Member Info for ZENGAS

Thius is what i see as possible figures given the information on acquisitions & interviews.

5k bopd to the Niger refinery.
25-50k bopd via CNPC pipeline.
13k from Exxon acquisition - 20k bopd possible.
23 - 40k boepd Accugas (40k is entire current processing).

Above gives a range of 66,000 - 115,000 boepd.

Further bolt on or material acquistions from 'majors' divestment programme.

Exxon acquisition - Upstream saying could lead to a future pipeline link from Agadem into Chad/Cameroon pipeline.

Accugas pipeline capacity of 100,000 boepd (60k surplus) and already mentioned as likely able to earn tarriffs from 3rd party gas. Exxon(40% stake ) pipeline capacity of 225,000 bopd. Both having significant tariff upside.

To reiterate Malcys recent quote - " All in all the management is in the process of putting together a business that has the opportunity to be a huge, clean company in its space that few have seen the like of "

First time i heard this from Save -

the plan is to route between 25,000 and 50,000 bpd through the Niger-Benin pipeline.

UK-based Savannah Energy has five discoveries in the Agadem.
All have targeted mostly shallow Tertiary sequences and Hamani points to untapped potential in adjacent basins and the deeper Cretaceous.
AIM-listed Savannah holds two large production sharing agreements in the Agadem Rift basin where an additional 146 exploration targets have been identified, all within access range to CNPC's oilfield development and pipeline infrastructure.
Savannah operates blocks R1/R2 and R3/R4, covering half of the basin, with an early production scheme focused on producing 5000 bpd from R3 East block before the end of 2021 with capacity to ramp up to 10,000 bpd as step-out discoveries are tied in.

The oil initially will flow through the existing 463-kilometre pipeline to the Soraz refinery at Zinder.

However, the plan is to route between 25,000 and 50,000 bpd through the Niger-Benin pipeline, constrained only by possible bottlenecks in planned infrastructure.
“The pipeline represents a huge opportunity for other operators who can have access to this infrastructure, like Savannah Energy, and will encourage new oil investors,” says Hamani.

Savannah chief executive Andrew Knott tells Upstream that phase two will likely involve more exploration drilling.
“Most of the 140 or so prospective targets are analogous to structures found elsewhere on Agadem, where each discovery holds some 8 million barrels, so we have the makings of a huge multiple hub on the R3 block,” Knott says.

In neighbouring Nigeria’s southeastern oil patch, Savannah is similarly taking advantage of that country’s determination to develop distribution networks to route associated and non-associated volumes for industrial consumption and power generation.
Nigeria is serious about gas pipeline and power grid development, Knott says, noting that a $2 billion substation upgrade contract with Siemens is a major priority of clear strategic importance for the government, ensuring grid stability when gas-fuelled power is generated.

https://www.upstreamonline.com/field-development/crude-pipeline-the-driving-force-in-niger/2-1-886779

A Nigerian firm and a Burkinabé trader based in Switzerland have joined forces with Niger's state oil firm to scoop up the areas relinquished by CNPC at Agadem (R5, R6, R7). The potential move was enabled by one of the last major energy decisions of ex-president Issoufou's government.
The decision dates back to one of the last cabinet meetings chaired by Mahamadou Issoufou. On 12 February, then oil minister Pierre F Gado endorsed the plan to grant the areas recently handed over by China National Petroleum Corp (CNPC) at Agadem (R5, R6, R7) to an unlikely trio who formed the Niger Oil Company SA (NOC) joint venture. Apart from the state-owned Société Nigérienne du Pétrole (Sonidep), which has a 15% stake in the venture, the other two members are complete unknowns in the realms of exploration and production.
A firm called Azimuth - which has no link to the company of that name which is active in Namibia and South Africa - is listed in the minutes of the cabinet meeting as one of the shareholders of the joint venture. But it has since been replaced by a Nigerian firm, Fonterra Petroleum, according to our sources. Fonterra, which holds 65% of the joint venture, is headed by Niger Delta oil boss Diran Fawibe. Fawibe previously worked for the Nigerian National Petroleum Corporation (NNPC) as head of its marketing department. He is also the managing director of another oil services firm created in the 1990s, International Energy Services.
The third shareholder (20%) in the Niger Oil Company is the Swiss-based oil trader Amko, founded by the Burkinabé Moussa Koanda. Koanda is active in a range of sectors such as energy and runs the Faso Energy firm. He got into business under former head of state Blaise Compaoré (1987-2014) and made a fortune in trading oil, rice, and sugar in Ivory Coast.
President Mohamed Bazoum's new government, which came to power in April, will soon see if the new joint venture is able to come up with the $24m signature bonus for the three licences. It is due to be paid in June. If they fail to produce it, the blocks will in theory be immediately returned to the state.
Savannah Energy watches from the wings
Apart from CNPC, which operates most of Agadem, only Savannah Energy, headed by British financier Andrew Knott, has licences in the area via R1, R2, R3 and R4. Savannah, after drilling five wells and developing new fields, scaled back its involvement during the Covid-19 pandemic. It focused more on selling gas in Nigeria, which it entered in 2019 by taking control of the Uquo and Stubb Creek gas fields, supplying a power plant in Calabar in Cross River State and a LafargeHolcim cement plant in the same state.
Savannah is expected to soon announce its plans for its Niger operations, with the likely connection of its oil to CNPC's networks for export via Benin. It is also in line to take over ExxonMobil's 40% stake in the Doba permits in Chad and its interests in the Chad-Cameroon pipeline that is used to export Chad's crud

contd

Dikouma's major asset as far as the president is concerned is that he is from the Diffa region where the Agadem oil reserves are located. The political leaders of the province have regularly criticised the government for failing to appoint natives of Diffa to posts of responsibility in the hydrocarbons sector and its seems that their complaints have finally been heard.

Major talks are set to begin soon between China's state-owned CNPC and the new government in Niamey.
China National Petroleum Corp (CNPC) recently appointed a new boss for its Niger subsidiary. According to our sources, Zhou Zuo Kung, who was previously in charge of its branch in Sudan, will be overseeing the Chinese state-owned company's project to export oil from Agadem to Benin. His predecessor Cheng Cunzhi, who arrived in Niamey in 2017, had been eager to take his retirement for some time. CNPC has opted for an expert in handling major projects to ensure the smooth running of the works to construct the export pipeline, which is now due to go on line in March or April 2023, some fifteen months later than planned due to Covid-19.
Zhou Zuo Kung has already attended several meetings with officials from the oil and energy ministry, which since 4 April has been headed by Mahamane Sani Mahamadou (aka Abba), the son of the former president Mahamadou Issoufou. The $2.3bn oil pipeline will extend across 1,980 kilometres - 1,293 in Niger and 687 in Benin - and will be able to transport a little over 90,000 bpd in addition to the 15-20,000 bpd that will continue to be channelled to the Zinder refinery, which has been operational since 2011.

One of the priority issues to be addressed by CNPC and Abba in the coming months is the Nigerien state's stake in West African Gas Pipeline Co (WAPCo), the company that will be building and then managing the infrastructure to transport the crude. Under the former oil minister Pierre Foumakoye Gado (2011-2021), the state had intended to take out a 15% stake for some $350m (with CNPC holding the remaining 85%). However, the finance ministry is unlikely to have the necessary funds at its disposal and will probably have to borrow the money. Several trading companies are already understood to have approached senior government officials with an offer of financing in exchange for the right to commercialise future production. Glencore, for example, already has a track record in this kind of transaction: in 2014, the Swiss trader lent the Chadian state $1.45bn to acquire Chevron's 25% stake in the Doba blocks operated by ExxonMobil.
But CNPC is less of a fan of such financial arrangements and may be inclined to lend the sum to the Nigerien government itself at lower interest rates to preclude the involvement of a Western company.
Bazoum's trusted oil advisor
In addition to Abba and Fumakoye Gado (who has been appointed the president's high representative), the new Nigerien leader Mohamed Bazoum, who was elected couple of weeks ago, will be able to turn to his advisor on oil and mines, Mamadou Sougou Dikouma. Secretary-general at the mining ministry until his retirement in 2019, he is a member of the political bureau of the ruling Parti nigérien pour la démocratie et le socialisme (PNDS) and has known Bazoum for forty years, ever since their schooldays.

It's from the original ipo document martyh. Should be still on the website under 2014. Would think that some of those cost assumptions have since been improved upon.

The Chad-Cameroon pipeline is 1070 km, ie 180km Chad & 890km Cameroon.
Exxon appear to own 41% of the pipeline in both countries.
To connect to the Chad pipeline a 6-700km link needs to be built if oil was sent from Agadem, Niger.

In Saves RNS of 8/7/2015
"Agadem Rift Basin Export Pipeline Tariff
Savannah has recently received an update from representatives of the Ministry of Energy and Petroleum in relation to the progress which has been made on the installation of ARB export infrastructure and potential economics. Following this update, a reasonable central case cost of export via the proposed Agadem-Ronier-Doba-Kribi route (of which the Agadem-Ronier section is still required to be built) is now seen by the MEP and Savannah as being c.US$16/bbl (real 2015). This cost includes individual pipeline tariffs and national transit fees payable to the Republics of Chad and Cameroon to enable crude to be exported from Agadem to the Cameroon port of Kribi.
The c.US$16/bbl assumption compares to the average c.US$18/bbl assumption made at the time of CGG's initial economic evaluation contained within the July 2014 Competent Persons Report. "

Purely on a distance point of view in the relevant jurisdictions you would think that's about $6-$7/b for Niger and $9-$10/b for Chad/Cameroon made up of two things - ie transit fees and pipeline tariff.
In line with oil prices, those costs might be shaved further to reflect current economics ??
There's 2 things that apperar to be billed - pipeline tarriffs and national transit fees.
I think we've only been looking at only a small part of those charges ie $1.30 ish per bl in getting $60m+ revenue/yr on 130k bopd. I think that could be the transit fee to one government ??
If there is a pipeline tarriff of say $2-$2.50/b that's a different ball game of a gross $95-$120m/yr less pipeline opex and if $50m-$60m leftover - 41% of that would be $20-$25m/yr to Exxon (Save). This is a wide assumption as it could be more or less but is imo a factor that will affect the valuation/cost of the acquisition rather than just the cost of the oil assets.

Some explanation - "A transit tariff as understood in this study is a tariff paid for the use of a pipeline for transit. The tariffs are derived on the basis of cost of service and cover the required revenue of the pipeline operator which is normally subject to business tax. In addition or alternatively, some countries levy a government charge for transit essentially as a fee for the right of way through that country’s territory, as compensation for taxes not levied and for service rendered by the country (e.g. protection of pipeline, political / administrative resources, environmental risks)" https://www.energycharter.org/fileadmin/DocumentsMedia/Thematic/Oil_Pipeline_Tariffs_2012_en.pdf

"Deliver at least one" ?

What's the chances of 1 or 2 more material acquistions in the next 12 -18 months given they are appearing to look at another 20 this year ?

"To pursue an inorganic growth strategy focused on the acquisition of cash generative assets or assets that
supplement our existing asset base.

2020 achievements
27 new business opportunities vetted with six of these pportunities still under review at year end.

2021 KPIs
Actively review >20 potential growth opportunities. Deliver at least one materially accretive growth opportunity "

For the benefit of doubt in the 4th paragraph in my below post

80-90p target pro-rata for Save with a $billion less debt of 70p = 150p -160p.

At 30% dilution ie 60-70p and with a $billion less debt being worth 50p = 110p -120p

First and foremost on the Exxon acquisition if successfull, i see Save working to increase production from the 13k bopd level to around the 20k bopd to drive cashflow and profit.

With the expectation of more gas contracts and those pending start-up, the short-medium target level must be somewhere around the 30k level at Accugas.

In short i see 50k production on the horizon. At the same time as both the export pipeline completes and the pipeline to the refinery, it should open up another 10-15k bopd. In total 60-65k production target.

That reflects my 60k target in line with where Tullow and Kosmos are at now at £835m & £930m m/cap today and each with over $2b net debt. That's about 80-90p target for Save pro-rata on current shares in issue or 60-70p at 30% dilution and with a $1b of less debt would be worth about 70p (depending on any dilution level perhaps worth 50p) to Save by comparrison. This was my strategy on how the share price could grow and i see this reiterated by the analyst as saying this deal if successful 'will catapult Save into the UK E&P premier league.'

As for a pipeline link-up to Chad, i see that as a longer term move and more likely a 2nd option for Agadem but more suitable ie for sale of the assets/partner interest that Save may never personally wish to build. The CNPC pipeline will still offer up to 300k bopd when pumping stations are added in phases.

Lets face it, in the meantime Save have said they will pursue further acquisitions and imo in the short-medium term it will be far more cheaper to add more assets and more profitable versus the time about building any 700km pipeline quoted at $1.18b. Panoros 6.9k bopd was bought for $140m where they plan to increase production by 50% there. (Imagine tacking on something similar in the next year or so). Ghana still on the market for around the $800m mark with circa 30k bopd so a lot of reasonable assets on the market with fewer buyers for them. Imo there's more scope for Save to add more bolt on and sizeable acquisitions as cashflow builds in the next year rather than a medium term goal of a pipeline via chad. In these times of divestment for ESG reasons and majors moving to younger assets, it's possible that Save could be a 90k+ producer in the making if and when more assets are added before any consideration is ever given to a pipeline link.

CNPC pipeline still mentioned by Niger minister interview in the a/report as completing next year.

and from Save themselves -

"The initial export pipeline capacity will be 110 Kbopd. Alongside the 20 Kbopd capacity of the SORAZ refinery, this will provide an export route (national to Zinder and international to Benin) of around 130 Kbopd. With CNPC’s production expected to ramp up from c. 15 Kbopd to 110 Kbopd, over 30 Kbopd of spare capacity will be available for other operators.

It is also planned that eight pumping stations will then be installed along the 20” Niger-Benin pipeline on average every 250km, which will be linked to tie-in points every 40-50km. The addition of the pumping stations should ultimately increase pipeline capacity to 300 Kbopd in four phases. "

Osaka Matsui Management in March this year said Petronas 35% and Exxons 40% were reckoned to have a combined value in excess of $1b. The assets have been up for grabs for almost 2 years now. Here Exxon on its own rumoured as low as $300m up to $1b (considered steep) for both assets combined.

This from African Intelligence on 27/8/2019
"There are several companies fighting to acquire the 40% of the Doba Basin that ExxonMobil has held since 2000. "According to our sources, Trident Energy, headed by former Perenco CEO Jean-Michel Jacoulot, as well as Perenco itself, are both interested in the assets. There is talk of the assets going for around $300 million despite the block's current output share for ExxonMobil share sitting at just 12,000 to 13,000 bpd net. ExxonMobil has not invested to boost the fields' production for many years, considering them too small and too mature to be worth injecting any more cash. Yet, the potential price of $300 million is further confirmation that the Chadian state overpaid for its 25% share in 2014, at a time when production had been on the decline for years".
Then 8 months later another AEI article on 3/3/20 (all before C19) the other partner Petronas with 35% decides it's selling too.
"It will be hard-pressed to find a taker given the array of Chadian oil assets on sale at the moment. As we revealed (AEI 846), ExxonMobil has been keen to shed its 40% of the same fields since midway through last year. Everything but the 25% stake of the asset controlled by SHT is now up for sale. The fields' average output for 2019, according to our sources, sat at 34,000 bpd, a figure well below the 120,000 bpd it was producing 10 years ago. All that could change with Petronas' departure. It is possible that a single investor could buy the lot, wanting to control the remaining 75% and become operator of the fields. Glencore, which owns several fields south of Petronas and ExxonMobil's blocks, is also feeling the lack of interest. Producing 12,000 bpd at its fields Mangara and Mandila, Glencore already put Natixis and Morgan Stanley to the task of finding a buyer for these six months ago.
Who could be interested?
There is hardly a crowd of companies looking for mature African assets the likes of these Chadian fields, whose producing is in free-fall. The French family firm Perenco had at one point been keen to buy Chevron's 25% stake in the Doba block in 2014. It is now understood to be now examining the option to take the remaining 75% but could still be put off by the steep asking price – around $1 billion in total".
Now 15 months on from that (and some 2 years since they were put up for sale) and Perenco that showed an interest in the 3/3/20 article is gone.

04/06/2021. "Savannah and ExxonMobil inch towards deal on Doba oilfields. In the coming years, the junior may connect up a further pipeline to the one that CNPC is currently constructing to Benin".

If you've really got 2.6 billion bls already risked recoverable potential in Niger then this certainly looks like a good reason to chase this Exxonn acquisition with its the current production, tarriff income and perhaps decent reserve life remaining with production upside over the next 8-15 years or so.

If you access a 2nd pipeline with 100,000 bopd spare capacity this becomes a big earner for the Chad/Cameroon governments and it also unlocks a very significant 2nd outlet for oil from Niger.

Pumping 100,000 bopd for 30 years would only exhaust 1b bls.

The CNPC Niger pipeline will expand via compression facilities and should be capable of 225-250k bopd. Save might get 50k+ bopd away this route.

The Katsina refinery in Northern Nigeria is still on the cards but no definitive date and also needs about 100,000 bopd from Niger.

These are all going to be very attractive reasons for partnering or eventually buying out SAVE.

Look at Neptune on 125k boepd and 600m bls P2, almost $2b net debt and planning a £7b ($9.8b) ipo.
£2 for Save is £2b (or if diluted by 30% maybe £2.6b).

Recon Africa last month exceeded a £1b valaution on no oil so far but a 500 mmbo reserve is being touted by analysts with a potential valuation target of over £2 billion.

There's no telling how big Save could grow to, but it's got all the key ingredients to be worth many multiples of where we are now.

For new comers and those not up to speed on the past, let's not forget the Chad/Cameroon pipeline was originally SAVEs intention and a detailed CPR by CGG Roberston to send 85,000 bopd of SAVEs own oil in Agadem via this route from a 200 mmbo reserve. Now if things pan out it may end up owning 40% of the pipeline effectively and significantly reducing the real tarrif cost in the process with another 13,000 bopd on top before any uplift.
FWIW I've absolutely no doubt Save will book substantial oil reserves in Agadem. The odds are overwhelmingly the best anywhere and already demonstrated by 5 out of 5 = 100% success rate. It has an already risked recoverable expectation of 2.6 -4 billion bls mid-high case. The u/risked recoverable is 6-10 billion bls mid-high case. I've been looking for circa 400 mmbls net only.
35 mmbo 2C (33 mmbo net) booked. Amdigh alone may lift this depending on pressure communication and other adjacent segments to over 100 mmbls - not counting the deeper potential in 3 of these discoveries that will be drilled down to. Imo we could be half way there already to one of Saves development examples of 200 mmbo producing 85,000 bopd.
140 prospects to drill - they won't need them all to where i want to be for a 100p from this asset though in fact it could be worth a lot more.
"Savannah has prepared development scenarios for reserves of 50, 100, 200 and 400 million barrels which have been reviewed and found to be reasonable. All the scenarios are similar but with costs and production scaled according to the reserve base.
200 million barrel case. Development Parameters.
'A phased, but rapid development ensues with first production just over a year after the end of the exploration and appraisal programme. Initial well productivity is assumed at just over 1,000 barrels per day per well in the first year that the well is brought on production with decline of 20% per annum thereafter. A total of 100 wells are assumed to be drilled with a unit well cost of $5 million. Facilities and gathering pipelines cost of $600 million are assumed thus giving total development cost of $1100 million. A peak production of about 85,000 barrels per day is achieved in the third year of production.
The sale of the oil is assumed to be via a short tie-in to a neighbouring export pipeline which will connect to the Chad-Cameroon pipeline to the south. The assumed tariff for the disposal of the oil is $18 per barrel. The annual fixed operating cost is assumed at $16 million with additional variable operating cost of $8 per barrel meaning that the annual operating cost in the year of peak production is $264 million.'
From the above - 200 mmbls annual Opex = $264m/85,000 bopd or $8.50/b, Capex $5.50/b, Tarriff $18/b. If that goes through the Chad-Cameroon pipeline with a likely 40% discount so real tarriff about $11 ? = about $25/b cost.

Agadem, not necessarily re a placing in the teens. I cant see how that would go down and wouldn't be positively taken as too cheap. He's always said we are substantially undervalued so how would you explain being seen to give too much of the company away. He's said they'd only buy an asset if it was materially acretive for shareholders.
I always thought that there would be a potential placing to grow with any new asset and the talk of share buy backs would come in the future when in a position to do so.
Reading between the lines i picked it up that there would likely be no share placings for Accugas or Niger but i kind of understood it that on a new acquisition it couldn't be ruled out. They have increased the headroom to do that.
The pound is buying about $1.41 now compared to $1.15 at it's lows. I was expecting that about half of any acquistion would come from an oil group in forward financing. I definitely think the share price has been held back and i think some of us posted about this in the past as the resaon might be to do with future financing for an asset.
The company is in a better position now so wouldn't surprise me if any placing could be done much higher than the current share price
I know some don't like debt, but Panoro were suggesting that their acquisition would pay for itself within 2.5 years and around half of their acquistion came from a placing. The fact that there is a tarriff paying pipeline might change the make up of financing here.
Also we have to look at the upside if Save can lift production from say 13k to 20k (They've done this in Accugas so can demonstrate this to Chad) the economics greatly increase and likewise if Chad was to get a 2nd future pipeline coming from Agadem, they will make significant revenues in new tarriffs they wqould probably more than welcome Save.
Also while taking on more debt, it's worth noting that even on just the 3 basic Nigeria gas contracts net debt will have fallen another $115m by next yr end. He's also put in place some $20m further expected savings in Capex by putting the compression project first. In addition if the other contracts come through i think this should add another $40m+/yr so by end of next year the company could have reduced net debt by $175m. That's before the refinancing of the Accugas debt that will free up more cash. I've been thinking what would 300m shares look like at 30p in bringing in $125m and the impact of $175m net debt reduction on the Accugas asset to play with ?
Overall i see it as putting us on a par with Tullow/Kosmos but a lot less debt.

Soder - why not ? Why did they become an investor in Save in the first place if that's the case ? There's nothing to stop them owning stakes in good growing, undervalued companies.

As someone said a few months back, if it was known we had BP as a shareholder in Save, investor sentiment would have been colossal. Yet it's Vitol and hardly anyone notices the significance.

About Vitol
Vitol is an energy and commodities company; its primary business is the trading and distribution of energy products globally – it trades over 8 million barrels per day of crude oil and products and, at any time, has 250 ships transporting its cargoes.
Vitol’s clients include national oil companies, multinationals, leading industrial and chemical companies and the world’s largest airlines. Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally including: almost 100 million barrels of storage, 480 thousand barrels per day of refining capacity and circa 7,000 service stations across Africa, Australia, Brazil, Eurasia and in Northwest Europe. Revenues in 2019 were $225 billion.
https://www.vitol.com/

BP generated an operating revenue of 180.4 billion U.S. dollars in 2020, the lowest revenue figure in this 16-year time period. BP is a globally operating oil and gas company and counted among the oil supermajors or Big Oil companies - the largest public companies within the industry. It is headquartered in London, United Kingdom. Operating as a vertically integrated company, BP is active in all areas of the oil and gas supply chain, from exploration to refining, marketing, and power generation.
https://www.statista.com/statistics/264185/bp-group-revenue-since-2003/

I would think it has to be Vitol given they are a direct investor in Save and seemed to appear as a shareholder in the presentations from around last October.
Not fully sure, but i think that's why Vitol pulled out of the $1.4b deepwater Nigeria deal a few years ago as they couldn't get exclusivity to sell the oil. Vitol trade 7m bopd and there's obviously a need to remain at the top of the pile. Has about $180 billion/yr revenues.

Trafigura provided half the cash for Panoros recent West Africa acquisition and i definitely expect that a big chunk for any acquistion comes from a trading partner.

Question is could Vitol increase their shareholding by being given shares in exchange for some cash to make up the balance needed by having a bigger stake in Save wthout buying openly on the market ? (Vitol will also be eyeing up the future export of Niger oil).
or a possible institutional placing to make up any difference ?
or some staged settlement to Exxonn ?
or a further loan based on the infrastructure (pipeline share) ?

Often wondered why the share price seemed in a controlled range for a long while and suspect it was known that Save was looking at so many opportunities and the financing of any of them would obviously come to the fore. You can't go looking at 20 opportunities without flagging up the obvious as to how they are going to pay for it.

4/6/21
Savannah and ExxonMobil inch towards deal on Doba oilfields

Savannah now has just a few weeks in which to analyse the ExxonMobil data and make a firm offer on its Doba assets. The junior has been on a shopping spree for new assets of late, taking advantage of the withdrawal of the Western majors and the lack of interest in mature deposits.

The news was announced with great fanfare on social media on 2 June by Savannah Energy: ExxonMobil is in exclusive talks with the junior oil company over its 40% stake in the fields of the Doba basin (30,000 bpd) and the identical percentage that it holds in the oil pipeline between Chad and Cameroon. If the deal goes through, Savannah would become the partner of Petronas and Société des hydrocarbures du Tchad (SHT). According to our sources, the news was to have been made public in April but Savannah delayed the announcement by a few weeks in the wake of the death of the Chadian president Idriss Déby. Even the Chadian oil minister Oumar Torbo Djarma was only brought into the loop by the oil junior on Monday 31 May.

Managed by the Brit Andrew Knott, Savannah now has a few weeks in which to analyse all the data that ExxonMobil has made available before making a firm offer.

Part of the cash needed for the transaction will probably come from a trading company, which is likely to insist on the right to sell the oil produced in the Doba basin in exchange for making funds available.

Savannah operates in several zones of Niger's huge Agadem block (for which CNPC previously held the licence) and has drilled five wells there. In the coming years, the junior may connect up a further pipeline to the one that CNPC is currently constructing to Benin, which will allow Nigerien crude to be exported to the international market. In 2019, Savannah also acquired Seven Energy and is producing gas in Cross River State in Nigeria.

The majors have to divest in this shift. It's not a case of why would they sell if they thought it was going to $300 - it will only happen on account of them selling so a catch 22. Lets face it, they won't be completely out of all their oil and gas holdings for many years.
The oil majors will help create higher oil prices (maybe $300 who knows, but then again how long really would $300 oil last going on past performance). Won't be much to grumble about if we found ourselves in a sustained level of $70-$90/b.

Couple of reports that say Exonns 40% and Petronas 35% interest could be worth a combined $1b approx. That would put Exonns stake at roughly worth $530m. The valaution may be one thing, but will they sell for fair value or with a sweetener ?

Production was 34k bopd in 2019. Todays announcement states 33.7k for 2020.
If it is currently doing say 32.5k bopd gross now, then 40% would be 13,000 bopd.
At $55/b oil, It would be generating revenue of about $260m/yr. Given that there's likely room for production improvement as they are keen for assets that have upside potential, they might be capable ramping up production to a greater level. 20% increase alone could mean $300m+ revenue.

Don't know if the pipeline gives any additional tarrif.

CNPC heavily in Chad/Cameroon and this could strategically open up a future connection route that was originally considered for getting Niger oil out for Save in their own right. Maybe not so important looking now, but could be strategically important in any future takeover of Save to have another export option and a connection pipeline for a buyer.

Overall this acquisition along with Accugas could immediately take revenue to $500m region and with increases from both over a future 12-18 months could take move closer to $700m.

Panoro recently bought 6900 bopd West Africa for $140m = about $20,200/flowing bl.
25 mmbo P2 at $5.60/b and overall 48 mmbo 2P/2C working out at $2.90.

13,000 bopd here at up to $30k flowing bl might be circa $400m ??? (If we only knew the reserves size ? and how the pipeline etc is valued). I'm sure this fits their strategy. As i said umpteen times this is lifting them towards Tullow/Kosmos valuation territory with perhaps a lot less debt (lets wait and see what the debt cost is ?).

22k boepd now via Accugas and 30k within sight with Afam etc.
13k now at Doba ? and perhaps upside to increase to 15-20k range.
Niger in waiting - Domestic and export 15k ?
About 60k production in the making.

Wonder when the effective date of the transaction began as it might already be paying its way for Save between then and completion date.