Share Name Share Symbol Market Type Share ISIN Share Description
Savannah Petrol LSE:SAVP London Ordinary Share GB00BP41S218 ORD GBP0.001
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 34.625p 0.00p 0.00p - - - 0 06:43:34
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 0.0 -6.7 -3.2 - 73.64

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Date Time Title Posts
24/8/201700:53◄ SAVANNAH PETROLEUM PLC ►1,108

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Savannah Petrol Daily Update: Savannah Petrol is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker SAVP. The last closing price for Savannah Petrol was 34.63p.
Savannah Petrol has a 4 week average price of 34.63p and a 12 week average price of 32.25p.
The 1 year high share price is 44p while the 1 year low share price is currently 25p.
There are currently 212,675,447 shares in issue and the average daily traded volume is 0 shares. The market capitalisation of Savannah Petrol is £73,638,873.52.
zengas: lh I don't know why your posting about the Seplat news now as if H1 is something new to be learned? The results were out 3 weeks ago along with an investor conference call. Surely you studied them then given their relevance to 7E. They are not the only oil and gas company irrespective of Nigeria that has registered a loss in H1 17. It's the steps that are being taken to resolve the issues with additional export routes and Forcados has reopened. They are also gearing up for major gas expansion. Their share price did not differ after the results to the valuation pre results and still has a m/cap of £600m. It remains to be seen if Savp can get a heavily discounted distressed asset on the cheap which can be put back on its feet given the assets and infrastructure it has. As for hating Nigeria re risk, i'm surprised you would invest in Niger.
diversification: Hi Jessica, Whilst I understand my comments can and will be taken with a pinch of salt, I am a small fish in a big pond, I thought I would email you so that you could consider this deal from the perspective of a private investor who invested for the vast upside exposure to the Niger drilling campaign. With a view to completing value accretive deals, Andrew Knott has explained that Savannah will be testing up to $1 billion of potential resource upside from the first three exploration wells in Niger. As such with a current market cap of less than £100m we have exposure to up to a 500% plus return on our current investment. This has also been made compelling by a potential JV which valued our current un-drilled prospects at double the current market capitalisation. Taking this into consideration and given the fact this RTO could see our market cap approach or exceed £1billion using Seplat as a benchmark, I feel this particular deal would not be value accretive at a re-listed price of anything less than 111p. This is especially the case when you consider future exposure to the Niger assets. If the share price does not return to the market at the suggested premium a potential capital return on our investment for Niger would have limited upside. I.e. a significant market cap of est. £1billion would only result in a 50% return to £500m upside in Niger compared to 500%. I really hope you get this right for all concerned and felt it important to share my views as a failure to complete the deal on value accretive terms to existing shareholders could translate to significant disappointment. Thank you for taking your time to read this. Kind regards,
zengas: In this context re the distressed SevenEnergy and it possibly being SAVPs target. UK listed Seplat are TOTALLY based in Nigeria yet have a m/cap of £620m (110p) and $635m of debt. Their working interest production is 20,917 boepd for 1st Qtr of 2017. "Strong performance of the gas business" Seplat have 45% of 3 of the producing blocks that SevenEnergy hold via 7Es strategic alliance with NPDC where the bulk of their production comes from. "Seplat is a leading independent oil and natural gas producer in the prolific Niger Delta area of Nigeria". Looking at Seven Energys' operations they appear to have similar production to Seplat and similar reserves. From Savp 4 weeks ago "The Company's position in relation to potential transactions remains unchanged, in that Savannah will only conduct a potential transaction(s) that are viewed as value accretive from a risk adjusted return on invested capital perspective." Looking at Seplats m/cap and debt there is a possibility that if Seven Energy were the target it could be at a premium to the current share price if a new structure is worked out.
zengas: Just my thoughts re farm out potential - If we farm out 50% in essence we could be giving away potentially $4b of risked value for some $250m? of farm-in funding. We are funded for the first 3 wells. The 6 additional options at full depth may cost $8m max = $48m ? (or $4.5m each that take in just the upper Sokor and Eocene- the eocene for CNPC having almost an 80% strike rate). We have $12m of an undrawn loan facility - theorectically that could take us to 5+ wells. I doubt if we could draw on that for exploration unless there was a success in some of the initial 3 wells. So for 6 additional wells to either the eocene or full target depth is going to cost a further $25m - $48m and we want to kick off the next round of 3D maybe $15m-$20m. Perhaps they could delay the actual 3D. Overall we could need $40m- $68m and if there was success, we still have the $12m loan facility that could be called upon ? If you didn't get 25% success rate from those 9 wells then the whole programme would have to be relooked at anyway whether you had a partner onboard or not. I think there would be a clause for them after x amount of wells drilled re results. All 3 placings so far have seen substantial money raised quickly and easily even when the share price was 23p - getting £30.33m away at 38p. Therefore imo it might be a hard call unless someone is prepared to pay a premium to sanction a farm-in . At the moment we are only needing $40-$68m imo to get us up to 9-10 wells and another significant batch of seismic. If you get 25-30% success rate it would be little trouble to raise more drilling funds if the share price was propelled higher on that success. Bottom line if you look at the money we need to get to 9-10 wells and compare it with each of the 3 previous fundings, unless there is a significant farm-in payment, it could be just as easy to perhaps raise the money ourselves and retain all of the upside. If successful - to get to first oil on a 100% basis it's now down to $200m. If we farmed out 50% it is only going to cost a partner perhaps $100m and after all, that is totally recoverable. That's why i beleive we are in the best situation. We aren't in dire need of funding. We know or have been told by the CEO that they could call on additional funding so i can't see any reason in taking on a farm in partner unless it's really to our advantage against letting someone else in too cheaply. The company has always said they want to remain operator. My thoughts from May 9th - ' With 2.185 billion bls risked recoverable. Average 17.5% Govt share (15-20% re 4 blocks) leaves 1.8 billion bls risked. 5% minority partner stake leaves 1.71 billion bls risked recoverable. With an estimated company and analyst valuation of $4.60/b in the ground the risked recoverable 1.71 billion bls is almost $7.9 billion or just over £6 billion of in ground value. If we are left post any farmout with a minimum of 50%, the risked recoverable is some £3 billion of target value. '
diversification: My take on the RNS, whilst it didn't contain a lot of new information (due on the 7th), gave us an insight into progress to date: RNS comments -- My comments ++ -- An additional export route for Agadem crude to the Kaduna refinery in northern Nigeria is being advanced; ++ As also picked up on by Malcy, this news could drop into the share price at any time thereby increasing the net asset value of any discovery by $1.4 a barrel at $60 crude. A material increase to the share price whenever this news comes to fruition. -- "We believe the business is now well positioned to deliver a material step change in value for our stakeholders, and look forward to providing a significant update on our drilling plans and forward strategy at our upcoming Capital Markets Event in London on 7 June 2017." -- An initial three well campaign (with up to six individual options which can be exercised in the event of success). ++ The obvious is the drilling plans, 3D, drill location and prospective resource per well, perhaps another increase in leads and therefore risked resource base. ++ The forward strategy is where we can get speculative and given AK previous roles he will realise this. Without saying as much with the short to medium term focused on Niger as stated in this update, this must only leave a potential farm in. AK has stated that he and the board expects this to be a drilling campaign and as such it is reasonable to expect more than 3 wells. 6 additional wells if we find oil but how will these be funded if we don't have a JV partner with deep pockets!!! Value accretive means minimising shareholder dilution through equity finance in my book. -- The use of proceeds of the financing was to fund our first 3D seismic survey and our initial drilling campaign. ($40m fund raise) -- The data acquired is of excellent quality, and although our interpretation of the results is ongoing, initial indications are highly positive. (R3 EAST) ++ To understand the scale of this acreage the completed 3D only covers a portion of R3. The scale of this acreage is massive. -- Savannah's review of its acreage has shown that significant play potential exists in this formation, and that this usually sits directly above Eocene leads and therefore offers attractive "stacked" targets to evaluate exploration prospectivity across multiple horizons. ++ I would of thought the upcoming targets must be stacked and therefore drastically increased our chances of success. The board keeps making reference to the 'sweet spot' and the 'repeatable' success that must be transferable from CNPC's assets. -- We are also in discussions with our partners in relation to the pursuit of other potential opportunities in Nigeria, and look forward to providing further updates on this over the course of 2017. ++ Again bonus news which will drive volume and therefore share price, this could be a hidden gem as pointed out by ZENGAS. -- Over the course of the year, exploration and evaluation assets grew from US$81m at year end 2015 to US$97m at year end 2016. ++ This puts into perspective the current 'back costs' associated with our asset, not including the estimated $1.5 billion of data we inherited. Another reason why a JV partner has to pay for a higher than normal chance of success.
zengas: Not too late imo. It has taken two and a half years to get to this point and £83m cash raised buying 4 blocks and significant seismic work. I'm in since near day one. The 3 placings were heavily backed by some top tier blue chip investors. 1) 52.3m shares @ 56p = £29.28m. 2) 61.69m shares @ 38p = £23.44m. 3) 79.835m shares @ 38p (when the share price was 23p) = £30.33m. Earlier investor/institutions added and overall the average cost of all money raised is 43p per share compared to todays price of 41.75p. Director option strike price to be in the money is 114p. With 2.185 billion bls risked recoverable. Average 17.5% Govt share (15-20% re 4 blocks) leaves 1.8 billion bls risked. 5% minority partner stake leaves 1.71 billion bls risked recoverable. With an estimated company and analyst valuation of $4.60/b in the ground the risked recoverable 1.71 billion bls is almost $7.9 billion or just over £6 billion. Factoring in the Chinese success rate of up to 79% attaining 975 mmbo P2 and 4 more discoveries, reported as supposedly being an additional 200 mmbls since mid last year - therefore any farm out for up to 50% and previously talked about figures of $250m is a small price to pay for drill ready acreage, multiple prospects and multiple reservoir targets per well. If we are left post any farmout with a minimum of 50%, the risked recoverable is some £3 billion of target value for SAVP and significantly funded by farmout funds - compared to a valuation of circa £110m now. (There may be an update/increase to above numbers post seismic interpretation).
thomasthetank1: Mirabaud Savannah Petroleum (SAVP LN) has confirmed the formal signature of its drilling contract with Great Wall Drilling, the Chinese services company, following the letter of award announced in March. As previously outlined, the contract includes 3 firm wells plus 6 options with drilling anticipated to start by the end of Q2. Following completion of its recent 3D seismic survey over the R3 area, the company should be in a position to confirm well locations at its upcoming Capital Markets Day on 7 June. The company has already stated that it plans to focus the initial three well campaign on the R3 block which contains similar low risk fault block structures to those drilled by CNPC in adjacent acreage (with a success rate of >75%). On a separate note, we would also add that a 5.3m block trade was executed on Friday clearing a line of SAVP stock at 38p which should open the door to another leg up in the share price as drilling draws nearer. RBC International Savannah Petroleum (SAVP.L): Takes Another Step Closer to Drilling Savannah today announced the signing of a formal rig contract with Great Wall Drilling Company Niger for Rig GWDC 215. As announced previously, the contract provides for a programme of three firm wells and includes options for a further six wells. Attention is focused on Block R3 area and we expect management to provide further details on its drilling plans and forward strategy at its 7th June Capital Markets Event in London.
zengas: My current view. 2185 mmbls risked recoverable which is likely to increase after the current 3D programme providing more upside. 95% interest = 2.075 billion bls. Govt share of 15-20% across all 4 licences. Therefore at least 1.71 billion bls net potential (pre any farm out). Page 8 latest broker valuation gives 155p per 126 mmboe net. So using those figures - 1700 mmbls recoverable = £21.00 possible value but needing some modest dilution later down the road for future drilling funds if going it alone. Farm out could bring significant cash impact injection depending on % amount farmed out perhaps $100m-$200m of drilling funds such is the opportunity and high COS spread over a good number of prospects. Should a 50% farmout occur - A 50% stake gives an overall 850 mmbls net or £10.50 target and less future dilution. Eocene targets given as 79% COS and overall average including other stacked targets give 67% COS. You don’t get much better than that. Chinese success was 975 mmbls and up to 80% success rate. If SAVP were to get just 25-35% success rate and on a 50% farm out, share price target has to be worth 260 -360p + impact of any farm value in negating need for future finance re drilling. Any early success from the fully funded programme for the initial wells could forward price in some of the potential huge future upside for additional success - imo over £2 - ie similarly as per Sound Energy at £520m m/cap (no reserves declared other than having 2 well tests and now on an EWT). Savp floated at 58p and last funding at 38p (while the share price was 23p) so that's only a 4 -5 upside for those substantial investors. A further opportunity is this, (in this current year) - ie Broker note mentions that ‘NNPCs exploration arm (FES) on the Nigerian side has received approval for a very large 5,000 km2 3D seismic programme (which is already underway) and a 6 well drilling campaign. The driver for FES is that SAVP has a significant database and technical understanding on its portion of the rift basin. In exchange for its involvement, SAVP expects to earn a back right (to be determined in further talks) in a success case, providing meaningful optionality in a new exploration frontier without any of the associated capital costs’. This could yet prove significant value in a success case.
thomasthetank1: Hi all - Thought you might like to see Mirabaud's positive take on yesterday's releases. After the close yesterday, Savannah Petroleum (SAVP LN) announced an upbeat operational update and separate strategic tie-up with the Nigerian Government for operations in neighbouring Nigeria. The timing of the announcement was designed to coincide with an analyst site visit and presentation that took place yesterday in Niger. The Nigerian deal is multi-faceted. Firstly, a Memorandum of Understanding (MoU) has been signed with State-owned affiliates NNDC and NNPC to provide technical assistance to their northern exploration arm, FES (Frontier Exploration Services), in the Nigerian portion of the Central African Rift System. FES has received approval for a ~5,000km2 3D seismic programme (which is already underway) and six well drilling campaign in this area (starting in 2017) amidst a Government push to regenerate the north of the country under President Buhari. The driver for FES is that SAVP has a significant database and technical understanding of the Niger portion of the Central African Rift. Meanwhile, in exchange for its involvement, SAVP expects to earn a back in right (to be determined in further talks) in a success case, providing meaningful optionality in a new exploration frontier without any of the associated capital costs. Secondly, in parallel with the Nigerian & Niger Governments and other stakeholders, SAVP has established a more profitable export solution for any oil discovered in its Niger licences. This will involve the export of crude (initially via truck, prior to the construction of a pipeline) from the Agadem basin to the Kaduna refinery in north-central Nigeria, located ~800km away (this option was not considered a priority under the former Goodluck Jonathon administration in Nigeria). Construction of the pipeline is expected to funded by a pipeline consortium, likely including the Governments of Nigeria and Niger, SAVP (through a separate infrastructure SPV) and other third parties. This provides an alternative export route and therefore reduces dependence on the CNPC’s sponsored Agadem-Chad export line. It also has two other key advantages for SAVP: firstly it will enable early exports via truck, potentially bringing forward production and cash flow. And secondly, it is economically more attractive. Running a long term oil price of US$60/bb (inflated at 2%) SAVP estimates a breakeven (10% IRR) of US$35/bbl for trucked crude to Kaduna and just US$26/bbl if the crude is piped. We would add that these economics have been independently verified by CGG (SAVP’s reserve auditor) and include significant capital cost savings (maximum cash draw-down to first oil now US$200m vs. US$410m before) achieved through the transfer of capex into opex (the most significant aspect of which is the inclusion of an early production facility using a material amount of rental equipment). Turning to the operation update, SAVP continues to make solid progress on the ground in Niger with 3D acquisition underway in the R3 block and completion seen in February 2017. This ~800km2 dataset will take about four months to process and interpret, providing further definition on the 2D-defined structures in the block (numbering 12 prospects) and potentially unlocking new targets. As planned, drilling is set to commence in mid-H1 2017, most likely on the Damissa prospect in R1 (93 mmbbls of prospective resources) which already has 3D coverage, followed by Bushiya (37 mmbbls) and Kunama (35 mmbbls) in R3. A drilling contract is expected to be sealed in January 2017 and will conclude 3 firm wells and multiple optional slots. Having raised US$40m of equity over the summer the company is funded for up to 5 wells from its own cash resources with the potential to unlock considerable value. Assuming five wells targeting ~200 mmbbls on aggregate, we estimate total unrisked upside of 194p/shr – compared to the current share price of 27.5p/shr – even before factoring in the economic improvements discussed above. Overall, yesterday’s update brings several new elements to SAVP’s story that enhance the investment case in our view. The establishment of the exploration tie-up with FES brings material optionality at low cost, whilst the new export route provides an alternative to the Chad pipeline and enhances project economics – emphasising the attractive breakeven price for Agadem crude (something that can do no harm in ongoing farm-out talks). For the market, meanwhile, confirmation of SAVP’s low risk, multi-well drilling campaign in H1 may be of more importance. Once a drilling contract is signed and the timeline is set in stone we see this as the key catalyst for a re-rating of the shares.
dalesman: It’s been a while since I updated my Savannah Petroleum spreadsheets. A lot has happened in the interval, including a rapidly falling oil price and a downgrading of the long-term oil price assumption. As with most oil shares the share price has fallen in line with this fall in POO, many companies have fallen much more than the percentage decline in the oil price. In comparison Savannah has done quite well. Savannah had a recent high of 44p and a low of 28p. Current Share Price is 32.5p at the time of writing this post. We are now entering an exciting period in the life cycle of this company and some interesting times lie ahead starting with the next 3 months. Lets have a look at how the company stands right now. To view the post plus the screenshots of the spreadsheets referred to in this post go to HTTP:// Screen Shot 2015-10-16 at 16.20.34 A screen shot of the Summary Page sets the scene. We have 193m shares in issue following a placing that raised $38m to purchase two further blocks, R3 and R4 in the Agadem Rift Basin in Niger. The company raised this money at a premium to the then current share price The current market cap is 62.7m We have around 8 million in cash and this works out at around 4p per share. A competent persons report on the companies R1 and R2 blocks revealed 1.191 million prospective resources, a significant number. Screen Shot 2015-10-16 at 17.50.34 The Chinese have achieved an 80% success rate using 3D seismic. Savannah has in addition to 2D and 3D seismic undertaken a Full Tensor Gravimetric Survey carried out by Arkex and this has been integrated into their sub surface model, helping to identify 14 drilling prospects, which they hope to start to drill in Q4 of 2015. They are actively looking for an industry partner willing and able to inject $150m plus into the partnership. Lets look at the position before any farm in. The Summary Page encapsulates all this information. Savannah has a 95% entitlement on blocks R1 and R2 but the Niger Government has the right to a 20% back in so on success Savannah has 95 x 80 / 100 = 76%. Without any farmin partner SAVP has a fully diluted 76% entitlement before the details of the PSC are applied. You can view this figure in column P. The Tax Opex and Capex workbook handles Royalties etc. Without going into detail regarding the working of the Reserves Analysis Sheet the valuation based on 8 million barrels being achieved from the first five wells comes out at £2.41 Screen Shot 2015-10-16 at 18.10.11 based on a $65 long term oil price assumption. If the current oil price is applied then this reduces to £1.27 If the company decides to go it alone and raises £25 m to fund a 5 well drilling program, increasing the shares in issue by say 80m then my target reduces to £1.25 with 273m shares in issue and using the current oil price. All these price target figures include a 25% reduction due to negative sentiment relating to the oil sector as a whole. The management options vest at £1.14 However….. It is quite clear that the preferred way forward is to attract a farmin partner willing and able to inject $150 - $200 million into the venture. I’m assuming that 50% of SAVPs entitlement will be given up to secure this deal so this reduces the entitlement figure from 76% to 38% but increases the cash by say $154m or £100m. This would raise the cash per share from 4p to 56p without raising the shares in issue. The figure would fund 25 plus wells being drilled in the Agadem Basin. Double click on the image to see full size. Screen Shot 2015-10-16 at 18.14.03 The resulting target is now £1.15 based on 8 million barrels found from the 5 wells but a cash injection of $150m would allow 25 wells to be funded with say a 40m target. This raises my initial target to £1.27 at the current share price if a long-term oil price assumption of $65 is applied this figure rises to £1.73 (see above) This is, IMHO, an ultra conservative initial valuation. Remember over 1 billion barrels are inferred in the CPR. Effectively this valuation only allows for 40m barrels to be moved into the 2P reserves category. My initial target, giving an upside from the current share price of around 300% is possibly on the cards remembering that when the options vest additional shares will be issued. The Chinese had an 80% success rate when translating prospective resources into 2P reserves. My figures are using a 60% chance of success for an initial 25 well drilling campaign targeting 40m of 2P reserves. This leaves just short of a billion barrels still to be accessed! We need only 4.39 mb of 2P reserves to cover the current share price The nice thing about my software is that it is simple to change the scenarios . Please do your own research and act accordingly and good luck with your investments. Hope that helps Kind regards Phil I hold Dalesmann gives no advice on buying selling and holding this, or any other stock mentioned in his posts. His posts are for education only.
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