Member Info for ZENGAS

Going back to the presentation the other night and AKs reply when asked about any future dilution he said no on Nigeria and Niger but i read it as not being ruled out on any significant new acquisition. Worth a listen. Again it's not insignificant that Vitol has emerged as a shareholder in Save in the last number of months..
It's 8 months now since SAVE said they were after additional significant assets. I've looked back at the number of times Africa Intelligence has reported on them and later proved correct and that is why i think the hunt has already long been commenced for those assets. Panoro last month picked up an immediate net 6,000 bopd/25 mmbo P2 + 29 mmbo 2C and furher production/reserve upside for $140m funded by $90m debt from oil trading group Trafigura and $70m via a private placement (with $20m of that for additional capital). That's roughly 2/3rds in debt and 1/3 via a placing not counting the additional $20m raised.

AEI 2/6/2015 - "Africa Energy Intelligence understands the British explorer Savannah Petroleum, which was already awarded two relinquished blocks, R1 and R2, on the huge Agadem block, is currently in talks with Niger’s government on acquiring the R3/R4 permits."

SAVE 31/7/2015 - "Savannah Petroleum is pleased to announce the signing of a Production Sharing Contract ("PSC") by Savannah Petroleum Niger and the Government of Niger represented by the Ministry of Energy and Petroleum for the R3/R4 license area."

AEI 11/7/2017 - "Who is Savannah Petroleum targeting in the Niger delta? According to our sources, Andrew Knott, CEO of Savannah Petroleum is on the lookout for financing in China to buy Seven Energy. The company did not wish to comment when contacted by Africa Energy intelligence."
SAVE 13/7/2017 - "Statement Regarding Media Speculation. Savannah confirms that the Target is Seven Energy International Limited, a Nigerian focused oil and gas company."

SAVE 12/7/2020 AK - 'From a Savannah perspective, our business development efforts are now firmly focused around cashflow generative, or near-term cashflow generative assets which significantly enhance our ability to commence the payment of a progressive dividend to our shareholders.'

AEI 15/7/2020 Ocidentals 30,000 bopd share of fields in Ghana - "After Total's withdrawal, Glencore and Vitol come running for what's left of Anadarko. After buying Anadarko in 2019, Occidental Petroleum (Oxy) now finds itself with blocks in Africa, specifically in Algeria and Ghana, that it doesn't want. Savannah Energy, which operates blocks R1, R2, R3 and R4 in Niger as well as active gas assets bought from Seven Energy, is reportedly also in the running."

Agadem

I haven't got the figures from an older presentation re increased cash from better interest rate/longer term debt refinancing but from a FinnCap note on 19/11/20 - "Since the transaction completed in December 2019, Savannah has already paid down US$44m of the remaining debt leaving it with US$514m outstanding at mid-2020, The average interest rate this year is ~11.5%, which is expected to cost ~US$65m to service."

So $550m at a service cost of 11.5% = approx $65m ?

Then 3 months later a FC Flash note on 24/2/20 estimates closing net debt of $384.8m end 2021 and $296.7m end next year. Say round it to $390m net debt end this year and $300m end next year.

There might be a few things to consider on the effects of that refinacing.
If for instance they refinance the entire $550m at 3% cheaper - surely gives them a saving of over $15m/yr while having over $160m cash end this year and $250m cash end of next year based on the original costings.

Also what effect would having 50% more gas revenue generation to full exising 200 mmcf/d capacity of around $100m/yr at a similar price mix to existing contracts and with about 75% of that to the bottom line ( AK last year said they were working on an industrial cluster with a prize of over $70m in additional free cash flow). How much of an increase in gas customers can he fill out between now and end next year. He's said there is more customers expected in the short term.

In that context, how does that then look in terms of any West Africa asset acquisition in terms of size/materiality which if it is any good should be capable of being more than worth any effects of any short term dilution associated with it ?

I still think on the above basis he could pay both a significant dividend and perhaps do a share buy back but i think its on hold til the West Africa focussed acquistion is made as it just wouldn't wash beforehand. Maybe the small pencilled in dividend of $3m that one broker gave but i think if you weigh up the above, it could open up significant growth, dividends or share buy backs.

I want to see those hurdle prices of 47p and 68peventually broken and although it looks slow progress at times i think they are carefully building a really strong and sizeable company that's going to give a lot of value in the process. Personally glad to hear last night that they are awaiting an expected strong credit rating which will be instrumental in moving the company along to achieving its refinancing objective.

My take from last night

On the current CPF gas upside , the approximate output is roughly 131.8 mmcf/d for roughly $200m/yr revenue.
Assuming similar price range it would leave more than 50% - 80% production upside to 200-240 mmcf/d CPF capacity. Would have thought on a similar average price mix it could generate a further $100m/yr revenue.

He said if need be they could move some of that cash to Niger so perhaps we may see something after the short term news of additional gas customers, the expected 'strong' credit rating in the first half of this year (next 12-13 weeks) - and subsequent debt refinancing.

When asked about any future dilution he said no on Nigeria and Niger but i read it as not being ruled out on any significant new acquisition. I get a feeling that there's something going on in the back ground given the share price/bots etc and the fact that they already mentioned previously how many projects they expect to screen as well as being mentioned in Africa Intelligence that they were in the running on the Occidental Ghana assets (as well as Vitol in the same article though didn't imply together but Vitol mentioned as forming a consortium).

Just out of interest Panoro quite smaller than Save picked up significant Tullow assets in Guinea and have since said they expect to add more in West Africa so despite the oil price swings there appears to be assets to go after.

As for the dividend, I think it's the possibility of an acquisition that might be influencing this years decision on a dividend policy. Would you want to be giving out a dividend just as you could be raising some kind of capital or debt for an acquisition so maybe delay it for another 6-12 months until a new asset is in the bag ?

bigspike -

' As the country continues to grapple with Covid-19, President Muhammadu Buhari has been hoping to generate cash from a marginal field bid that looks at last about to close. The Department of Petroleum Resources has sent the first letters to inform the succesful bidders of its choice.

The Nigerian body in charge of issuing oil permits, the Department of Petroleum Resources (DPR), began informing the winners of the 2020 marginal fields bid round that they had secured a field by post last week (Africa Intelligence, 24/12/20). The letters, signed by DPR director Sarki Auwalu and which Africa Intelligence was able to read, informed the successful bidders that they had 45 days in which to pay the full signature bonus indicated in their bid to the Central Bank of Nigeria (CBN).

When the round began nearly a year ago, minister of state for petroleum resources Timipre Sylva had hoped to generate $520m from the 52 fields put up for sale. These oilfields had previously been owned by majors Total, Chevron, ExxonMobil, and ENI, all of whom were forced to return the fields ten years after their commercial discovery for lack of sufficient development (Africa Intelligence, 14/05/20). These majors will still be part of future discussions with the bid round winners as they are operators of the blocks where those fields are located.

Doubt over local firms' solvency

There is a potential spanner in the works however. A significant number of the winning bidders, badly affected by the Covid-19 pandemic and now strapped for cash, may not be in a position to pay the bonuses to which they committed during the various stages of the bid round. This may result in a second stage to reassign the contributions of firms unable to raise the funds to match their participations in the marginal fields.

Due to the large number of tenders - over 600 companies submitted bids in June 2020 - the DPR had to pair some of them together for a single field in order to please as many as possible. This did not go down well with all of the contenders. '

Noticed that also this past few weeks for me. Posts appearing then not showing for a day or two but maybe visible to others. Not a bad site but im not a fan of the bb format. Would have preferred it to be scrollable through numbered posts. One of the main reasons why i don't pay for any services here unlike Adfn v which has a better discussion layout imo that i prefer.

It works both ways.
$400m debt @ ex/rate of £1/$1.25 = £320m. At £1/$1.40 = £285m.
Any financing in £ should make the $ go further in buying assets or Niger EPS reduction.
The FinnCap valuation for oil was $3.20 per bl based on $50/b.

If im correct, i think Calabar was only taking enough gas for 2-3 turbines and Accugas was supplying 10% of Nigerias power. This was approx the 10% i beleive AK was referring to. He recently mentioned he expected to be doing 15% by year end. Either way this looks like very good news in the making as potentially it could drive ACCUGAS production much higher at Calabar and maybe closer to the DCQ level. Only 3 months ago where FinnCap were saying how huge the upside would be beyond the TOP levels on those existing contracts.

Calabar: NDPHC targets Togo, Paradise City with 170MW spare capacity

February 22, 2021 5:38 pm

The Niger Delta Power Holding Company (NDPHC) has reached agreement to supply power directly to Republic of Togo and are also in discussion with Paradise City in Cross River state using spare capacity at the Calabar Power plant.

The plant, which is wholly owned by NDPHC under the NIPP prgramme, has five units with designed total capacity of 600 Mega Watts. Speaking shortly after the inspection visit, Engr. Abdullahi described that plant as one of the best amongst NDPHC plants with gas available and with a good dispatch network. He said the company already has a power purchase agreement to supply 70MW of power to West African nation, Togo, from the plant and are in discussion to supply 100MW to Paradise City in Calabar.

According to him, “Calabar is one our best power stations under the NDPHC and it is one of the power stations that we have good gas supply. Where we have a gas supply agreement with ACCU Gas and also we have very good dispatch from Calabar axis because we have some eligible customers as well.

He explained that when all the units are firing, Calabar plant has 560MW but has a designed capacity of 600MW.
With eligible customers around we are able to commence some serious drive and engagements. “Calabar is one of them where we have bilateral agreement with Togo where we supply about 70MW and also there are on-going discussions with other potential customers in Calabar like the Paradise City in Calabar where they are willing to take 100MW.

https://www.vanguardngr.com/2021/02/calabar-ndphc-targets-togo-paradise-city-with-170mw-spare-capacity/

I don't think Vitol got a deal of any significance since it formed a consortium with SAVEs next door neighbour Delonex and Africa Oil Corp on a 50/25/25% ratio split for a Nigerian offshore production asset.

It was announced in late 2018, but Vitol pulled out late 2019 and Africa Oil Corp completed on it's own. It was for 50% in Petrobas' massive Nigerian field interest which would have been a net 40,000+ bopd out of 0.5m bopd daily production with opex under $10/b.

There was an article in AEI late 2020 about Delonex poor performance and the two founders jumping ship to Neptune Energy & Tullow. Apparently Scotiabank are/were marketing Delonex' s block H for sale with a theorectical capacity of 85,000 bopd. This block is on the Chad side and lies adjacent to either R3 or R4 owned by Save. Delonex made a number of significant discoveries there in 2019.

The only other news on Vitol was what was reported in AEI mid year about forming a consortium for Occidentals Ghana assets (30k bopd approx + upside). In that same article Save was mentioned as in the running also. So might Save have been part of a consortium given they were mentioned in the same article ?

If Vitol were happy to do something of significance with Delonex, then surely Save would fit the bill even more so as a partner and even more significant now that Vitol is an investor in Save. Save produce significant gas and cash flow whereas Delonex never produced anything.

Given the current oil price in the $60s, the CPR for Niger was based on a longer term oil price of $50/b+ so surely sooner or later something has to give on the planned start-up in Niger irespective of any new asset acquisition.

I think one of the reasons Vitol may have pulled out of the Petrobas deal was to do with not being able to market the oil itself as part of its oil trading business. Just 11 months after pulling out of that $1.5b deal, it transpires that Vitol has become an investor in Save. Imo Vitol are not here solely for Saves growth opportunity on the Nigerian gas assets. It's either as part of the massive Niger upside potential or/and any new acquisition deals in the pipeline.

31 Oct 2018
https://www.vitol.com/consortium-of-africa-oil-delonex-and-vitol-announces-acquisition-of-producing-assets-in-deepwater-nigeria/

Nov 1st 2019
https://www.reuters.com/article/us-petrobras-divestiture-vitol/oil-trader-vitol-pulls-out-of-1-5-billion-deal-to-buy-nigerian-oil-fields-idINKBN1XB4QM

' Article in BusinessDayNG on reforms to the power sector bearing fruit

Latest market data shows the power distribution companies collected N65 Billion from the tarrif they charged last month, the most since inception.'

(Approx $170m)

I hope this is a taster of things to come for SAVE as they pursue significant production assets in West Africa.

Panoro Energy are currently a 2,500 bopd producer with just 13.4 mmbo 2P and 25 mmbls 2C and $16m revenue to end Sept 2020. Announced completion yesterday acquring Tullows Equitorial Guniea assets and effective from 1st July 2020. At $55/b oil, it represents an immediate $120m/yr revenue jump.

Purchase Price $140m.
Acquisition price $5.60 per P2 barrel or $2.60 per 2P/2C barell.
Producton 6,000 bopd. (rising to 6,900 bopd 2021).
2P reserves 25.1 mmbo with 29 mmbls 2C + material exploration upside.
Estimated payback in under 3 years based on 2P alone.
Financed by an equity raise of $70m and a fully committed debt facilty of up to $90m provided by oil trading group - Tarfigura.
https://mb.cision.com/Public/399/3283415/a7ed7064cacbc0fd.pdf
https://www.panoroenergy.com/wp-content/themes/Avada/cision/releasesingledetail.html?releaseIdentifier=AD560F5AE3E01C21
--------------------------------------------
By comparrison, Save targetting production assets in West Africa and mentioned as part of their strategy on numerous occassions. Vitol Oil Trading group has appeared as a blue chip investor in Save. Compared to Panoro, Save imo could possibly target a deal 3-5 times this size with a similar expected payback time frame of under 3 years.

As for Nigerias debt ring fenced asset - it is estimated to have a reduction of circa $200m debt or cash build by end of next year. Either they actually reduce the debt or leave it as is but refinanced at a better and long term rate - and thus have access to some $200m of that cash for other purposes ?

One question - could Vitol be planning to fund Niger but also be involved in a strategy to help Save acquire a meaningful West African asset and give it critical mass in terms of cashflow as part of its overall longer term plans in Niger. The difference here is that Vitol is a blue chip investor in Save. In terms of the size of the Panoro/Tullow deal, Save being mentioned as in the running for Oxy/Ghana some months back while Vitol was mentioned as being involved in a possible consortium - it goes to show how sizeable the next deal could be for Save.

I think some of you are reading too much into it.
He doesn't actually say he doubted the company, he's actually saying he doubted whether to hang in there over recent years.

We had 2 lengthy first suspensions, the first one being Jan - July 2016.
Save was working on the 7E transaction from Jan 2017 then a second suspenson from early June - 22nd Dec 2017. We got ministerial consent in Aug 2019 and it was 15th Nov 2019 before the Accugas acquisition was completed and we took control. That deal dragged on from first announcement for 2 and a half years and it was April of last year before we got the supplemental adm document - ie 3 years while the expectation for much greater work in Niger was curtailed as a result.

I never doubted the quality of the assets but there was a period in maybe 2019 or 2020 when there was plenty of criticism voiced on the board including by myself and i think even Agadem for them to get a move on and provide more concrete news that everyone was anxious for, even though most of it was beyond their control. Bombarded with plenty of personal criticism by a few on various boards, private messages of concern, not to mention the sell off after deal conclusion i'm sure there wasn't too many faced with all that who privately questioned their reason for holding so long and infact should be perfectly natural in going over any investment made. Personally i'm glad to still be here as the asset potential is second to none and also to see Malcy still having the rationale to have Save in the bucket list. Directors added, Vitol in and 9 shareholders having 60% of the company.

1 - 11 is taken from FinnCaps 23/12/20 note and using long term oil price of $50/b.

KEEP AN EYE ON 3) as i see this as a way of loosely measuring the upside now as contracts accumulate as most of or costs are fixed and the CEO says most will go straight to the bottom line.

1) Net Cash (Debt) = (34.1p).
2) G&A = (2.8p).
3) Accugas TOP 3 contracts = 52.3p (131.8 mmcf/d average 2021 = $4-$4.15 mcf can find this in Adm doc/recent Lafarge RNS).
4) Stubb Creek 2P reserves = 3.9p.
5) Uquo 2P reserves = 18.9p.
6) Stubb Creek 2C = 1.1p (further 0.6p unrisked).
7) Uquo 2C = 0.9p (further 0.7p unrisked.)
8) Niger R3 East 6.4p (further 2.1p unrisked).
9) Stubb Creek prospective = 0p.
10) Uquo Prospective = 3.2p (further 6.1p unrisked).
11) Next Niger drilling campaign priced @ $3.20/bl and just 2.1p which is about 9 mmbls. (18.5p unrisked assuming all 76 mmbls.)
12) The above risked target gives 88.8p less debt & G&A of (36.9p) = 51.9p valuation.

On the existing 3 TOP contracts there is potential 25% upside if the TOP at 80% closes the gap to 100% DCQ level = 13p.
As for new contact growth and beyond the 51.9p - and PRICE UPSIDE is simply by looking at No 3 above GIVES AN IDEA OF THE VALUE AS FURTHER CONTRACTS COME IN. -
Simply put by looking at No 3 - If 131.8 mmcf/d on the 3 contracts at $4-$4.15/mcf is worth a combined 52.3p. On that basis every additional 50 mmcf/d and same price average would be worth 20p and perhaps much more given most of the fixed costs for the company are already covered by those 3 contracts .

So what's happening beyond the above -
Afam contract max 35 mmcf/d pending start up.
Term sheet signed for max 5 mmcf/d over 5 years industrial customer pending.
2.5 mmcf/d to Mulak (valued at 2p with a potential future upside to 100 mmcf/d).
Company confident of more customers expected to be announced throughout the year.
As for either debt reduction or cash build as a result, this may be worth an additional 34.1p at some point in various increments over time.

Further Accugas opportunity -

At the Uquo CPF it is possible to add bolt on modular processing to increase capacity beyond the anticipated 240 mmcf/d and certainly likely in the years ahead if Accugas simply wants to maintain it's 10% of Nigerias electricity supply (though have already said this will be 15% by year end).

600 mmcf/d pipeline capacity, that leaves them only to increase CPF capacity to match new contracts coming on. CEO has already said they will add more processing as they take bite sized chunks of growth.

Grid capacity and output planned and expected to reach 5-6 times current ouput next 5 years with continuing expansion planned to keep pace.

Huge deep water port construction in Saves back yard meaning more supply demand.

8000+ MW diesel displacement. 400 MW via Mulak worth potentially up to 80p. This seems to be approx 5% of the diesel displacement so not unreasonable to expect we could look for 10% of that market share too.

Longer term -3rd party gas transportation tarrif fees.

Niger opportunity - Unrisked recoverable of 6.8 billion - 9.98 billion mid-high case while risked recoverable from that is 2.69 billion - 3.86 billion bls.

(See 11 above) - Attributing 18.5p to 76 mmbls. Needs approx 400 mmbls to attain 100p of value. That's just 15% or 11% of the 2 risked recoverable figures and against a basin avrage of 80% success and Saves own initial 100% success rate !

I'm not in any doubt of what i see as very reasonable price targets of 100p for each of those assets given the opportunity and scale of them. and i think this is borne out to some degree by Vitol joining the blue chip investor base. Fridays director option hurdle set at 47p and 68p - both for a full 30 day VWA. Directors also taking their cash bonus in shares instead "seeking additional equity exposure." and finally, institutional average circa 36-39p. All should go some way in showing that this is monumentally undervalued.

Thought that was excellent to be unchanged at 47p and 68p so a huge incentive.

See the CEO, VP & CFO taking shares instead of their expected cash bonuses - "These awards are being made at the request of the individuals who were seeking additional equity exposure, in lieu of payment of certain cash bonuses"

Re the up to 2.5 mmcf/d CNG deal -

Panmure - 'We estimate that the GSA could be worth at least 2p/sh (risked) even on modest volumes'.
The new GSA marks Savannah’s first foray into the CNG market, and with Mulak’s customer base of 400MW of diesel generating capacity ***presents a significant opportunity for Savannah.***

FinnCap -
"If all this capacity were to switch, it would represent a 100 mmcfd growth opportunity for Savannah."

1) If 2.5 mmcf/d CNG is worth 2p risked - then with an opportunity for this to grow to 100 mmcf/d from a customer base of 400 MW that implies a target of 80p growth potential via the Mulak tie-up. There is a much greater 8000+ MW market so winning a few percent of that must be worth a look. There are absolutely compelling incentives to make the switch.

2) This was a November note - If Savannah can also continue to grow gas supply to the full DCQ level, our valuation rises to US$1.0bn (82p/sh). This valuation does not include any incremental gas sales beyond the three existing contracts." There is also an additional 34p that could be added as debt reduced or cash build (net debt) though debt reduction is not a priority other than to put it on cheaper terms and over a longer tenure thus adding more year on year cash.

3) Doesn't include Afam or any of the other contracts under negotiation and did not includes todays market opening opportunity.

I said a long time ago i saw the potential for at least 100p target value out of Accugas and i can say i feel more positive than ever about that as things progress.

My 100p for the Niger still stands and with a broker basing 18p on 78 mmbls it implies around 400 mmbls being needed and just $3.20 per bl used. Given the COS rate, multiple analogue nearby discoveries and SAVEs 100% drilling success rate, i see no reason for that not to be acheived from a 2.6 - 3.9 billion bls risked recoverable (mid-high case).

200p still my target and a possible 12 bagger from today. That's barely a 5 bagger for all the institutions that have stomped up around £250m at an average 36-39p.

This is more significant than it looks at first glance.

This is an entry into an entirely new market of CNG.
Initially 2.5 mmcf/d but Mulaks subsiduary Mantrac is the largest supplier of generators.

With 40% cost savings and 30% carbon reduction, they have a customer base via Mantrac of 400 MW which is huge compared to just the initial 2.5 mmcf/d. There should be year on year switching with savings like these as diesel is displaced.
By comparrison i think the Calabar p/station is using 100 mmcf/d+ for about 450 MW of the currently installed turbines.

What it does is get SAVE beyond its current pipeline reach which was unheard of before and opens up a huge new longer term growth channel so could grow massively in size longer term just on the conversion of a 400 MW customer base from diesel of which Finncap this morning see as a 100 mmcf/d growth opportunity (40X) to gas while the market is 8 GW+.

Great article and shows the sheer scale of the opportunity for us. I think this is why Save chose highlight it. From the Atlantic Global Energy Forum.

Nigeria’s energy infrastructure investment gathers steam -

https://thenationonlineng.net/nigerias-energy-infrastructure-investment-gathers-steam/

Hi Agadem - Re pipeline capacity.

The original plan back in 2016 was Save taking 18,000 bopd out through the Chad pipeline where CNPC would build the link to that - This was scrapped and now it's Niger-Benin. There was less capacity in that original plan.

Before Covid, Niger was aiming for 500k bopd production and Opec membership.

Also it was one of the brokers Mirabaud about Sept 2019 where they stated the pipeline would eventually have 200k capacity before compression.

I'm sure as the main pipeline starts up and produces revenue for the government, it will open up further options.

Also Nigerias president had agreed to the 100k bopd Mashi refinery in his home state of Katsina if he could get a guaranteed supply from Agadem though CNPC has gone with the main export pipeline for now.

( a post back in Sept 2019 " RE: Pipeline Capacity18 Sep 2019 16:04
A study back in 2016 envisaged Savp getting into the Chad-Cameroon pipeline with CNPC.
Savps share was a conceptualised 18,000 bopd but Exxon, Petronas, Chevron (who later sold out to the government) and others had a share of throughput in the 225,000 bopd pipeline.
Given that CNPCs pipeline will have no other major producers to share with yet and has a 200,000 bopd capacity before it can be increased with compression - surely could be an ample outlet for Savp and some others who might later join and much greater than the originally envisaged 18k bopd into the Chad-Cameroon pipeline.)

3/2/2021

CNPC silently prepares massive battle plan for Agadem crude exportation

The Covid-19 pandemic has not stopped the Chinese major from rolling up its sleeves and getting ready to start Nigerien crude oil exports as soon as possible.
The last stage to validate the project to export Nigerien crude oil from Agadem via Benin was settled at a cabinet meeting in Cotonou in late January. The document, which will be followed up by a order from Beninese President Patrice Talon, authorises China National Petroleum Corp (CNPC) to build its pipeline on Beninese territory. The Chinese major has operated the Niger's Agadem block since 2008. It hopes to export around 97,000 bpd via the future pipeline that should be ready for use in 2023, rather than 2022 as initially planned.

Colossal investments

CNPC very rarely communicates about its activities in Niger. It is the only oil company to produce locally and transforms about 20,000 bpd via Société de Raffinage de Zinder (Soraz) of which it owns 60%. According to sources in Niamey, the Chinese oil firm intends to spend no less than $1bn in 2021 and a further billion in 2022 to develop the deposits that will provide the oil for export via Benin.

Nor did the outbreak of the Covid-19 pandemic bring about a total stop to its investments in 2020. It injected $200m into a development drilling programme on top of which it has pledged to put $2.3bn into the construction of the export pipeline. The structure is to run 1,980 km in total, 1,293 km of which in Niger and 687 km in Benin.
With all the red tape now in order, both in Niger and Benin, and the Covid-19 vaccine campaign well underway in China, the ships carrying the pipes from China for the build are likely to follow in the coming months. For the moment, only one ship - in early 2020 - has been able to unload its cargo of around 100 km of pipes at the Benin's port of Semè (Africa Intelligence, 29/10/20).

CNPC politically confident
China is increasingly confident about the political continuity in Niger and Benin, guaranteeing its long-term investment.

Great post MT.

After the lafarge contract update the combined TOP is 131.8 mmcf/d
At end of 2020 Calabar was $3.90, Ibom $2.20 & Lafarge $7.50 mcf.
All in about $557k/day x 365 = $203m + $12m oil/liquids approx = $215m/yr
This ties up 131.8 mmcf/d.
There is 25% upside to this to 164.9 mmcf/d under DCQ so in future years could rise by up to $50m just by closing the TOP to DCQ gap on the 3 contracts.
With up to 240 mmcf/d under the CPF it leaves 75 mmcf/d free from the DCQ level.
35 mmcf/d for Afam - if they sell it all at the $3 level worth $38m but selling just at 25 mmcf/d level would be $27m/yr.
If 20 mmcf/d is sold at $7.50 to higher value customers it's worth $55m/yr.

In short Afam could add $27m/yr and if they add those higher margin customers for just 20 mmcf/d it would add $55m or $80m in total. If the DCQ gap closes in the next few years it could add up to a further $50m and still leave about 30 mmcf/d spare capacity.

Any of these scenarios combined to Agadems post highlighting the value of the interest rate lowering becomes an absolute serious game changer imo at little to no cost for Accugas.

With the CEO saying he expects Accugas to be suppling 15% instead of 10% of Nigerias power by year end, i envisage they will want to maintain their rate of market share going forward given the amount of grid power is forecast to reach 30 GW (and keep expanding) from the current 7-8 available not to mention the displacement of many GW of more expensive highly polluting diesel.

This is why it was highlighted and emphasised that the $4.3b of contract value was the absolute minimum. Given all of the above i believe over the next few years contract value could be 3-4 times of where the 'minimum' is now.

One thing to look at is with FCF at around $120m on the current average contracts, how much FCF will there be if 2-3-4 X future growth is met just in keeping market share smply as the grid etc accomodates it.

With a $1-$1.5b cost just to replicate the infrastructure how much will Accugas be worth on those very long life FCFs for the next 30+ years to any potential predator ? (never mind any other parts of Save).

So i agree fully with your African O&G Major Under Construction.