Savannah Energy Share Discussion Threads

[plentymorefish] 26/7/2023 19:15

Let’s see how the share price reacts tomorrow…̷0;…

[sunbed44] 26/7/2023 19:04

Wonder if they will look to nationalise the Agadem oil field

[divmad] 26/7/2023 18:29

Just wonderful.

[che7win] 26/7/2023 18:24

Niger coup underway?

[piperpeter] 26/7/2023 15:09

Just trying to get the word around ZENGAS.

Wish they had re-visited Jacaranda and deepened to intercept oil below the very high levels of gas present there. That was their intention at the time.

Lapacho did drill through two oil zones with "side wall cores bleeding live oil". They had a bad cement job done and water from higher up contaminated the test of the upper oil zones. They had a short period test with movable hydrocarbons deeper down, but the equipment blocked. Still convinced this is an oil discovery.

This current Tapir well is actually the third well that wasn't drilled back in the 2014 three well programme. This time we have partners with deep pockets, CPC Corporation. They are paying 60% of the costs, although it is a 50/50 venture for the Pirity Concession. I believe Peter Levine said something along the lines of "save the best for last". We will soon know, I suppose.

You may be interested that they will also drill the Martinez Del Tineo deep gas prospect later this year with a well that will also target proven oil reserves above. That also would be very significant, with huge numbers (gas), should it come in.

On the point of the spin out of MEN's green arm, Green House Capital Group PLC, bear in mind that when Atome was spun out, in 2021, the in specie dividend was about 20%, although the Company market cap was considerably higher then, so am hoping the in specie dividend re Green House Capital Group Plc will be considerably higher taking today's market cap into consideration. We shall see.

Also, there is a lithium project the Company is keeping quiet on at the moment, but I assume news will arrive at some point. Could surprise.

Pp.

[zengas] 26/7/2023 14:38

Thanks PP, interesting that the green arm would be worth more than the entire oil/gas end.

Hope PL has much greater luck this time round in Paraguay.

[piperpeter] 26/7/2023 13:21

ZENGAS, re MEN.

The "spin-out" green arm of MEN, Green House Capital Group PLC is expected to have a pre money valuation at IPO of US$20 million, which is higher than MEN's current market cap of GBP13 million.

It'll be interesting to see what the in specie dividend will be for the MEN shareholders. Quite a yield I would assume, taking today's company valuation in mind.

Part of the GHC group being spun out is Aton 6 PLC, a carbon trading company, which looks to be very interesting. Its website (Aton 6) has just been updated. Well worth the visit.



Pp.

[zengas] 26/7/2023 12:31

and in light of that - to follow up on how other companies/analysts see the valuation lag or need to do something about it -

When i mentioned last week the possibility of closing the valuation gap by possibly a future joint listing on the NYSE to replicate a value more closely to the likes of Kosmos and those across the pond - i was thinking of a timescale within 24 months.

I honestly think the renewables division will be missed by many and undervaluing SAVE as a whole as well - so like MEN, Shell and others it would not surprise me to see a spin off in the future where it's value would grow with a seperate listing and SAVE being a major holder and cash recieved as well from an IPO into the oil/gas divsion. With so much in the pipeline for the renewables division an ipo spin off would give much greater value in the medium term.

Peter Levines Molecular Energies PLC (formerly President Energy - prior to this he floated Imperial Energy in 2005 from under £20m and sold for £1.4b in 2008) last month is also considering spinning out it's renewables arm.

"The Company has oil and gas production in Argentina as well as exploration assets in both Argentina and Paraguay. The Company has two separate subdivisions which are focused on early-stage opportunities in the green and/or alternative energy sub-sector.

Molecular Energies PLC (AIM: MEN), the international energy company, is pleased to announce its intention to spin out and IPO its Green House Capital alternative energies division ("Green House").

The spin-out will expose Green House to a wider investor audience that is more focused on the growing market for green solutions.

Significant progress within Green House gives management confidence that the Company will attract new energy focused investors and command a valuation not recognised by being part of the Molecular Group."



And at Shell - "Spinning out the renewables arm could help to boost Shell’s stock market valuation, which may actually be hurt by its current green energy businesses, he added.

Mr Borkhataria said: “It’s clear that these types of [renewable] assets do not get reflected in Shell’s valuation – typically, the company actually gets penalised for it.

“So there is an opportunity to realise and crystallise that value gap"

[zengas] 26/7/2023 12:29

I posted this a week ago on the other board so wondering what folks thoughts are -

For the money man and deal maker that AK is, surely at some point he would seriously consider a dual listing on the NYSE -not just a move to the main market off AIM.

Oil Company valuations are much better compared to those in the UK. Even Shell is half that of its comparative US cousins.

This would give us even closer to parity on reserves, production, revenue and possible cash flow to Kosmos that has that dual listing.

Given that SAVE is already moving to become one of the biggest renewables investor in Africa and a target of 2.4 GW in motion in the next 17 months alone, surely the appeal for greater investor interest to lift the value must be significant.

AK himself is a very significant holder so i would be surprised if this will not be considered once the next few acquisitions are completed as i'm sure he'd rather have as much as possible for his shares from all possible value creation and recognition angles rather than less in the UK alone.

I think we will be undervalued in the UK alone and we will on all intents be both a very large oil & gas company and a major emerging renewables company.

Two things -

The SAVE oil/gas business should more reflect the growth to match that of Kosmos which itself is solely oil/gas - and by the way has no renewables arm.

KOS currently has a £2.46b m/cap and $2.1b/£1.64b net debt with 580 mmboe 2P & 61K boepd production.

The SAVE renewables arm could be floated off separately - but if not it should attract a significant valuation in its own right but i fear being part of a traditional oil/gas Co might be undervalued/misunderstood by being solely listed in the UK.

There must be valuations attributed to both in time.

Lekela Power with 1GW of operational African wind and a further 225 MW in development was sold for an enterprise value of $1.5b. I would hope to see our renewables division grow to a much greater level given the 240 GW African target by 2030.

[thommie] 26/7/2023 12:24

What does it mean Interzone? I dont get it.

[piperpeter] 26/7/2023 11:37

Some may be interested....

MEN.

Mobilisation of rig has begun for drilling of high impact oil exploration well in the Chaco, Paraguay, partnered with CPC Corporation.

MEN.

Pp.

[upwego] 24/7/2023 17:39

Balance Payable

[interzone] 24/7/2023 16:44

Interesting spot from TiL on LSE:

On Exxon Debt Facility of $170m, it seems that the payment was tied to Doba crude oil liftings and distributions made from Cotco it say's the facility has since been amended to reflect Doba nationalisation so that is a huge positive

From Annual report (page 169)

'In December 2022, Savannah Energy Finance Limited entered into a term loan facility of $170.0 million to fund the acquisition of the Chad and Cameroon Assets. The loan carries an annual interest rate of 7% plus three months’ SOFR. Repayments are made from cash generated from future oil liftings within the upstream business in Chad, as well as distributions made from COTCo. The facility was guaranteed by the Company up to US$34 million; this guarantee has been treated as an insurance contract under IFRS 4. Following the Nationalisation, the terms of this facility were amended in 2023.'

[zengas] 24/7/2023 15:25

AI on the 18/1/22

' Savannah is also looking with great interest at Petronas shares for sale in South Sudan. The British junior informed Petronas of this during the negotiations in Chad. The assets represent some 75,000 bpd for Petronas, with reserves of 300m barrels.'

[sunbed44] 24/7/2023 15:20

Balance payable or market cap

[upwego] 24/7/2023 15:17

I`m guessing $600m

[zengas] 24/7/2023 13:37

Re the 'UP TO $1250m S.Sudan headline figure.

The FinnCap note of 4th January 2022 page 9 at the time of the Petronas & Exxon assets assumed the acquisition price of $3.40 P2 barrel for the 103.8 mmbo 2P reserves with another 82 mmbo 2C.

With 22,500 bopd production = $15,700 flowing bl.

--------------------------------------

Afentra 19-7-23 on the Azule offshore Angola acquistion. "The attractive acquisition cost implies approx. $3.7/bbl based on 2P reserves". This is their 3rd acquisition on the same assets and gives them 6,000 bopd + 32 mmbo 2P oil + 20 mmbo 2C all done at $3.90b max which also includes some licence interests over and above production which has a discovery. If oil goes way above in 2 cases $65 and $75/b there are bonus payments to be made for 2 of the acquistions but these are spread out over 3 and 10 years respectively.

Flowing cost per bl approx $20,400.

For South Sudan - SAVE say "UP TO" $1,250m (so doesn't sound definitive to me) where as in the Petronas Chad acquisition it was for a definitive fixed sum when announced, while Exxon Chad was an up to price which included a contingency.

So does the "UP TO" $1250m price tag include possible contingencies for higher oil prices/production profile case ?

We know little other than AI reported the reserves were some 300 mmbls - was this all 2P. There's also likely to be considerable 2C.

Based on what Save were paying for Chad ie an assumed $3.40 this would mean the 300 mmbls 2P in S.Sudan costing $1 billion pro rata. They are landlocked like Chad having to export a considerable distance through another country before reaching the loading terminal.

Based on $3.70 for Afentras offshore Azule acquistion and $3.82 for all - these are offshore and measurably less risk for export. That would imply $1.1 - $1.15 billion for the S.Sudan 300 mmbls 2P.

If you use the Chad price of $15,700 and Angola $20,400 flowing bl price - the 55,000 expected production in South Sudan could be in the $860m - $1.1b range. So on the flowing metric and 2P price examples it doesn't come to the UP TO $1250m and i can't see why SAVE would overpay given the risk never mind the Chad price example and the lower risk offshore Angola price example.

Unless there is signifcantly more reserves, greater production or some other infrastructure in S.Sudan that gives income - therefore on 300 mmbo P2 and 55k production i woukd hope for a $1b price tag with any contingencies taking it to that 'up to' $1250m initially quoted figure.

Apply a discount figure and if it's 1/1/22 then that could be a substantial deduction from $1 billion.

[thommie] 22/7/2023 13:30

The last time they rnsed a schedule one 14 days before publication of the ad doc, but then directly announced the next RTO (SS) before trading could resume. I have a feeling that the timelines will get pushed further into the future again. If the deal completes in the end that would be very beneficial for save, as less debt would have to be taken on, which means lower interest payments in the years to come. But only if it is finally approved by the government. I would be ok with more debt but finally some security having crossed the line...

[interzone] 22/7/2023 13:21

RNS on the 8th June said they intended to publish the admission document 'by 28th July 2023' so only 5 trading days till then. However, in the same RNS they also referred to it being published in Q3 and a few posters correspondence with IR subsequently have also just referred to Q3. Hopefully if it has slipped they publish a new date on the 28th rather than just let us guess!

[croasdalelfc] 22/7/2023 12:06

6 trading days left in July

[dcarn] 21/7/2023 14:11

Odds on an after-hours RNS today?

Fridays have been a popular day in the past.

[zengas] 21/7/2023 13:20

I said recently i was loathe to post some artictles because unless a reader can keep up with all the past posts - individuals named/sides they're on etc re SNH/COTCo saga - its fairly pointless imo. I just don't see COTCCo being the most important thing right now and as time goes on i expect it to be only a small part of our overall assets until hopefully we win back Chad, compensation or neither. Some might say why would we want the assets, but at some point there may well be a change of government or some agreement. (Chevron were once booted out for awhile). But here it is fow now.

' On holiday in Geneva since June, President Paul Biya has just received a letter from Adolphe Moudiki, the steadfast CEO of the Société Nationale des Hydrocarbures (SNH). Moudiki has asked the Cameroonian leader to authorise the Minister of Justice Laurent Esso to open a legal investigation into confessions made by Glencore in the US courts last year. It is, to put it mildly, a radical change of position for Moudiki.

On 24 May 2022, the Swiss trading giant admitted to paying out FCFA 7bn (€11m) between 2007 and 2018 to top executives of SNH and Société Nationale de Raffinage (Sonara). Moudiki subsequently denied this in a statement dated 30 May 2022, claiming that his company was "not in any way associated with such practices".

Ngoh Ngoh in the firing line

But his situation has evolved in the meantime. A longstanding friend of Biya, Moudiki has gone head-to-head with the president office's influential secretary-general, Ferdinand Ngoh Ngoh, in recent weeks over the Savannah Energy issue. Ngoh Ngoh publicly disowned him, freezing the agreement by which SNH would invest in the Cameroon Oil Transportation Co (Cotco, AI, 28/06/23), which the British energy company was selling its shares in. However, as chairman of SNH's board, Ngoh Ngoh could find himself embroiled in an investigation into its employees' alleged corruption by Glencore.
Justice Minister Esso was also threatened, in this instance over the murder of the journalist Martinez Zogo. The man who stands accused of ordering the killing, Jean-Pierre Amougou Belinga, is one of the minister's close acquaintances. Ngoh Ngoh tried to use the crime to get rid of his rivals. He was successful with the head of the foreign intelligence service Léopold Maxime Eko Eko, but had less luck with Esso, who has long been close to the president (AI, 09/02/23).

Motaze makes his move

Meanwhile, Minister of Finance Louis-Paul Motaze has asked his teams to investigate Glencore's revelations. Civil servants could use anti-corruption lawyer Akere Muna's court filing in Limbé, Douala and Yaoundé. The renowned lawyer wrote this week to the head of customs Edwin Fongod Nuvaga, the head of the tax office Roger Athanase Meyong Abath, and the head of the Agence Nationale d'Investigation Financière, Hubert Ndé Sambone, to ask them to take up the matter. He had already spoke nwith the head of the tax office on 2 June.

And lastly, the head of the audit office Yap Abdou was informed a few weeks ago that he should be prepared to launch an investigation similar to those his office conducted into the use of funds to combat Covid-19 (AI, 28/10/22).

GAFI and EITI ramp up the pressure

It is in the Cameroonian authorities' interests to demonstrate that they are taking Glencore's confession seriously. On 23 June, the country was put on a "grey list" of states placed under "heightened surveillance" by the Financial Action Task Force (FATF), which tackles money laundering and terrorism financing. Ten days earlier, at its global conference in Dakar on 13-14, the Extractive Industries Transparency Initiative (EITI) officially called on "the governments of the six African victim states to draw upon all the necessary resources for joint and separate judicial action against Glencore and its accomplices".

The Swiss group admitted that between 2007 and 2018 it paid nearly $100m, either directly or via its subsidiaries - to companies serving as intermediaries in a bid to obtain and hold onto contracts with public entities in Nigeria, Cameroon, Ivory Coast, the DRC and Equatorial Guinea.'

[zengas] 21/7/2023 12:50

Right now my wish is to see S. Sudan completed on non recourse debt terms and not so much COTCo focus given where our size will hopefully soon be.

If as i hope S.Sudan circa 300 mmbls reserves and 50-55k bopd = possible $1.3-$1.5b revenue + i believe Accugas should be circa $300m revenue after that last gas contract = $1.6-$1.8b.

There's a 2nd Hydrocarbon asset to come by year end - but if it's 5-10-15k or more bopd region its possibly another $135m - $400m+ revenue range to think about, it all depends on how small or big the next deal is (and more than 1 possible).

Right now the S.Sudan deal is reducing in cost until completed.

As for Exxon Chad - let'stake it in our stride and context of overall lost immediate revenue - it's with the ICC as the proper course. End of the day we win the case or don't and Chads oil has to load at Kribi and leave the Cameroon coast by ship for international markets if we win.

We lost out on the 22.5K bopd revenue from Chad Exxon/Petronas - about $600m + a combined revenue for TOTCo + COCTCo of $152m - so in all the 2 deals were worth an expected revenue region of $750m.

Overall that would have meant we would have been on a revenue guide of about $2.35b - $2.55b by now ahead of the intended acquistion beyond S.Sudan -so thats how close we were and maybe still are depending on the next deals by this year end and '24.

Our remaining 41% COTCo revenue share should still account for $75-$80m as the pipeline element was about 90% COTCo to 10% TOTCo.

Nigeria/Accugas $300m, S.Sudan estimate $1.3-$1.5b and on deal completion see us on $1.7b - $1.9b revenue ahead of the next follow on hydrocarbon deals (using $75/b oil price).

As for S.Sudan i think they will derisk it further by building on a few more geographically spread hydrocarbon deals ('at least 1' by this year end) and to me its the unfortunate order they come to market in as on how risk is percieved now - versus a few more deals under our belt when non recourse to the company.

[zengas] 21/7/2023 12:38

JB obviously there must be some leeway or else it wouldn't be allowed to happen, so somebody somewhere has to OK it (nomad/stock exchange itself).