Savannah Energy Share Discussion Threads

[thommie] 04/2/2024 08:52

I forgot 2024. At an estimated 80$\bbl price for 2024 at 50 000 bopd production with 50$\bbl breakeven we would look at 50 000 x 30$\bbl x 365d = 547m$ of cash flow for 2024, profit after tax should be around 50% of that number = 273m$. So a ca 23m$/month reduction of the headline price currently. That would bring us to ca 1000m$ reduction at the end of 2024. As mentioned the profit after tax for 2022/2023 could have been much better than the 700-750m for this 24 month timeframe. As the numbers in my previous post would only match if we assume a 50$\bbl breakeven price and a 90$\bbl average brent price for the 22/23 timeframe. Thats why I said very conservative, as both numbers(brent price, production), are very conservative.In a best case scenario in 22/23 it would look like: (50$\bbl breakeven, 100$/bbl brent average and 50% taxes, etc) 60 000 bopd x 50$\bbl x 365d x2 x 0,5= 1095m$ profit after tax for this 24month timeframe.The headline price is 1250m$ for the asset.So we are somewhere in between 750m$-1120m$ reduction of the headline price throughout 25months from worst to best case scenario.Meaning in the best case scenario at 80$\bbl brent in 2024 we would reach the point when we would start to get paid by petronas in the best case scenario in mid 2024 if the transaction completes then.Lets hope it does. I fear a repeat of the maari debacle at Jse when we were also counting the chicken, but the transaction got terminated in the end.

[thommie] 03/2/2024 21:39

This bit of article lining out the profit after tax in 2019-2021 at 130m$\year at an average of 53$\bbl throughout this 3 years proofs zengas calculations on the 30m$\month reduction of the headline price since the economic effective date are absolutely correct on the worst case scenario re very conservative production estimates! At 100$\bbl average price for 2022-2023 we are looking at 700-750m$ of profit after tax at 50 000 bopd production and an estimated breakeven point of 50$\bbl (giving it a premium of 20% on top of the breakeven point of 40$\bbl for 2019-2021, taking into account the rising opex for falling production since then). For every bopd on top of that in this 2 year timeframe you can add a substantial amount on top of the 700-750m$ figure. As we know that production averaged 75 000 bopd in 2021 for the petronas share there is a high possibility that this figure gets beaten.We just need to complete this transaction...

[rockyride] 03/2/2024 15:50

Unless production has dropped which has probably happened.

[1madmarky] 03/2/2024 13:21

From the energy Voice article
"Petronas has a 40% stake in Block 3/7, 30% in Block 1/2/4 and 67.9% in Block 5A. In 2019-21, the Petronas unit reported an average post-tax profit of $130.6 million"

Oil price in 2019 ~ $60
2020 ~$40

So should have been doing a fair bit better than $130 pa the last couple of years.

[andrewsr] 03/2/2024 12:28

It's curious that majors like Petronas are willing to let go of assets like this when they could presumably get the asking price from 3-4 years of free cash flow. Is it just a question of their reluctance to make further investment in these assets, i.e. they would prefer to run them down to a trickle whereas the other stakeholders don't want to do that? But then after 3-4 years they could put the free cash flow into investing in the asset after they've taken their asking price...?

[rockyride] 03/2/2024 10:09

Great to see the effective date of 1/1/22 mentioned as we have not seen that in print before. This date was mentioned to me by David Clarkson at the AGM but he did say he was not certain of it which I found very strange for a director to say - although he is definitely only a back seat passenger nowadays.

[mount teide] 02/2/2024 09:47

Perenco - The new Glencore?

Oil giant Perenco’s highly suspicious deals across Africa with companies close to corrupt African Presidents and Military Dictatorships are now under investigation in France - according to recent reports, the French authorities strongly suspect widespread bribery has been carried out by the company across Africa to secure lucrative O&G contracts from corrupt officials.


'Perenco has a pattern of alleged collusion with military forces. In some cases, these links have served to suppress and criminalise protesters fighting the company’s operations. But as its record of corporate and environmental offences demonstrates, the multinational fossil fuel company is the real criminal.....Canary Media Ltd / London


'On top of all this, when indigenous and local communities have resisted, Perenco has turned to repressive tactics. In an essay for Sur Journal, Isabela Figueroa explained how the oil company uses “coercive means to attain their goals”. Figueroa detailed how, in an agreement for community development in Ecuador, the fossil fuel firm wrote into the terms that:

The community, represented by its president and the full Commission, authorizes Perenco to use public force, impose order, and arrest any member of the community who attempts to paralyze construction of the pipeline, for whatsoever reason.
Moreover, in Ecuador, Perenco has potential ties with military forces that have violently suppressed opposition to the company’s activities.

Campaign group Acción Ecológica has suggested that Perenco has links with the military in Ecuador. In 2006, campesinos (farmers) held a demonstration against Perenco over its environmental impacts in Orellana province. Police and the military reportedly used tear gas and rubber bullets on the protesters. Additionally, the military arbitrarily detained Wilman Jiménez Salazar – a member of the Orellana Human Rights Committee – for 17 days.

Criminal connections:

However, repressive state military forces are not the only armed groups Perenco has purportedly collaborated with. In 2012, a Colombian newspaper accused Perenco of funding Colombian paramilitary groups. In a series of court hearings, members of the right-wing paramilitary umbrella organisation Autodefensas Unidas de Colombia (AUC) detailed the company’s connection to their illicit activities.

Moreover, the members explained how the fossil fuel corporation had financed them. In the early 2000s, Perenco allegedly contributed hundreds of thousands of pounds to far-right groups. In one instance, they claimed that the company had even provided a van for the counter-guerilla forces to transport their remittances.

The paramilitary coalition murdered thousands of civilians between 1997 and 2008. These included farmers, indigenous and leftist leaders, and unionists. The AUC’s violent kidnappings, drug trafficking and extortion also displaced millions of people from their communities. However, while some multinationals have faced trial for their links to these forces, there is no indication that Perenco has been held to account for its role.

Meanwhile, in Venezuela, Perenco was named as a partner in the state oil company’s billion-dollar money laundering and embezzlement scheme. Again, Perenco has yet to face accountability for its involvement.

Nevertheless, some communities in the Global South are a step closer to bringing the company to justice for its illegal actions. On the same day Perenco estimated that they had recovered 60% of the oil spill in Poole Harbour, French corruption police raided the company’s Parisian offices. They were searching for incriminating documents on the company’s operations across Africa. These will hopefully detail information on the firm’s bribery of officials in the African countries in which Perenco operates. According to the report by Challenges, France’s National Financial Prosecutor’s Office (PNF) has opened several preliminary investigations into the company’s suspected corruption abroad. '

AIMHO/DYOR

[upwego] 02/2/2024 07:13

Looking like we have been trying to get approval for some time and may well take some more time even a significant amount of time more.. will just have to wait it out.

Hope it`s worth it and we get it if not it will be another significant amount of time lost, but it`s a big asset and a company maker so I can see AK is trying to do the right thing. 5000bopd asset or 50,000bopd is probably going to take the same amount of time for approval in Africa which is always slow.

The major problem is, the brown envelopes, we know they like them for there personal wealth and lifestyle.
Perenco might come in and cause trouble too, who knows back to the waiting table.

[1madmarky] 02/2/2024 05:44

Note that this will probably be some sort of partnership whereby SS get an increased share. Offset by a desire to increase production. However this works out the SS government will need to be able to show it as a great deal for the people of SS.

[mount teide] 01/2/2024 09:19

RNS - to have granted a further 2 month extension of suspension, AIM and the NOMAD would need to have been provided with evidence of further material progress, sufficient to convince them the Savannah management still has a good chance of completing the deal.

Considering the deal has an effective economic date of 1st Jan 2022 - that means for an expected completion date during Q2/2024, SAVE will have accrued a massive 2.25-2.50 years of production earnings credit at an average of $91.71/bbl Brent, to take off the $1.25bn headline price.

Suggesting the debt required to finance the deal is now likely to be a very small fraction of the $1.25bn headline price.....thereby offering the prospect of the actual sum due on completion potentially being able to be financed without the need for a loan.

Picking up a 55,000 bopd asset with a long reserve life for loose change - now there's a thought worth raising a glass to!

[jnbrw] 01/2/2024 09:17

A further extension is obviously a little bit frustrating but probably most would agree from the messaging today ( both RNS and the broker note) the statistical probability of the SS transaction completing is continuing to improve/ increase. That is what I am taking away from this.

[scottishfield] 01/2/2024 08:52

Well that's positive, good.

[interzone] 01/2/2024 08:51

Shore Capital Note (- c/o TiL on LSE)

Savannah Energy+ (SAVE, Suspended, Under Review)

South Sudan acquisition update

In a short RNS this morning, Savannah has confirmed that (further to its prior announcements) the company continues to advance the various workstreams – including the receipt of relevant approvals in-country – required to complete the acquisition of PETRONAS International’s South Sudanese portfolio.

Regarding this major proposed reverse takeover transaction, Savannah reports today that AIM has granted a further extension to 2 April, with subsequent updates to be provided as and when appropriate.

Given the further eight-week extension that has now been secured, regarding this obviously significant transaction, we believe that publication of the related AIM admission document can be very realistically expected within this newly updated timetable – and will look forward to further news in due course.

Whilst acknowledging that publication of the admission document (relating to the South Sudanese reverse takeover deal) had originally been expected to occur at an earlier stage, we continue to sense that Savannah is pressing on to ensure that this can occur as soon as possible – noting AIM’s granting of the further extension announced today.

We will obviously continue to look forward to admission document publication, at which point we will be in a position to fully assess the incoming South Sudanese assets. Whilst the shares will naturally remain suspended ahead of this, we continue to forecast material organic revenues and cash flow in the meantime. Our last-published Risked NAV estimate stands at 45p/share.

[1madmarky] 01/2/2024 08:30

Progressed not processed

[1madmarky] 01/2/2024 08:15

If it had not processed, I don't think they would have got an extension. Otherwise half the companies on AIM would be suspended while they try to mitigate bad news. Thus avoiding a share price drop.

[gisjob2] 01/2/2024 07:39

Not another extension, sounds like it's nowhere near completion to me. Good luck to them getting government agreement. What a nightmare.

[soggy] 01/2/2024 07:24

Forgive me for being a bit thick here..."an extension TO 1st February..."? Don't they mean ON, or FROM?Mr. Confused

[upwego] 01/2/2024 07:18

WHY NO AD DOC!! ffs!

[1madmarky] 01/2/2024 07:08

It could have been the 1st of April! :-)

[tinker10] 01/2/2024 07:05

Boring!

Take a look at PRD while we wait

[che7win] 01/2/2024 07:03

Zzz, sounds like they're nowhere near finished and don't have a clue on dates.

[otemple3] 31/1/2024 18:06

May still get an RNS today, the deal updates are often past 6pm ? but tomorrow after 6 more likely!!!

[gisjob2] 31/1/2024 17:59

Looks like yet another extension.

[tens machine] 31/1/2024 17:41

Well it looks like it's going to the wire