Savannah Energy Share Discussion Threads

[zengas] 27/9/2023 15:57

The new finance minister was appointed early August - is that the Presidents doing just before these Caltech discussions kicked off ?

I think the President himself has business interests or connections.

New finance minister said in that interview they have been discussing this with Caltech since about 22nd August - that's late in the day.

He said they had a 3 minute meeting in New York - seems quite, quite ridiculous not withstanding they want $3b including $1.25b to buy Petronas assets.

First 5 years as repayment holiday on a term of 13 years at an interest rate of 1.5% - never mind inflation.

Risk would be incredible on future oil prices never mind a future government and risk of not being able to repay with the economy predominantly dependent on oil, landlocked (for now) and a war raging on your only export route.

Seems somewhat very underwhelming for a US firm that their website is pretty poor.

Has the govt not approached oil traders who are fairly awash with bumper cash this past few years ?

I could be very wrong but i don't think they have said NO or YES to SAVE but trying to find a better deal that gives them more interest if they could get the money and maybe up against a deadline. The govt seems pretty broke.

One thing which i think is important - we DON'T KNOW how the oil contracts, clauses etc are structured - sellers rights etc?

Perhaps the govt knows that SAVE/Petronas can complete on whatever laws/rights are in force and if the govt doesn't have that cash by a specified date then maybe a deal can be close depending on what the original contracts are ???

Either way, i would expect a mention in the next few days.

[gisjob2] 27/9/2023 15:26

MadMarky,
Even if true, which I doubt as it's obvious they want the assets for themselves, can business really be done with this Government.

[highly geared] 27/9/2023 15:11

RNS probably at 16:31pm Friday to allow us all to digest over the weekend.

Remember reading Zengas's many eloquent posts about the development potential and value of SAVE'S existing assets. Here we are 18 months on (about 12 of them in suspension) and for what?

[1madmarky] 27/9/2023 15:10

Perhaps as others have said, it is just a bargaining ploy.

[gisjob2] 27/9/2023 15:08

I hope AK says 'I'm Out'
Although this will be an abject failure on his part over the last couple of years, getting us involved in 2 of the worst countries in Africa to do business in. Any CEO can find value adding projects in these countries, they're cheap for a reason, few CEO's would dream of doing business with them.

[che7win] 27/9/2023 15:05

From the YouTube link, it looks like Caltech would get 50% of Petronas assets and the government the other 50%.

Why can we not do a similar type deal? Sure, it would not be as good for us, but it would still be worth it

[andrewsr] 27/9/2023 15:02

I think this episode just demonstrates the level of SS govt desperation to find funding in having talks with Caltech, not a rejection of SAVE.
There are simply 2 options - the Petronas preference to deal with SAVE, which must have sounded out government officials or for SS govt to find the funding to do it themselves, which seems highly unlikely. I haven't seen any govt rejection of SAVE, just their obvious preference to find $1.2bn themselves at ridiculous conditions - no payment for 5 years and then 1.5% interest?
We should find out soon enough from SAVE.

[tens machine] 27/9/2023 14:47

its over ......where is the statement from SAVE ?

laughable that SAVE negotiates with oil companies in africa however in reality the government do the negotiating with their chosen largest brown envelope ...how naive ....12 months wasted

[gisjob2] 27/9/2023 14:45

Andrew, I'm not denying that CalTech are chancers, but the Government wants the Petronas assets and obviously do not want SAVE. Considering we're at the Admission Document stage where is the Government support.

Would you advise investing hundreds of millions in a project without Government unequivocal support, especially following the renationalization of the Chad Assets ? If AK does he needs his bumps felt !

[captain james t kirk] 27/9/2023 14:32

As I said in my earlier post, I agree with your sentiments and I know it's a well worn cliche, but this is Africa and I'm afraid that double dealing comes with the territory.
I've told you I would not have entertained the deal and I hope AK (and lest we forget the BOD) hasn't been clutching at straws, in the wake of the Chad debacle.
No matter how distasteful to you and me, and I'm sure many other shareholders, it's where we are at, and frankly, want us or not, on the face of it the South Sudanese do not have any other options.

[gisjob2] 27/9/2023 14:29

I'd be concerned if they do and concerned AK would even consider it now. If he does he needs to give his head a wobble. The only small bonus is that SAVE wouldn't be operators.

[fireplace22] 27/9/2023 14:26

Governments in general are not particularly good at running resource assets, if it's not save it would have to be someone else presumably with a bigger bag of sweeties for the President. The grass is always greener, in the end they will stick with save and take the royalties.

[gisjob2] 27/9/2023 14:12

Captain,

I know what you're saying but how can SAVE continue while the Government have gone behind SAVE's back and had their head turned. Not long ago the SS Government were glad-handing with SAVE on the African Oil Conference Stage and now see the Petronas assets as something they would like to own. How much can SAVE seriously invest in a asset they're never 100% sure they'll even own in a years time should the Government renationalise a year down the road. The Government are completely untrustworthy.

It's not like they've even stated that if CalTech can't produce the money they would gladly accept SAVE as an alternative investor. It's like SAVE never existed.

If AK wants to proceed now I would suggest he's lost his marbles.

It's OVER ! It's a Dead Parrot ! It has ceased to be !

[1madmarky] 27/9/2023 14:09

Either way, we can't resume trading without issuing an AD. That needs to be signed off by the auditor (current one probably wrong), so I'm in the extension to suspension camp.

[ice31] 27/9/2023 14:06

Regardless if Caltech is a real company or not, it's very clear that the government have no interest in signing off this deal.

[captain james t kirk] 27/9/2023 14:02

I share your sentiments to an extent gisjob but I'd hardly say that "it's over" based upon the little dd I've carried out on Caltech Trading Corp (part of the Caltech Group) As I posted the other day, they are reported to have 16 employees and revenue of $6.1 million. There are two Caltech Groups to my knowledge, one operating out of Timor Leste and the other out of Canada. Neither make any reference to Caltech Trading Corp as being a subsidiary.
I'd have thought that an interest rate of 1.5% for the "loan" would have served as a red flag to the South Sudanese government, although if true perhaps AK should contact Caltech for the re financing of our debt :)
On the evidence so far, I suppose one could say that Nigeria are Africa's version of the Premier League and South Sudan play on Hackney Marshes, when they can afford it.
If it were me, I would not want to do business with these people but I do not have all the facts before me, to weigh up the risks vs the reward.
To put things into perspective, $3 billion is a lot of money, particularly for a country with a GDP of less than $8 billion and a trade deficit of nearly $6 billion.
The fat lady hasn't even started to clear her throat and dull it certainly isn't.

[ice31] 27/9/2023 13:55

Time to accept that SS is over:
hxxps://youtu.be/yD5zEcT0Cr0

[nametrade] 27/9/2023 11:51

Do you girls and boys think that even if we get the deal sorted…. The market won’t believe it for a while or at least give it a maximum discount due to the chances of things changing again soon if the government wants eventually to have control of the assets…. It’s like always waiting for the other shoe to drop….

[zengas] 27/9/2023 11:32

We do see acquisitions agreed between buyers/sellers in the west and UK where sometimes for strategic or important matters need government clearance later.

UK Gov - "The government will review your acquisition. It can either clear your acquisition, impose certain conditions, or block or unwind it" - from the national security and investment act.

It looks like in all cases the deal is made first as we see what AK and any of the other countless CEOs have and are doing - ie sign the SPA, get shareholder approval and wait for government ok. I can't see an African gov 'OK'ing a deal because they may say your own shareholders haven't even approved it yet (don't waste out time going through all the processes until you have yours in line first so to speak) - so again i feel it follows a protocol. I think Petronas used Jefferies to handle their African asset sales (from AI). You only have to look at the amount of companies vying for the Assala assets - its unlikely they all sought government clearance first. It was the selection process by the sellers advisors to reach preferred bidder status, then in agreeing the deal which then in turn goes to the government for approval which can take months or longer.

By comparrison to the West - some of these African countries have absolute miniscule GDP compared to the likes of the UK etc so you can see how a country like S.Sudan (and others) that get about 80%+ and in some cases all of it's income from oil - therefore will view them strategically and of national importance.

The danger is of course in governments borrowing to buy these assets making them more and more reliant on the oil and all their eggs in one basket come a downturn in the future.

[1madmarky] 27/9/2023 10:25

Yep, put it out there "we are ready to do the transaction, are you open for business? "

[rockyride] 27/9/2023 09:33

IZ - I had this convo with IR a few months ago and SAVE / Petronas did an inordinate a mouth of DD and relationship building with the President of SS and key ministers. Whilst (as we know these deals are fraught with risk) I don't think SAVE could have possibly done anymore before signing the SPA.However, with all the embedded corruption in Africa along with many changes of ministers, we are forever trying to shoot a very fast moving target.As we know, we have no real idea what is actually going on but if the news from this week does turn out to be a RED LINE fail for this transaction, I genuinely feel for AK and the team alsong with all the loyal shareholders invested here.One of my concerns is that SAVE have done all the heavy lifting, helping work on licence extensions, ESG strategies, workovers and future well planning etc etc etc etc and then when everything is straightened out as much as possible, some other entity comes and signs on the dotted line with Government blessing and one or two suitcases being dropped on parachutes to peoples back gardens.Should SS fail and we don't have another 'oven ready' deal, I do feel that we need to review the SAVE strategy and specifically the 'Projects that matter' bit!Anyway, let's hope we learn a reasonable amount more on Friday but I guess there is always a chance as they don't want to go too public on the real situation and we just see another extension.Finally, although I said on the other board that I'd like us to come back without the explicit Gov consent, another way of playing it could to play hard ball. I.e. say to Gov 'right we are ready to go but wont do so without your 100% backing and explicit consent'. I now think this would be the best way to go so that we dont end up in another Chad situation. Should SS not sign off and we pull out, it would send a very strong message out to the industry that SS are NOT IN FACT open for business. They probably would not give a toss but at least we would know where we stand and could crack on with come other stuff that would earn us some incremental $$$.