being around 2.9 GW with diesel generators being the main source for power currently. Numerous articles out there on South Sudans electricity development plans.

Agadem, it's hard to predict what we should come back at but that is why it is absolutely worth understanding the Africa focussed valuations in that peer group.
Imo not understanding those valuations sells our own expectations short on both value and price expectations and there's absolutely no reason why the valuation gap to the likes of Tlw & Kos should not be substantially narrowed (or better when compared to TLW alone) .

Important to see the institutions on the other side of the Tullow merger opposed it and wanted $500m more on the table and thereafter the merger was cancelled rather than sell themselves undervalued.

In that Peer group mentioned yesterday in the broker coverage of where Save should move to in ranking -

Bottom of the group in 14th for production and 13th for reserves is Panoro Energy with -
35 mmbo P2. 7.7k bopd production (1.2k Tunisia,1.9k Gabon, 4.6k Eq Guinea).

Top 20 shareholders hold 51%. CEO 638k, Chairman 3.6m, with the rest of the directors/management holding individually from 25k - 293k shares . Another reason why i don't put much emphasis on the size of director holdings at Save being any different or lacking.

113.8m shares X 28.78 NOK (£2.43) = £276m m/cap + $48m/£39m net debt = £315m EV.

It's not hard to see what the similar sized 33 mmbo 2C project in Niger (will be 2P when sanctioned) could be worth when off the ground.
With the export pipeline and the low risk potential for 10+ times current reserves i see this as being able create multiples of value and this is where i have been most annoyed (rather than suspension) in moving it forward. Though seeing the rationale for acquisitions and the cash it would throw off compared to those with a much higher net debt pile, i can and have lived with the Niger delay in seeing the overall bigger picture.

Existing production 28k boepd net + 79 mmboe 2P.
I think South Sudan production should be 50k+/day and about 300 mmbo 2P if AI is correct.
If Exxon Chad is firm = 11k/day + 55 mmbo 2P.
Sanction Niger 2C = 33 mmbo 2P.

Production 89k boepd. 465 mmboe 2P (+ possibly over 300 mmboe 2C + over 2.5 billion bls recoverable exploration potential).

Net debt was to be $565m end 2022 but Petronas Chad didn't go through so less about $165m = circa $400m net debt.

$1.25b for S.Sudan less i expect $350m for discount back to effective date = $900m.

That's how i arrived at my $1.3b net debt figure for Save yesterday in comparing to the current 60k/day producers of Tlw & Kos with net debt of $2.3b + $2.1b respectively. (Kos 580 mmboe 2P. Tlw 240 mmboe 2P).

We just need successful S.S deal closure or more in the wings that will come through. Personally i don't fault the strategy and if the significant cash flow helps unlock Niger to the tune of 4-500 mmbls reserves given the low risk exploration and a 25-50k future production range it will be an absolute giant with the much lower net debt pile by comparison.

...take it's course.

Agadem your thoughts & posts are appreciated. I rarely contact IR or the PR Co. I've found there's little that they can tell you that's not in the public domain other than clarify some query. I fail to see how the nomad is so called all over this . What is it that Save have done wrong ? Just wondering how you come to the conclusion that the IIs are not happy about being suspended ? Surely not in a rush to sell or something in the next few months ?

What's wrong with being suspended in light of the biggest singular deal yet of $1.25b ? There is no other way around it. I doubt we would be suspended if the 2nd C.C deals had gone through when calculating our combined value ? IIs are aware of the acquisition strategy as much as we are.

IR/PR wouldn't comment on all the A.I. deals Save are mentioned in that i've shared on the boards ? S.S was flagged 10 months before any news from Save, as were a number of other possible deals. (Eni, 2nd Exxon, Occidental amongst others).

The valuation is not hard to get on top of here depending on deal size.

The 4th Jan 2022 coverage by FC showed a peer group of 14 O&G Cos re production. Kosmos 1st, Tullow 2nd with Save post CC moving to 7th.
On a 2P reserves basis Kosmos 2nd, Tullow 5th & Save post CC 7th.

The S.S deal (not even counting the Exxon CC deal) would catapult Save to 1st on production and joint 2nd-3rd in terms of reserves and well ahead of Tullow.

The TLW valuation today stands at $2.3b/£1.84b net debt + £510m m/cap = £2.35b EV.

Save with an overall net debt on all assets of $1.3b/ £1.04b gives some £1.3b valuation comparable ie 1.4b f/diluted shares = 93p I'm not even going to go and try and point out what the difference to Kosmos is but is about 190p on a current EV of £3.7b.

If nobody can see the West African value disparity particularly to Tullow, then so be it but it's clearly set out in the peer group ranking from much earlier in the year by the broker coverage. To emphasise the value disparity you have TLW/KOS paying down $2.3b & $2.1b respectively on 60k boepd production versus circa $1.3b to Save from a similar or greater production level. That's about $1b of less debt and interest to service that the other 2 Cos have to contend with which is another valuation driver for Save.

Fact is, it will be quicker to pay down $1.3b net debt with 60k production rather than $2.3b and 60k production. That net debt reduction relative to Save is worth another 74p at some point - perhaps 20-25p/year s/price growth.

So i can't see what the IIs or anyone can be unhappy about. There's a prize to play for plain and simple and being suspended is one of the incoveniences of that for now. Just let's hope the S.S deal concludes in it's entirety or others take it's place in the next 12-18 months in getting to that peer group ranking. I can't see the strategy being derailed solely on the basis of a few difficult deals. No pain without gain and for now i'm content for things to t

I wonder if this is all the Save foreign staff required to run the operations ?

Also why this move and not some kind of legal action in court (maybe yet to come, who knows or is court action on rocky ground for Chad ?).
If operations are severely constrained i'd expect an announcement soon from Save.

22/12/22

'Savannah staff threatened with expulsion over ExxonMobil deal

Chad has no intention of leaving Savannah Energy in peace after the British junior announced on 9 December that it was taking over all of ExxonMobil's assets in the country "despite the express objections of the government". After contesting this acquisition on 13 December, describing it as an "illegitimate transaction" that breached the pre-emptive rights of the state-owned Société des hydrocarbures du Tchad (SHT) (AI, 16/12/22), the energy minister Djerassem Le Bemadjiel ratcheted the pressure up another notch on 21 December. According to our information, he travelled to the production site in Komé in the company of the president's secretary-general, Gali Ngothe Gatta, in order to inform Savannah executives that they would have to leave the country.

The previous day on 20 December, the minister for public security and immigration, Idriss Dokony Adiker, issued a decree cancelling the entry visas and residence permits of eight Savannah employees, among them the deputy group treasurer Aubin de Blanpré and the engineers Grant Mackenzie and Ruxandra Zanfirescu. The document, which Africa Intelligence has seen, specifies that the persons cited must leave the country within 48 hours, so by 22 December.

Savannah spent many months negotiating the acquisition of ExxonMobil's 40% stake in the seven fields in production in Doba and in the Chad-Cameroon oil pipeline. However, the US major has been struggling to extricate itself from the country, having failed to reach an agreement with the government over its final tax settlement (AI, 08/11/22). ExxonMobil's last remaining executives flew out of Chad on the evening of Friday 9 December just before Savannah issued its press release.'

22/12/22

Niger and CNPC set to clinch Agadem pipeline deal

A new round of talks on the Agadem crude export pipeline was held in Paris in early December between Niger and its partners from China National Petroleum Corp (CNPC). A final agreement is expected in January.

The latest round of talks between Niger's oil minister Mahamane Sani Mahamadou, aka Abba, and China National Petroleum Corp (CNPC) on the governance of the Agadem crude export pipeline took place at the upmarket Fouquet's restaurant in Paris from 2 to 9 December. The aim was - as for the previous round held at the five-star Prince de Galles hotel in Paris in July (AI, 09/09/22) - to reach agreement on the role of the various partners, the involvement of Niger and Benin firms given that a large part of the logistics is in the hands of locals, and the financing of the 15% stake that Niger will hold in the pipeline. The line is expected from late 2023 to carry 100,000 barrels per day from the Agadem field in Niger to the Beninese port of Sèmè, 1,980 km away.

Final agreement planned for January
The two parties signed a memorandum of understanding after the talks in Fouquet's and a final agreement is expected to be signed in January. Nearly $100m of the Niger government's 15% shareholding has already been paid via the country's 2022 government budget and another tranche will be completed by a bond issue next year. The objective is to reach $330m. The total cost of the project is estimated at just over $2.3bn.

According to our sources, the CNPC delegation sent to Paris in December was led by a heavyweight from the group: Youchao Liu, a director of CNPC Exploration & Development Co (CNODC), CNPC's Dutch-registered subsidiary, which will hold the shares in the pipeline. Liu is a former head of the group's operations in Sudan and in Kazakhstan. He returned to work at the company's headquarters in Beijing two years ago.

Liu gets involved
Liu took an active part in the recent talks in Paris, which was not the case in previous rounds, during which CNPC executives simply listened to the grievances of the Niger delegation. Abba, the son of former president Mahammadou Issoufou, was accompanied by his director of hydrocarbons Zakari Oumarou Kabirou, the director-general of the Société Nigérienne du Pétrole (SONIDEP), Ibrahim Mamane, and the presidential adviser for mines and oil, Mamadou Sougou Dikouma. The latter two are close to President Mohamed Bazoum. The four men were accompanied by one of the directors- general of financial operations at the finance ministry, Kader Amadou.

(It should say 35% and not 25% but is correct at the end when they say SHT would have 60%)

Perenco takes on the role of banker for SHT in Petronas Doba takeover

The Chadian state wants to avoid being left on the sideline of the sale of the majors' shares in the historic Doba blocks. To influence the negotiations, it has enlisted the services of an unexpected player.

The scene was set in Kuala Lumpur on the first weekend of December. Chadian Finance Minister Tahir Hamid Nguilin and Oil Minister Djerassem Le Bemadjiel arrived at the headquarters of the Malaysian state-owned major Petronas. In their briefcases was a proposal to buy Petronas's 25% stake in the Doba blocks. Days before, ExxonMobil had sold its 40% stake in the same blocks to Savannah Energy.

Savannah Energy had also made a $266m bid for Petronas's 25% stake. But the state-owned Société des Hydrocarbures du Tchad (SHT) has been trying since early 2021 to use its right of pre-emption to take over the Malaysian major's stake. Until now, however, it did not have the necessary liquidity.

Funds for SHT
According to our sources, Nguilin and Le Bemadjiel obtained financial support for SHT from one of the new oil players in Chad: Perenco. The Franco-British group made its entry into the country by taking over Caracal Energy's licences from Glencore (Mangara and Badila fields) at the end of 2021. It was also a candidate for the purchase of ExxonMobil's shares, but the latter went with Savannah, to Perenco's great displeasure. The Chadian state is refusing to endorse the transfer, which became effective on 2 December (AI, 16/12/22).

If a deal is finalised between SHT and Petronas - discussions were held in Paris last week with the president's oil advisor, Houno Sougar Koua - the loan will enable SHT to secure 60% ownership of the Doba blocks (it previously bought Chevron's 25% stake in 2014).

Perenco declined to comment when contacted by Africa Intelligence.

Where have i heard the term 'special advisors' ****ing up governments before with their unaccountability? (Cue UK and some of its regions in the last few years)

24/9/22

CHAD

Shadowy presidential advisers implicated in Mahamat Zene Chérif's resignation

The noisy departure of foreign minister Mahamat Zene Chérif has publicly exposed the internecine rivalries between four of Mahamat Idriss Déby's advisers.

It was an open secret that since June of this year the Chadian foreign minister Mahamat Zene Chérif had been complaining of interference in the exercise of his duties and had been threatening to resign. This finally came to pass on 19 September, his resignation letter, which was made public, citing "parallel initiatives and actions". In addition to the minister for communications Abderamane Koulamallah, whose differences with Chérif were well known and on display during the national dialogue, a number of other advisers to the Chadian president Mahamat Idriss Déby, aka Kaka, likely influenced his decision to resign.

Diplomatic initiatives on the sly
One of these is the minister of state and adviser within the president's office, Abakar Manany. This powerful businessman, very well-connected in the United Arab Emirates and central Africa, had embarked on several diplomatic "initiatives" in recent weeks without consulting Chérif. In August, for example, he travelled to Kigali bearing a "message" from Kaka to Paul Kagame. Being entrusted with such a mission was not in itself surprising, as Manany has known the Rwandan president for nearly two decades. After his falling out with Idriss Déby in 2008, the businessman even acted discreetly as a go-between in the resumption of relations between Nicolas Sarkozy and his Rwandan counterpart. In a further instance of the hands-on diplomacy of the boss of the aviation company Amjet Executive, he was once
again in The Hague in early September for talks with the Ghanaian leader Nana Akufo Addo.
But Manany is not the only presidential adviser exerting his influence beyond the confines of N'Djamena. Adoum Younousmi, who is also a minister of state within the president's office, has undertaken several missions in the sub-region, and indeed was in Abidjan just last week. The final member of this quartet who caused Chérif problems is the president's former private secretary, Idriss Youssouf Boy. Despite his legal problems (he was briefly detained and then released in late July in relation to the misappropriation of oil revenues), this childhood friend of Kaka remains a powerful figure at the Palais Rose and was certainly not greatly appreciated by the ex-foreign minister.

The Boy name

Lots of questions to ponder and i see I Y 'Boys' name crop up again in 'todays' article - wasn't he sacked in June and still now described as the powerful unofficial advisor to the president. It was reported that he was briefly detained and then released in late July in relation to the missapropriation of oil revenues at SHT.

(How does it look with the Chad president shaking hands with Biden 2 days ago in Washington with $55b earmarked for African countries).

Why did Exxon choose Save over privately owned Perenco at the outset and perhaps save themselves a headache or did all these demands escalate in the grab for oil by certain officials ?

The $160m demand from Exxon looks exactly like enough that would cover the back in rights for SHT to buy the Petronas interest ? Figure seems astonishingly high.
How did that go from a reported $30m to that figure in a few months.

28/9/22 Re Glencores departure to Petronas 2 months ago in AI - 'The Swiss trader sold his local subsidiary Caracal Energy to Perenco by agreeing to pay a bonus - some sources speak of $30m - to the Chadian treasury.'

Reported that Petronas won't pay a departure bonus (not in the contracts for at least Exxon or Petronas).

What looks like excessive demands for bonuses would appear to suggest this could be away of financing the Petronas interest. So if Exxon wouldn't pay it, then SHT falls short. Therefore possible Perenco could have offered the same figure to Exxon and took over the asset and then perhaps financed SHTs Petronas interest ?.

The oil minister (reported as in favour of the Exxon/save deal seems to be caught in the middle between the finance ministry and securing a compromise deal.

From 24/6/22 Disagreement among Kaka's ministers
'According to our sources, Le Bemadjiel, who supports the transfer, was pressured to write this missive by two Chadian politicians: the president's now ex-private secretary Idriss Youssouf Boy - who was replaced on 23 June by Ismael Souleymane Lony - and finance minister Tahir Hamid Nguilin.

Boy, who until now had wielded remarkable influence over President Mahamat Idriss Déby, aka Kaka, reportedly asked Nguilin, an ally, to find any way possible to slow down the $626m transfer deal between ExxonMobil and Savannah.'

16-12-22

ExxonMobil's messy exit from Chad

After selling its shares to Savannah Energy, ExxonMobil has pulled out of Chad but no agreement has been reached with the state on its final tax settlement. The government may be seeking to strike an alternative deal with Savannah's rival, Perenco.

The last employees of ExxonMobil left Chad by plane on the evening of Friday 9 December, just a few hours before Savannah Energy issued a press release confirming that it has acquired the US major's 40% stake in the seven Doba fields in the south (producing some 28,000 bpd) and in the pipeline to Kribi in Cameroon. According to Savannah, it paid $407m for the privilege, but this does not mean that ExxonMobil is now completely done with Chad.

On 13 December, the finance and oil ministries issued their own joint statement asserting that the pre-emptive rights of the state-owned Société des hydrocarbures du Tchad (SHT) were infringed and that the state had not given its approval for the transaction. In private, the authorities are saying that SHT could have secured funds from Savannah's rival Perenco, which suggests that an alternative deal may be in the offing. When contacted, the French oil company declined to comment.

Failed mediation
As we previously reported (AI, 08/03/22 and 16/06/22), ExxonMobil had hoped to obtain a final tax certificate from the finance ministry before departing from the country, but the government is understood to be asking for a $160m bonus before it will issue this document. This amount was insisted upon during the rare meetings that the company's final director for Chad, Cécile Rauline, managed to secure with the powerful finance minister, Tahir Hamid Nguilin.

He is not backing down and has the full support on this matter of Idriss Youssouf Boy, the most trusted unofficial adviser of the president of the transition, Mahamat Idriss Déby, aka Kaka. The president's former private secretary has turned down ExxonMobil's offer of between $20m and $25m. The oil minister Djerassem Le Bemadjiel, who used to work for Schlumberger, has been trying to mediate for months but has been unable to steer the two parties towards a compromise.

A brilliant deal
From Savannah's point of view, the deal is worth its weight in gold. Admittedly, production at Doba has fallen considerably over the last decade: a few months after the fields came on stream in 2003, over 100,000 barrels were being produced a day. But the pipeline to Kribi is still conveying more than 124,000 bpd thanks to the output of China National Petroleum Corp (CNPC), which pays a fee for this service. The other shareholders in this infrastructure are Petronas (which is also selling up) and the Chadian and Cameroonian governments.

Soder see the 26/6/22 posts about some of the govt shenanigans. Energy minister pressured.

On the day of the Chad news release (13/12/22) contesting the Exxon/Savannah sale, i see the Chad president M.I. Deby was actually in Washington DC where he is photographed shaking hands with President Biden at the US Africa summit 13-15 Dec 2022.

There are other African heads of state there.

The US plans to dole out $55 billion to Africa over the next 3 years with the poorest nations to benefit.

In June AI reported as part of a longer article on the leaving bonuses the government wanted, it said that earlier in the year that when Petronas announced it's sale to Save, SHT wanted to exercise it's pre-emptive rights but was unable to match the sum offered by Savannah.

No doubt the sum may have been matched if all 3 oil interests paid a leaving bonus (definitely not in the Petronas or Exxon terms/contracts) and to cap it all the government uncover a fraud in SHT and missing funds with some close to the government arrested resulting in a reshuffle.

To add insult to injury Exxon now provide finance to Save for that part of the deal and i'm sure the government must be in a split mood among many. If they had a similar financing deal, the missing fraud money and the leaving bonuses, then surely they could match the Petronas sales price. Reported that there was something like 20 or 24 people from the government side sitting in on deciding the deal which was then reduced to 3 after mid year. So it's no wonder imo that there will be a clash of interests as to who wants to see whatever particular outcome and for whom ?

Then we had the terse letter/treatment towards the Exxon boss about 2 months ago where she threatened to appeal to the judiciary or similar. So perhaps no wonder Exxon worked on regardless to legally close the deal in time. If consent was indicated on the basis of a leaving bonus being paid when none existed within the contracts of either Exxon or Petronas, i would expect that legally this is water tight as they say in accordance with the contracts. I think this may have caught the government by surprise and whoever has been negotiating inside the government has had no other option but to issue the rebuttal as they did where questions are bound to be asked of their negotiating skills. Imo !

Chads external debt of about $3b was renegotiated last month i beleive which is a huge amount for the country.

Glencore oil loan of $1b is still to be paid some 7-8 years later so what company is going to lend them further on oil if they don't pay up. Not Exxon by the looks of it and potentially leaving an asset in unsafe mismanaged hands ?.

It's all well and good the government wanting an even bigger stake when prices are stronger but on an average price range a Breton Woods article on the 8/12/22 reported criticism of too much dependency on their oil revenues re debt repayment.

The Government oil company SHT has seen a major fraud under investigation of it's own people.

Were the demands for $millions in leaving bonuses from all 3 a way of finding the cash for SHT to pay for their pre-emption rights? - only to find the cupboard bare mid year.

I wonder if part of the government ire is that Exxon loaned the cash to Save and not SHT in a similar deal when they speak of some different terms ?

The government SHT are not an operator and don't have experience (as far as i know) in running/developing oil fields and are basically a sleeping partner and don't have the cash. On top of this is the mid year fraud fiasco and the fact that Chad has significant debt - ie leaves possibility for mismanagement, ESG flouting and perhaps not managing the share of finances. Exxon can't be accused of pulling out of the country and not leaving the assets in safe hands.

The demand for a leaving bonus when one was not in the contract is another issue with reports of wanting $30m when $15m was offered (if true).

Exxon also have problems right now in selling up in Nigeria to Seplat and it seems very likely from reports in AI that the deal is dead in the water with NNPC stepping in. They may have been determined to wrap up the sale and no more negotiating if under legal counsel all parties believe them to be water tight. I note when Exxon were asked to comment yesterday they directed that questions go to the new owners.

Either way i expect at the least some delay to any works planned for Doba under Save. What will happen to the Petronas interest - will they sell or stay for now and let things settle with Save as operator for a year or two (post any legal outcome) ?

If SHT bought (again cash issue?) the Petronas stake it leaves them as the majority but i assume Save would be well aware of that potential outcome if CEMAC did not approve the Petronas purchase anyway.

Petronas through their Chad interest are basically there in name only with little ground operations for staff and might let this settle with Save as operator.

Thanks Agadem.

AI seemed to imply the net Petronas interest in SS was around 70,000 boepd.

No doubt this is all a juicy story on many fronts so I expect AI will be onto their sources for a news article.

Surprised there was no interviews by AK on Exxon closure and South Sudan. Any other time he’d have been on Vox or elsewhere and some comprehensive multi broker coverage usually given. No mention of the South Sudan net production numbers but maybe those will come.

One thing is for certain Save need to get a firm grip on providing information and reassuring both II and PI investors in the coming days because we can’t sit behind a suspension indefinitely for a stable share price.

If nothing else, get $150m together, get the rigs into Niger, book reserves, give a definitive date for production and move something forward that has no governmental issues.
Any troublesome or failed acquisitions will only result in uncertainty over others in the pipeline and there will only be so many suspensions investors will tolerate (this is the 4th). Ball firmly in AKs court to get on top of the information flow to all.

If i recall, if consent isn't given in 60 days it is deemed to be given in accordance with the agreements (1st Adm doc) and not just for Chad.

Just wondering if AK was already aware of this when no interviews were given. I'd be surprised if this wasn't communicated to Exxon/Save before that went up on the website unless it's a different faction in the government.

What does this mean for Petronas selling up who reportedly refused any demands for a leaving bonus.

As others have said it's probably fortunate we're suspended. A cynic could say maybe the S.Sudan deal for Petronas helped this but then it was already awaiting signed.

Had Exxon enough of the demands ?

Some interesting comments with both pro and negative from chadians re the government notice.

"Lastly, I would like to the opportunity to express my gratitude to all those who contributed to the successful completion of this transaction and, in particular, our HOST COUNTRY STAKEHOLDERS, my incredibly dedicated and passionate colleagues and the ExxonMobil deal and in-country teams."

The last reports from AI said a deal was close.

Prior to that there was some government officials replaced/shuffled. Some supported the deal, others didn't and then the SHT fraud fiasco with the arrests that followed. Is there still a split government faction after all that ?

Was this to override the cash demands from Exxon by the government ? and get on with it that they deemed within their rights and original contracts ?

Needs addressing and a statement to give clarity because technically all cash flow should be flowing directly to us as of now no matter the share suspension.

At least the cash from goes to the oil trading group who handle the sales and distributes the cash so there shouldn't be anyway the government can stop that unless they shut down all production and that wouldn't help anyone least of all the government (as i understand it).