Savannah Energy Plc

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Share Name Share Symbol Market Type Share ISIN Share Description
Savannah Energy Plc LSE:SAVE London Ordinary Share GB00BP41S218 ORD GBP0.001
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 26.25 0.00 01:00:00
Bid Price Offer Price High Price Low Price Open Price
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Drilling Oil And Gas Wells 185.80 0.77 0.10 - 342.85
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 26.25 GBX

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28/3/202216:12Looks like zengas was wrong-

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Posted at 23/5/2023 22:18 by sunbed44
I am a massive fan of SAVE and it's my largest holding by a stretch. I'm just way too heavy in the stock and need to balance my PF. There are quite a few excellent O&G stocks to get in to / add to. However I still think that in % terms 5 years from now, SAVE will definitely be in the top quartile of all O&G stocks currently listed on AIM. Although I like AXL a lot and am adding when I can, I feel certain that SAVE will get to 90p before AXL gets to 109p. But to be honest, if either of them hit the share price numbers I mention, a grand is neither here or there.
Posted at 18/5/2023 09:56 by sunbed44
B1 / good morning. Unfortunately I do not have the depth of knowledge to even try and calculate a number for the returning share price that would carry any credibility. Any numbers I quote for returning share price would be my best guess, finger in the air, hope for -aspiration and all that good stuff. And even if I did know all this stuff a lot better, we don't know what production, debt and reserves will look like. We don't even know if any more shares will be issued as part of what is going on or any potential new stuff that has not been announced yet. I'd like to think that the current stuff (SS) would still follow guidance to be acquired with cash and debt. However, as we are almost certainly not seeing the production revenue for Chad Doba oil we can never know how SS is now being financed. What's more, even if we had the definitive numbers for everything, we do not know what discount the any accurate share price calculation that the market will apply for the ICC case going on in Paris or the war in Sudan. So even for the most learned people on these boards to come up with an accurate returning share price is completely impossible although their numbers would carry a lot of credibility based on their knowledge of this lot and their mathematical skills. So from what I've said it's clear I have no idea.But to put a few words around my thoughts, I'd like to come think that we will come back higher than suspended price and hopefully a decent % higher. Im my mind I've said that worst case for me would be 26.35p (suspended price) which keeps me in a very healthy profit. I have lots of transactions here on multiple accounts and not all were done in my name - although a lot are. I am working on an my average being around 18p which I believe to be pretty accurate. From what I've read from the maths and knowledge guys, I'd like to think that EOY production would be 30k Nigeria + 50k (minimum) for SS giving 80k. Fully diluted shares 1.4bn (1.316bn ATM I think) and debt of $900m =/- $200m. If this were the case I'd like to think of around 100p as a very top headline figure but then discounted for all the risk in our asset base. All that given, /I'd be over the moon if we returned at 50p to 60p. But after that I still see a lot of quite quick progress with minimum of 5k added from Niger before end of 2024 and hopefully maybe even 10k to 20k. We would quite quickly see 33m 2C change to 2P in Niger when pipeline opens and we have a route to market. Then I'd also hope we have a large new drilling program ready to go in ?Niger to add to our 100% strike rate with 5 from 5. Who knows about future inorganic growth buying distressed / divestment production from majors. I think we are pretty much nailed on for more and quite a lot more. After the end of 2024 we should be getting quite close to first power renewables in my opinion - AK won't hang around with these projects and will want to beat all guidanance by a chunk, subject of course to the speed of working and regulation sign off in the incumbent countries. We have 525MW of projects currently under way 450MW in Niger and 75MW in Cameroon. We will for certain surpass the very snazzy dial on Twitter to surpass 1GW by end of year with a big number coming quite soon in SS. With 310GW of renewables to chase in Africa, I think 1GW is only the start. And I guess my final shot on this would be that SAVE could quite possibly be the largest company delivering power by the end of the decade. Having said that, all the risk that we carry, that has come to fruition in Africa has made me realise that I pesonallly carry far too much risk here in one single company. So whatever the share price comes back with, I'll be reducing by a number over the first month or two in order to smooth out my transactions on what I expect to be a quite a volatile share price HOPING THAT WE DONT VERY QUICKLY GO IN TO ANOTHER RTO AND MANDATORY SUSPENSION. Just a few thoughts here but not sure if it helps you or totally baffles you - LOL
Posted at 01/5/2023 15:05 by zengas
Re should or shouldn't SAVE walk away from the S.Sudan deal.

That depends how you look at it.

First of all i believe any deal has to be non recourse to the parent group/other asset holdings just like Chad, Cameroon and Accugas Nigeria. Therefore i don't see it as putting the group at risk and no one would be that reckless least of all AK without ring-fenced financing.

If anyone is likely to pull the deal it could be the actual entity that is/was there to finance it and not so much Save.

It could be Petronas themselves who finance it - do or will they offer a financing agreement like Exxon and on what terms. They may be even keener to leave more than ever now especially as they also operate in Sudan where their complex/office in Sudan has been damaged in recent days with people unable to leave.

Any opportunist will see the potential in S.Sudan. Perenco themselves were reported as interested. Things continue as normal so far and the main worry is going to be relying on one export route - so yes i see now as the time for S.Sudan to address and develop an alternative route faster than ever. They have land bought at Djibouti for this purpose.

Can any deal be structured in a way that Save can continue say if oil exports were offline for 3-6-12 months at any point ? and it might not happen - totally unknown but i'm sure that risk has been considered.

AI reports Save will predominantly only be a partner in S.Sudan - they won't have too many to pay as they need little staff, it all comes down to the loan financing and perhaps length of it. Seplat managed to survive in a one country jurisdiction with its oil exports severely constrained for a number of times over many months while alternatives were found and the original export route re-instated.

What about the breaking story back on 18/1/22 when AI reported that it was a grand plan by the Vitol - Savannah duo for S.Sudan. Vitol is awash with serious cash and more so this past few years of high oil prices, and somebody like them could be more than willing to see this through with Save as they gain access to marketing the oil.

I may be wrong but to leave S.Sudan high and dry because of what's going on with it's neighbour would be a big blow for the South Sudanese (not their fault) and anyone thinking of investing in S.Sudan pre June if the Savannah Petronas deal collapsed - so again i'd be surprised if Save decided to pull the deal on neighbouring instability. Yes they could delay it or suspend it but i think that would open the deal to other potential buyers.

I do not want to see the deal collapse and i don't think Save will either but it will be more so in the hands of the right financing terms relative to the above.

Posted at 27/4/2023 15:18 by interzone
And again - Shore Capital Assessment

We have revised our FY23F forecasts for Savannah, estimating revenues, profitability, cash flows and net debt for the existing business - post-Chad nationalisation and the agreed disposal of a 10% interest in COTCo, but pre-South Sudan reverse takeover deal. This exercise is intended to quantify the base business underpinning the forthcoming TO. We will account for South Sudan, which has the potential to be particularly material, and roll forward to FY24F, once the forthcoming AIM Admission Document has been published. In the meantime, notwithstanding the recent Chad expropriation, we continue to forecast material organic revenues, profits and cash flow - along with very manageable gearing levels.
Chad expropriation not the end of the world: Whilst the Chad nationalisation is unfortunate, we take this in the context of a modest completion amount, the retention of the Cameroon portion of the pipeline, an equitable deal to sell 10% of COTCo and a strong Nigerian performance. Whilst we expect the (largely non-recourse) Exxon facility to remain on Savannah's balance sheet, the amounts involved are smaller than we initially assumed and should be able to be repaid within the facility's two-year tenor, noting the anticipated receipt of c.US$45m of COTCo disposal proceeds.
Risked NAV reduces to 45p/share: We had previously believed that the Chad-Cam acquisition was, in aggregate, a highly accretive deal and the reduction in our Risked NAV estimate to 45p/share should therefore make sense (we had estimated 35p/share before Chad-Cam was announced in FY21A and 80p/share subsequently). However, with the shares having traded at 26p/share immediately pre-suspension in December, the market was apparently factoring in significant execution risks for the Chad-Cam deal and we continue to see very material upside
Revised forecasts. With the PETRONAS portion of the Chad-Cam deal having previously fallen away, Chad since nationalised, and agreement reached to sell 10% of COTCo (which is now deconsolidated in the group income statement), comparing "apples with apples" isn't straightforward. In simple terms, however, our FY23F adj. EPS estimate reduces to 4.5c/share (>12c/share previously - based on the terms of the Chad-Cam deal as originally envisaged). We continue to expect rapid de-gearing and forecast a closing net debt/EBITDA ratio of <1x in FY23F.
Savannah remains a strong platform for growth: Despite the downgrade to our FY23F numbers, forecast earnings are still very material with reference to the last-traded share price, implying an undemanding PE ratio of c.7x. We also highlight the fact that Savannah trades (pre-suspension) on an FY23F EV/FFO ratio of under 4x and provides a c.35% FCF yield - reinforcing our conviction that this remains a solid and attractively-valued platform for further growth. We continue to look forward to publication of the Admission Document relating to South Sudan by the end of june

Key points from recent first quarter update
Earlier this month, Savannah released a financial and operational update for Q1 2023, which was very much in line with our existing understanding and expectations. Unaudited financial highlights in the quarter included total revenues of c.US$148m (including Chad upstream) and closing debt of c.US$412m. Operational highlights included average gross daily production (excl 2
Chad) of c.26mboepd on a like-for-like basis - which represented a material 20% year-on-year increase and continued to be dominated by production from the Uquo gas field in Nigeria
First quarter throughput for the Cameroon section of the Chad-Cameroon pipeline averaged
c. 129mbopd (much as we expected), with 11 liftings having been undertaken via the Kome Kribi-1 floating storage and offloading (FSO) unit. Similarly in line with our latest understanding, Savannah confirmed that its current c.41% ownership interest in the Chad-Cam energy transmission system (ETS) will be treated as an investment in an associate for accounting purposes.
At R3 East in Niger, a well test programme is scheduled for the fourth quarter of this year, ahead of first oil which is now targeted for FY24F. Operator CNPC's new Niger-Benin export pipeline is expected to be fully operational by the end of this year and significant progress was also reported at the Parc Eolien de la Tarka wind farm project (where project sanction is expected next year).
In addition, Savannah reported that it was expecting to announce a series of new utility-scale renewables projects over the coming months, and has since confirmed (on 20 April 2023) that it has signed a memorandum of agreement (MOA) with the Cameroon government for the development of the 75MW Bini a Warak hydroelectric project in the north of the country. Savannah intends to take over development of Bini a Warak on an independent power producer (IPP) basis, ahead of anticipated project sanction in FY24F and targeted first power by FY28F.
In Nigeria, a major compression project for the Uquo central processing facility is being actively progressed to maintain and grow gas production over the coming years, with Savannah having sold gas to seven customers in Q1. As previously announced, Savannah has now commenced ICC arbitral proceedings to seek full compensation for the recent nationalisation of its upstream and midstream assets in Chad, with publication of an AIM Admission Document relating to the South Sudanese reverse takeover (RTO) deal continuing to be anticipated in the first half of this year.

Summarising the situation in Chad
Following Savannah's announcement (on 24 March 2023) noting the presidential decree nationalising its upstream assets in Chad, the most recent material news on the situation came with an announcement by the Chad government that the country had "nationalised the oil assets of Esso Exploration and Production Chad Inc and Esso Pipeline Investments Limited". The nationalisation, therefore, covers the portion of the pipeline running across Chadian territory (in addition to the upstream assets) and means that Savannah's Chad interests have now been entirely nationalised.
We did, however, highlight at the time that the Chad portion is by far the shortest of the two sections of pipeline and therefore only generates a relatively small proportion of total midstream revenues from the Chad-Cameroon energy transmission system. Conversely, our model continues to indicate that the Cameroon portion of the pipeline generates the vast majority of revenues and (to an even greater extent) profits from the ETS. Following the loss of a material producing asset, and now the Chad portion of the pipeline, we continue to believe that ICC arbitration provides scope for a substantial settlement in Savannah's favour in due course

Looking forward to South Sudan
On 12 December 2022, Savannah confirmed that it had entered into a sale and purchase agreement with PETRONAS to buy the latter's entire oil and gas business in South Sudan through the acquisition of a relevant subsidiary. The total cash consideration is up to US$1.25b (subject to completion adjustments and with the transaction also subject to conditions precedent such as shareholder and South Sudanese government approval). This would therefore be Savannah's largest acquisition to date and is expected to be funded with existing cash and new debt.
Completion of the transaction would result in Savannah acquiring PETRONAS's interests in operating companies which operate three South Sudanese blocks (with working interests rangiry from 30% to c.68%). The PETRONAS assets include interests in 64 producing fields, which came onstream in 1999. Aggregate production in FY21A averaged just over 153,000bod (gross), with major partners in the joint operating companies including CNPC, Sinopec, ONGC and South Sudanese national oil company Nilepet. The relevant PETRONAS subsidiary reported average annual audited net profit exceeding US$130m across the three years ended 31 December 2021 - clearly very substantial with reference to Savannah's existing group profitability.
As the proposed transaction in South Sudan constitutes an RTO, the shares remain suspended pending publication of an AIM Admission Document (or confirmation that the transaction has been terminated). Savannah continues to expect publication of the Admission Document in H1 2023 and, in the meantime, details of the proposed deal remain limited. We eagerly look forward to absorbing the full details when these become available, anticipating publication of the AIM Admissior Document (and therefore lifting of the shares' suspension) before the end of June 2023.

The situation in neighbouring Sudan
As widely reported, the security situation in neighbouring Sudan has significantly deteriorated as conflict between rival military groups has broken out in Khartoum and other urban areas. South Sudan transports its oil production for export via a pipeline passing through its northern neighbour (to the Red Sea via Khartoum). However, due to the payment of valuable transit fees to Sudan, our understanding is that both sides in the conflict will be keen to ensure the pipeline's security, with South Sudan's oil minister having reported that relevant infrastructure remains well protected and its President also engaged with the rival leaders across the border.
With pipeline throughput reported to be continuing uninterrupted and a temporary ceasefire appearing to be holding at the time of writing, we will nonetheless continue to monitor the situation in Sudan is it evolves, given its relevance to ongoing pipeline security.

Sale of 10% interest in Cameroon section of Chad-Cam ETS
On 20 April 2023, Savannah announced that it had signed an agreement with Cameroon national oil company SNH to sell to SH 10% of COTCo (through which Savannah holds its c.41% operated interest in the >900km Cameroon section of the Chad-Cam pipeline and associated infrastructure).
The cash consideration payable by SH to Savannah under the terms of the deal is US$44.9m, with the company stating that the proceeds will be used to partly repay its existing debt facilities. More specifically, we believe that Savannah is likely to prioritise repayment of the up to US$170m Exxon prepayment facility following the receipt of the COTCo disposal proceeds.
Completion will result in Savannah's ownership interest in COTCo reducing to 31.06% (from 41.06%), is subject to the satisfaction of certain conditions precedent and is expected to occur in the second half of this year. Prior to formal completion and payment of the consideration, Savannah will retain the dividend entitlement attaching to its existing c.41% ownership interest.
We believe that this is a very neat deal for Savannah - being undertaken on equitable terms with SNH, generating cash proceeds which will go a long way to offsetting the final completion amount (associated with the company's broader Chad-Cam acquisition) and facilitating a further material reduction in closing FY23F net debt. In addition, we believe that it should reinforce Savannah and SNH's alignment of interests as partners in this section of the Chad-Cam ETS. The impact on FY23F earnings is not material, given the fact that completion is not expected to occur until later this year, and the offsetting effect of lower net debt and therefore interest costs.

Appointment of NED and Chair Designate
On 21 April 2023, Savannah announced the appointment of Joseph Pago Noupoué as a Non-Executive Director and Chair Designate, with immediate effect. As previously announced, Steve Jenkins plans to step down from his role as Non-Executive Chair at the close of the next AGM, having completed over eight years in the role, but will continue to serve as a Non-Executive Director of the company. Mr Noupoué is a qualified lawyer and a senior partner at EY, currently appointed as EY Managing Partner for Cameroon and Tax Leader for French-speaking Africa. He has very considerable African experience, including in the energy sector, and we congratulate him on his appointment. In conjunction with this, Mr Noupoué has subscribed for new shares in the company, equating to a total investment of c.US$2m at a 26.25p/share issue price.

Model update
We have revised our income statement and cash flow forecasts (see Fig. 2 and Fig. 3) through
FY23F, accounting for termination of the PETRONAS portion of the Chad-Cameroon acquisition, subsequent nationalisation of Savannah's Chad assets in late March 2023 and the agreement to sell 10% of COTCo. We now estimate FY23F total revenues of US$362m, approximately two-thirds less than our prior estimate (US$1,081m). However, this isn't quite comparing "apples with apples" as revenues from the Chad-Cameroon pipeline are no longer consolidated in our model, which now assumes c.US$28m of associate income from the Cameroon section of the pipeline in FY23F.
Having made a contribution from deal completion in December 2022 through to nationalisation in March 2023, Savannah's upstream and midstream assets in Chad will obviously fall away completely in FY24F, when its average interest in COTCo will reduce to c.31% (post-disposal to SNH. However, the company is targeting first oil from Niger next year and we also have the proposed South Sudanese acquisition to look forward to - we would naturally expect this major transaction to have a significant impact on Savannah's income statement and balance sheet following the formal completion of any deal, and will therefore be waiting for publication of the forthcoming AIM Admission Document before introducing FY24F forecasts for the enlarged group
Notwithstanding associate income, operational and financial gearing in the business means that we still expect FY23F adj. net attributable profit, adj. EPS and funds flow from operations to fall by c.65% compared to our prior forecasts (to US$64m, 4.5c and US$227m, respectively). Our FY23F free cash flow forecast falls less (by .50%), due to our reduced capex assumption for this year.
Noting developments including the proposed South Sudanese reverse takeover and recent Chad nationalisation, we no longer assume payment of a dividend during our forecast period. We do, however, acknowledge that the board has yet to make any decision on this (following previous indications of the company's intention to distribute c.US$10m in the first half of FY23F).
The headline acquisition price for Chad-Cameroon was US$407m, although we estimate that the final completion amount was actually less than US$100m due to the presence of effective date and completion adjustments. Assuming that Savannah drew down an amount approaching the maximum US$170m under the Exxon facility, this would imply that a significant proportion (i.€
›US$70m) of the drawn facility continues to sit as cash on Savannah's balance sheet. This would seem consistent with the US$217m of reported gross cash held at the end of March 2023, which is meaningfully higher than cash balances at the end of December 2021 and June 2022.
We estimate closing FY22F net debt of c.US$440m, which we believe is consistent with the US$412m reported as at the end of March 2023

We estimate closing FY22F net debt of c.US$440m, which we believe is consistent with the US$412m reported as at the end of March 2023 (given forecast free cash flow for the year). We expect ongoing cash generation and COTCo disposal proceeds to facilitate a further reduction in net debt to c.US$260m by the end of FY23F (equivalent to a net debt /TTM adi. EBITDA ratio of 0.9x)
Although we expect the Exxon prepayment facility to remain on Savannah's balance sheet as a residual liability, overall gearing should therefore remain very manageable. Following the recent announcement that Savannah will sell 10% of COTCo, and with the company already retaining sIgnIficant cash balances, we are also contident that the Exxon facility can be fully repaid over its original two-year tenor and that Exxon is fully aligned with Savannah as ICC arbitration progresses

Risked NAV of 45p/share
We have revisited our Risked NAV estimate (see Fig. 1), which reduces from 80p/share to 45p/share. Intuitively, we believe that this is consistent with Savannah's reduced earnings power post-Chad, and the 35p/share that we had been estimating prior to announcement of the Chad-Cam deal in FY21A (noting that the Cameroon portion of the pipeline has been retained). In addition, our revised Risked NAV estimate would place Savannah on an FY23F EV/FFO ratio of 5x, which feels about right to us.
Key changes reflect the loss of Chad upstream and midstream, Savannah's lower ownership interest in the Cameroon section of the pipeline, the value implied to this by the agreed disposal of 10% of COTCo and reported net debt. Whilst acknowledging the potential recognition and enforceability issues associated with any arbitration award, we also include 6p/share (risked) to reflect the possibility of a substantial settlement in Savannah's favour in due course.
As with our financial forecasts, we would expect South Sudan to have a material impact on our valuation following forthcoming publication of the AIM Admission Document. In the meantime, and given the shares' ongoing suspension, our longstanding Buy recommendation remains under review. Our detailed financial models are available to institutional clients upon request.

Posted at 14/4/2023 15:07 by zengas

On 3/4/23 - "The EV for Kosmos is some £4.5b (550 mmboe 2P/63.6K boepd).
Tullow EV £2.07b (230 mmboe 2P/60k boepd)."

On successful closure of S.Sudan, i beleive from all the available sources Save will have circa 400 mmboe and a 75-85k boepd production range.

Their net debt by this yr/e (in 8 months) i estimate at $1.2b (£1/$1.25) ie £960m.

If you apply the same EV to Save as Tullow of £2b you get £1.05b for m/cap or 80p on the current shares in issue or 76p fully diluted with the warrants excercised.

Tullow is servicing $1.9b net debt - Save servicing $1.2b from higher production and an income dividend from Cameroon. Save 2P, a minimum of 50% higher.

Fair value i believe is more likely 100p+ or 25% higher relative to TLW on above.

TLW is already bombed out on it's delivery and number of issues to date re debt, raising production and failed merger/take-over.

Elimination of Saves $1.2b/£960m estimated net debt via cash build/used for renewables build out is worth 73p (70p f/diluted). So perhaps worth 20p per year on a 3.5 year basis. That in turn excludes the value of what the renewables are worth when up and running as a long life revenue generating asset.

As i said yesterday, nothing to get excited about on the average 8 mmbls discovery/well from the very low risk sokor alternances but when they start an effective drilling programme and the wells mount up - 25 wells could soon see close to 200 mmbls reserves added. Notwithstanding they want to drill deeper in 3 of the discoveries while there exists a possibility that Amdigh alone could be up to 100 mmbls depending on communication in a number of further areas. Regardless i'll be happy with a steady average 8 mmbls per discovery well.

Using $4/barrel is $800m or 50p to the share price. Call me overly optimistic but i'm using substantially less than FinnCaps $5.60-$6.20 per barrel price they gave on the 27/3/23 for Niger.

£1 on the Tullow comparrison is/should be fair value, 73p net debt reduction/conversion into renewables, 50p on a 200 mmbls add from Niger is giving 220p+ to grow into.

So for me all roads still lead to 200p - and of which i may add would be 60% of KOS EV which in the next 12-24 months is on course for 90k boepd.

Posted at 13/4/2023 16:33 by zengas
All along i've thought it's all well and good saying Save should have drilled significantly to prove up major Niger reserves but they didn't bring on a partner as hoped for or maybe couldn't find one.

Save were expecting a Niger export pipeline in 2019 to materialise but at least this year it will be completed almost 5 years after their last discovery in October 2018.
Tullow discovered oil in Kenya in 2012 and have 170 mmbo 2C net. 11 years later and still no pipeline built to produce and exit the oil. Could easily have been Save in that position 9+ years later but with no other asset.

In addition there's been no buyer for Tullows Kenyan interest so the acquisition route for Save seeking major assets at a much steeper discount to those made by Kosmos and Tullow in the past looks the more logical and cheaper route imo to building a company of equal/greater size at a lesser net debt profile for Save which they started 4 years ago with Nigeria.

As per my last post showing $2b revenue potential fronm S.Sudan/Cameroon & Nigeria - Niger on 5k bopd will add barely 7% ($135m) to that revenue potential and another year away.

With the Niger pipeline continuing to expand to over 200k bopd+ and Niger expecting to reach 500k+ bopd production this decade, Save can build on its reserves and production to match that expansion with little worry that the assets wouldn't be significantly monetised and attract buyers as well.

Lets say we had done damn all else and sat with 275m shares in issue after the $40m (38p) placing in 2016 to recommence operations in Niger.

We would have needed some more cash along the way but lets say we were at 325m shares in issue. We drilled 5 wells and booked 33 mmbo 2C and need $58m to reach 5k bopd before first income next year.

I posted on the AET thread (637) on 3/4/23 Panoro m/cap £233m, net debt $46.8m, 2P 35.8 mmbo, production 7k bopd.

If you draw that comparrison to Save - then on 325m shares at a similar net debt and a m/cap of £233m would equal about 70p share price but still 9 months away from any production and likey to be half of Panoros to start - so maybe 70p is generous for Save if that's the route they'd gone and waited it out rather than acquisitions at deep discounts and significant revenue as a result plus the market ups and downs/covid etc in the intervening years and keeping the lights on.

Posted at 11/4/2023 06:34 by bushman1
Africa 02 April. An article by James Gavin advises SAVE's bid " expected to move ahead as planned. " completing H1 as we know from SAVE Also mentions SAVE will be receiving revenues from Chad Cameron pipeline which ". is not affected by recent news ". Estimated SAVE Share price on re listing June 2023. ? Nigeria assets continue to perform strongly Revenue from CC pipeline.SS deal completes. Please DYOR.
Posted at 04/4/2023 22:44 by thommie
@zengasI would be a little disappointed, if the asset price would only be reduced by 300m at the expected RTO closing in mid 2023.The first article from AI I remember that highlighted that petronas intended to sell its south sudan assets was in spring 2022. I also remember rumours outside of AI in december 2021 after save announced the intention to buy their chad stake that they were also interested in buying the south sudan stake. So Im sure talks will have started around end 2021 or early 2022. So maybe the effective date might be around that time. So around 18 months to expected closing (and ofc it will take longer, as usual...).Even if we take a conservative approach the effective date should be at least around mid 2022. That would account to at least 12 months of production. We know from your research (btw thx again for your contributions!) that in 2022 the net production to petronas was 59 000 bopd. If werden take into account there usual decline rates without investment the average production from mid 22-23 should be around 55 000 bopd. The average oil price should have been around 90$/bbl. So we are speaking about 90$x55 000 bopd x 365d= 1800m$ of revenue for this timeframe. If the effective date would be 1.1.2022 that numbers becomes even more unbelievable, as it would add around 60 000 bopd for another 6 months at average oil prices of over 100$\bbl. (90$x60 000bopd x 182d=1100m$)So I would guess that after all costs and capex a revenue between 1800 - 2900m$ should generate more than 300m$ of free cash flow that would reduce the asset price considerably.If we compare it with the chad exxon deal that reduced the asset price from 407m$ to at least 170m$ at closing 23months after the effective date your assumptions might look correct, but that misses the fact that save expected to repay this 170m$ prepayment facility from Exxon in just 3-6 months after closing of the transaction. Thats a strong indicator, that the exxon stake was in a material underlift position at closing, or that much of the money was already held in the Esso foundation they aquired at closing and was just not paid back yet. Because why would save be able to generate 170m$ in 3-6 months at 80-90$\bbl brent when they were only able to reduce the asset price by 237m$ in the former 23 months with materially higher brent prices?!We know save lifted mid february, if they were in an underlift position before that might have changed in february. Anyone knows how big the usual doba cargoes at kribi are?
Posted at 03/4/2023 14:48 by zengas
Sunbed have you thought if we do land South Sudan or something on that depth and scale.

We should get an expected cost reduction backdated to whatever date is used at signing.

$1250m for i believe roughly 50-60,000 bopd and perhaps 300 mmbo 2P if the figures in a number of publications are ball park correct.

Likely $1.27b - $1.5b revenue at $70/b oil (not counting Accugas $270m+ or $80m pipeline).

Perhaps the S.S closing price comes down to $950m at completion. It should continue to reduce the debt under it's own steam next 24 months or so but regardless and this is my main point, think of how Accugas is really performing because however much it seems unexciting to the share price, imo its all about the underlying value and why i see Accugas as so important as to how it continues to perform.

In 24 months Accugas/Nigeria is likely net debt free. Save has it running at near capacity.

In view of what they paid for it, also the original capital of over $1b to build the infrastructure etc and production ramped up from some 13k boepd (when Save entered the deal for it) to over 30k boepd now. Not to mention reserves increased and imo will continue to do that from the large resource base - what price is it now worth in a sale or how far beyond the next 2 years can it be grown ?

On the basis that we do complete on S.Sudan, imo if Accugas + Gas reserves were sold, Save i beleive would be entirely debt free yet have 300 mmbo reserves, be a 50-60k bopd producer and throwing off well in excess of $50m divs if it did nothing else, but obviously Niger expected to deliver on significant reserves and some degree of production.

The EV for Kosmos is some £4.5b (550 mmboe 2P/63.6K boepd). Tullow EV £2.07b (230 mmboe 2P/60k boepd).

Imo Save without Accugas, debt free as a result and on 50-60k production, 300 mmboe 2P would no doubt be worth some £2b and 150p. Also has more free cash due to no debt service.

So unless they make a complete hash of Accugas and fail to land a very significant divestment asset out of many available, i continue to see 26p as way too cheap on all counts.

Posted at 24/3/2023 09:17 by thommie
Im with Mt. It looks to me like a last blow to frighten save knowing this transaction is legally watertight. But as save already stated in the rns, they will go on using all legal rights they have to fight the illegal actions taken by the junta.There are 2 main problems for the junta still and I think they are aware of them. Otherwise they wouldnt have waited 3 months trying to nationalise the asset.1.they cant nationalise the cameroon part of the pipeline which could lead to the asset getting stranded. Nothing they could cope with, as it would lead to zero money coming into their bags. 2.the loadings of crude happen in cameroon at the kribi fpso. I dont see how they would be able to sell the oil to pirates, etc... All of the money will be going through international systems. That means if save gets a ruling that favors them by the ICC International rights will grant that the money that is owed to save will be confiscated inside the international system...As already lined out, the financial risk for save will be zero here, as the production of the last 3 months since closing of the aquisition will have easily been paid off the 36m$ save responsibilty of the 170m Exxon prepayment facility.It's all about getting additional benefits. From 9th december to date there have been 1,25m bbls been produced net to saves share. At 85$\bbl brent price this leads to 105m$ of revenue alone. After costs and capex that will have easily been taken care of 36m$ of the prepayment facility.
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