Savannah Energy Share Discussion Threads

[interzone] 06/8/2023 07:56

Interesting article on Niger and democracy in the Sahel region

[thommie] 05/8/2023 22:58

Just chill. It's no option for me to sell my shares even if the readmission isnt done in circunstances that favour the so development in the near future. I wont sell if SS completes, as I will be waiting for the ICC ruling that in my opinion has a big chance of being decided in saves favour. If SS fails I will still wait for the ICC ruling and wont sell my shares for cheap. So in the end it doesnt really matter what happens next... Niger is sad, but not a big problem. It would be a good option to earn money over the course of the next 10-20 years if everything works with further exploration sucesses and production of current findings. (in the next 2-3 years at best adding 5kbopd production) thats just marginal... When Niger would be stable and exploration sucesses would go on like before Agadem could add big production numbers starting in 5-10 years from now, but would also need big capex before earning anything. So nothing material in the timeframe Im looking for. Even if we lose the renewable projects in Niger - so what? Although it's the right thing to do in our current state of the world to try to produce energy renewable the return on investment is marginal and isnt comparable at all with the oil deals. So it just doesnt matter, it would even put a burden on save in the medium term, as it would cost a lot of up front capex before any revenue comes in... I just put photovoltaik on my roof, it currently will take around 15-20 years before I reach the breakeven and maybe start making some money with it... Its still the right thing to do, why I did it and it feels very good to produce 4 times the energy you need yourself, but it doesnt yield benefits like other investments can if they work... So again, just chill. Good things take time :)

[1madmarky] 05/8/2023 22:32

Thanks Interzone, I was curious as to what others thought.

[interzone] 05/8/2023 18:48

Agree 1MadM, think the down side for Save is limited. In the annual report they stated that the terms had been changed as a result of the Nationalisation, suggesting Save had already identified it as a possibility and built it into the contract terms with Exxon.Ak is no mug imo.

[1madmarky] 05/8/2023 17:45

Ok, lets say we loose the arbitration. The debt we owe is based on the income from the liftings. So that $170m would get written off. Plus we'd be out of Chad.... we would have wasted a fair bit of time and money and shareholders have been diluted, but would it really be that bad?

[interzone] 05/8/2023 09:38

Yes, that's the ideal scenario for us and you would like to think that Save have covered all bases before instigating the arbitration proceedings. Only pain is that realistically it could be a year or more before we get the ruling, which is why in the short term it's critical we get SS over the line. So close and yet so far at the moment!

[thommie] 05/8/2023 09:26

In the end they dont have any other options as all is decided by money as usual. As the money is managed outside the country by international banks that control the in and outflows of money from liftings at the kribi port or payments to the shareholders and to cotco - chad and cameroon can do nothing. The International banks dont have an option not to listen to the ICC ruling, otherwise they will get sanctioned as well... So again all depends on the final ICC ruling, if they rule in saves favour I have absolutely no doubt, that save will get its money quite fast through the revenue from liftings at kribi. There is no other option for chad to sell or use the oil inside their country in such quantity. They will always need the International markets. After the nationalisation of the 40% Exxon stake and the purchase of the 30% petronas stake plus the stake they already owned after buying the 25%.chevron stake some years ago they would own literally the whole doba fields. At current production of around 25-30k bopd the revenue from liftings should be quite big to pay down any arbitration ruling very fast by confiscating the kribi lifting money. If the ICC would award save with something around 1 billion $ the whole standoff would be worth all the time. 1 billion of revenue for work of 3-4 years sounds pretty fantastic and would open much more headroom for further even bigger aquisitions... Lets dream...

[interzone] 05/8/2023 08:29

Yes, good point Thommie, though I guess if they ignore the directive then that's doesn't do their chances of success at the arbitartion much good, plus if they do it's bringing Cameroon into conflict as well. My guess is that they will probably adhere to it and wait to see what the ruling is before deciding how to react. Could be totally wrong mind!

[thommie] 04/8/2023 21:40

Well it's nothing more like an Email from the representative of save on the Board who was the ceo of cotco till they replaced him. Ofc he sees the ICC ruling as binding and asks all employees to accept it as it favours him and save. But it's nothing more like that. It's no official statement by the board members from cameroon and chad like "ok ICC ruled, we step down and go back to the pre 24th may configuration..." I dont see that as proof that cotco accepted the ICC ruling.

[fireplace22] 04/8/2023 14:27

SAVE may be suspended but it's never dull.

[interzone] 04/8/2023 14:15

Savannah business: Djerassem Le Bemadjiel is no longer Cotco's PCA
Today 14:14

In an internal email where Le Pays was able to come into possession, the general manager of Cotco asked all its employees to comply with the request of the emergency arbitrator, solicited by Savannah energy. The emergency arbitrator of the Chamber of Commerce and Industry of Paris had suspended the effects of the resolutions adopted during the General Meeting of May 24, 2023 and the Board of Directors of Cotco, of July 4.

As you know, Savannah Midstream Investment Limited (“SMIL”) has requested from an Emergency Arbitrator measures aimed in particular at suspending the resolutions adopted during the purported General Meeting of May 24, 2023 and the purported Board of Directors of the July 4, 2023.

"This decision is binding and binding on Cotco," said the general manager, Nicolas de BBlanpré. Therefore, he continues, “the purported Board of Directors pursuant to the resolutions adopted on July 4, 2023, now suspended, has no authority to represent Cotco. The measures adopted by this so-called Board of Directors cannot produce any effect. Likewise, the alleged new management of COTCO, put in place by the resolutions of the purported Board of Directors of July 4, 2023 – now suspended – has no basis to exercise its functions”.

According to Nicolas de Blanpré, the following people cannot exercise their alleged functions and represent Cotco, and all the decisions they have taken are without effect: “Djerassem Le Bemadjiel, alleged Chairman of the Board of Directors; Harouna Bako, purported administrator and Managing Director; Mrs. Haoua Daoussa, alleged Deputy General Manager”, he specifies.

Nicolas de Blanpré Informs that the Board of Directors of Cotco is that of May 24, 2023, which has not been subject to any suspension measure. As a reminder, this Board of Directors is made up of: Nicolas de Blanpré, Chairman of the Board of Directors and Chief Executive Officer; Yacine Wafy; Joseph Pagop Noupoue; Anthony Richard; Djerassem Le Bemadjiel; Tahir Hamid Nguilin; Igor Emmanuel Soya Bissaya; Judith Clairence Menguele; Adoum Mahamat Adoum; · Mr. Henri Mbairari Bari.

[napoleon 14th] 04/8/2023 02:10

Well, that's a bit of good news.
Looks like the junta are going to have a tough time keeping power, but WYFDIK?

Maybe SAVE should get friendly/er with PetroChina if advantageous...

We live in hope.

[zengas] 03/8/2023 18:20

Agadem pipeline today announcement

[napoleon 14th] 02/8/2023 14:17

Dunno who the two reds are, nor do I care.
Either it's a reaction to the jist of what I say, or simply not understanding it.
BTW, I have been sitting on shares in this jam tomorrow company for too long.
Lots promised, peeps talking of 100p/share etc... but suspended twice for over 12 months out of 30 in all. The reality of it reminds me of SOU!

FACTS - The Sahel region is in turmoil, Boko haram etc still active, French troops on guard but don't have the upper hand and countries where the military make the rules.
Putin and Wagner have found the door wide open and are actively gaining position
(see the conference with Africa in St Petersburg) by promising food deliveries come what may and writing off loans to Africa (20 Billion US$ was it?). In view of events
in Ukraine it is obvious the Russian side would love to trump the West in Africa.
Furthermore, colonialism and slavery are themes that wind up the population who bear
a grudge against the western powers (France in this case) which any junta plays on
as much as possible.
All that without even mentioning China, FWIW...

Therefor it could well be that the Chad situation continues regardless of what
the ICC has to say.
Niger has blocked gold & uranium exports ( so what else, oil? "our" oil"?)
South Sudan keeps getting delayed and is still unsigned, drags on near a war zone.

There's not much left to put value in the share price - the gas business and some pipelines, but the security of the assets in this part of the world is such that
any insurer would think very hard before getting involved!

It is good practice to value things on a mean value basis - that's what bean counters do before signing off A/Cs as a true and fair view.
Time to do that on SAVE?

You can have the few SAVE shares I have at the price they are suspended.

[napoleon 14th] 02/8/2023 02:56

ICC, proceedings against Chad & so on...... So what?

If an insurection butts in, what then?

Niger has announced an export ban of gold & uranium to France. & then?
AK had better be 1000% careful about those events.
SAVE's balance sheet could look very shaky if Niger turned against SAVE.

We have the same "exploting, colonist white man" profile in Africa,
& as these coups demonstrate we can't do much in response,
especially when bogged down in Ukraine to the point where
US are sending cluster bombs 'cos they're out of 155mm ordnance.

BRICS meet mid-month followed by a cohort ready to jump on board.
Hmmmm.....

[thommie] 01/8/2023 12:59

Thx for the numbers Zengas, but isnt that a highly conservative assumption for 20$\bbl free cashflow at an average brent price of around 90$\bbl throughout 1.1.2022?The cash flow should be asset specific, so the usual things like debt interest payments, decom costs, etc. dont lower the amount of cash. Thats usually the reason why the profit is so small while the revenue is huge if you look at different oil companys.If we assume 30$\bbl free cashflow that price to pay directly decreases by another 300m$ throughout the 18 month timeframe, not to think of the potential of more decreases over q3 2023. (50m$\month)

[zengas] 31/7/2023 15:12

Reflecting on that end of April analysis by Shore Capital and if they are close to their Accugas and COTCo assumptions

They show net debt of $257m end 2023 on those assets.

The headline figure is 'UP TO' $1250m for S.Sudan.

The oil price has been $100/b average for 2022 and $80/b average for 2023.

If FCF is an average $20/bl minimum x 55k bopd x 30 days = possible $33m/month.

If the 1/1/22 were to be the effective start date that would be a discount of $33m/month or a reduction of $600m+ by end of Sept 2023.

Further If $150m is based on contingencies in that 'up to' price - it just could mean we need $500m to complete the S.Sudan deal.

If $500m were to be the amount to complete the Accugas deal along with $257m year end expected net debt on Accugas - it's possible overall $750m net debt by this year with at least another $50m+ to knock off for Oct-Dec 2023 production from S.Sudan.

Therefore could Saves' net debt be as low as $700m overall this year end based on 55k bopd S.sudan oil/23k boepd at Uquo and circa $1.8 billion revenue.

[zengas] 31/7/2023 14:36

By contrast Shore Capitals anaylsis 3 months ago on 27/4/23 used $260m for an arbitration award on top of their $200m Chad-Cammeroon ETS valuation.

The paragraphs below suggest Save owed no more than $100m for the deal - not $170m as they have $70m of that cash on their balance sheet (can they use this for S.Sudan?).

Overall that would indicate a value if that award amount was successful along with the pipeline interets less $100m owed to Exxon max = about 19.5p overall net.

"The headline acquisition price for Chad was $407m, although we estimate that the final completion amount was less than $100m due to the presence of effective date and completion adjustments.

Assuming that Savannah drew down an amount apprroaching the maximum $170m under the Exxon facility, this would imply that a significant proportion ie >US$70m continues to sit on Savannahs balance sheet. This would seem consistent with the $217m of reported gross cash held at the end of March 2023. "

On the above basis re Accugas/Cotco revenue - they estimate closing net debt in 5 months (yr/e 23) of $257m.

[lloydypool] 31/7/2023 14:29

As I started typing I realised it was likely tongue in cheek, especially when you start to think how about just unfeasible it would be! I didn’t even think it worth discounting the options of new pipelines through other neighbouring countries as couldn’t decide whether they’d prefer the civil war in Sudan or Niger or maybe the ongoing Libyan issues!

God only knows what we will end up with from these assets but nothing would surprise me. Perhaps given Chad originally demanded Petronas out of the country nearly 20 years ago it isn’t impossible we are simply reinstated as the operator?

[interzone] 31/7/2023 14:25

For balance, the pro-Chad press are not talking about Chad giving in, rather enforcing their rights. Here is an example

'The ICC pre-arbitration procedure

After having tried, without success, to interfere with the social life and operations of COTCO and launched multiple procedures in Cameroon which have so far been unsuccessful, Savannah Energy relied on a pre-arbitration procedure, without enforceability, introduced on July 12, 2023.

The order resulting from this emergency procedure on July 28, 2023 purports to review the effect of certain decisions of COTCO's corporate bodies and will, on these points, be vigorously contested by COTCO and the Chad through all possible legal remedies during the arbitral proceedings on the merits. Savannah Energy's mercantile aims cannot outweigh Chad's vital economic stakes.

Moreover, the pre-arbitration order is damning for Savannah Energy. Indeed, the emergency arbitrator refused to acknowledge that the Savannah directors have citizenship on COTCO's board of directors, and stresses that COTCO, represented by its current Cameroonian general manager, must have free access to the all of its funds to avoid any impact on the operation of the Chad-Cameroon pipeline. The arbitrator also confirms that the alleged objections raised by Savannah Energy in relation to the acquisition of Petronas' interests in Chad and in COTCO cannot be taken seriously. The arbitrator also found that Savannah Energy is unable to justify any authorization validating its illicit acquisition of the Esso entities, which invalidates any presence of Savannah Energy in COTCO. So, as the Chadian authorities will demonstrate during the dispute resolution procedure on the merits, it was Savannah Energy that caused its own loss. And it is Savannah Energy which seeks by all means and without success to capitalize on an illicit acquisition.

Pending the resolution of the dispute on the merits, it was necessary for COTCO shareholders to secure the continuity of decision-making within the corporate bodies and operations of the company that operates the pipeline, a strategic asset for the economy of Chad. and security of the sub-region. The shared management of COTCO between Chad and Cameroon makes it possible to envisage the operation of this major infrastructure with full confidence. '

hxxps://www-alwihdainfo-com.translate.goog/Gestion-partagee-du-pipeline-Tchad-Cameroun-Savannah-introduit-une-procedure-pre-arbitrale_a125183.html?fbclid=IwAR3UMIJk3PQvzRJAQu7ldWL4scJGvRARRcRBVd32P_P8aWWFS7l2q9xZa9s&_x_tr_sl=fr&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp

[zengas] 31/7/2023 14:08

Saves initial cost for the Exxon assets was put at $372m & up to $50m contingent.

This was for 40% of the Doba Oil project which was approx 12,000 bopd + 55.4 mmbo 2P + 44.1 mmbo 2C. Pipeline interest of 40.2% in TOTCo & 41.1% in COTCo.

Save said they were going after what they had lost and would lose as a result of the nationalisation.

At the minimum in the relisting presentation - Saves 9 year free asset cash flow was estimated at $76.5m/yr average = $688.5m and when added to the purchase price = $1060m before contingencies.

The FCF without re-investment even if it was all profit and taxable at 30% leaves an overall 9 year figure along with the original purchase price coming down to around $850m .

Separately FinnCap on the 27/3/23 had a valaution of $368.2m for the 2P, $297.3m for both pipeline interests, $131.8m for the 2C and $41.2m for pipeline upside = Total $838.5m.

Given Save were prepared to sell 10% of COTCo for $44.9m - strip out a pro-rata 41.06% in total for COTCo and 90% of the upside figure - in total $221m - it should leave some $600m to chase (not counting the 41.06% of COTCo or $221m stripped out which should never have been in doubt as it's not part of Chads remit).

On the basis of 1420m fully diluted shares £1/$1.30

$600m compensation = 32p/share.

COTCo 41.06% valaution pro-rata based on currently intended 10% sale $184m = 10p/share.

$170m owed to Exxon ?? = less 9p/share..

If successful, how it's paid is anyones guess but with access to bank accounts and the country being landlocked it should be possible to recover the cash some way.

[1madmarky] 31/7/2023 14:05

Was somewhat tougue in cheek, but anything could happen.

[lloydypool] 31/7/2023 13:51

Wouldn’t put anything past them but I’d imagine that’s logistically far from possible or they’d already have attempted it. I’m sure they’ll try something but hopefully this news is the start of a much better turn of events here that starts to see the share price move dramatically upwards, when it eventually relists of course.

How oil trucks would be needed to replace the pipeline? Don’t they hold a few hundred barrels of oil each? I imagine the nearest port would be the one in Cameroon & if they try to cut Cameroon out of the chain by not using the pipe then doubt they’d be very open to allow an endless stream of trucks.

In short, the pipeline is essential to any Chad oil production to be sold internationally so if the revenues are frozen sure Chad have to agree expedite some sort of settlement or go on without these oil revenues indefinitely?