Savannah Petroleum Share Discussion Threads

[zengas] 04/1/2019 10:29

hm

First of all, I didn't say 'is'.

Target 250p as explained on these threads before ($11b-$17billion of risked 2.8 billion barrel recoverable oil in the ground for Niger side of business alone) - have believed in the potential since day one and have seen 100% drilling success rate so far which is highly repeatable and much of it low risk from a 6 billion+ barrel of unrisked mid case recoverable).

I see what the institutions see and all other serious types do re an investment - a company that should deliver significant capital growth and dividends as a bonus (though not why I invested re divs).

As for the current share price - it was posed before at IEC when it was 25p and someone was quizzed why they thought it should be 100p 'now' then 1250p 3 years later. Cove at 25p down to 17p - then 240p following 24 months. Patience, research etc as before.

[honestmarty] 04/1/2019 10:09

Zengas, are you seriously suggesting this is worth 250p?

How do you explain the current share price?

You seem a very serious type, what do you see that the market cannot?

[honestmarty] 04/1/2019 10:00

Hasbro popping up at 5%???

I wonder who runs their probity and DD departments?

Are they any good?

I'm starting to wonder if the fog is lifting?

[ifthecapfits] 04/1/2019 08:39

^^exactly^^ - see this all the time - where large amounts are accumulated and share price doesn't really react.

[divmad] 04/1/2019 08:30

How did they manage to pick up 40mn without disturbing the market? A nice bit of trading there.

[zengas] 04/1/2019 08:18

5% = 40.8m.

They've never been on Savps major shareholder list before of those above 3%.

[zengas] 04/1/2019 08:17

5% = 40.8m.

They've never been on Savps major shareholder list before of those above 3%.

[divmad] 04/1/2019 07:39

And another II steps up to the plate.

[bushman1] 01/1/2019 19:35

Are you still ' on the sauce ' from NYE HM:). Your posts are always good for a chuckle. Happy New Year and ' chin up :)).

[honestmarty] 01/1/2019 19:16

AK continues to deny reality.

Nigeria is sucking the gullible man dry.

He has form, Don't forget the Dista in Alaska!

The failure to secure cash flow from 7E has stopped Niger development.

Rig sitting idle, couldn't proceed with flow testing

Empty bank account?....

3 months of a falling share price before the next set of excuses


Gingenstein slouches toward Bethlehem

[honestmarty] 01/1/2019 19:10

Failure to secure the RTO is killing this one.

Sacking AK could help?

No news expected now for three months, until the next delay is announced.

Will 20p hold?

Gingenstein slouches toward Bethlehem.

[zengas] 01/1/2019 11:55

Happy new year Div and all Savp followers.

My view is, if 950m shares in issue post warrant expiry. Having a 250p target share price is about £2.375b ($3.2b) m/cap target.

Generating target $200m annual free cash flows with future visibility beyond that as production increases. Maiden $12.5m div promised.

If £500m/$650m attributed for 75% Accugas unit (balance of m/cap =£1.875b/$2.55b).

Current 185 mmboe 2P/2C.
Based on $2.90/boe farm out of Uquo x 75 mmboe and $4/b for Niger oil (company using $6/b) and 52 mmbls net currently = $425m (balance of m/cap = $2.1b).

Up to 500 mmbls discoveries at $4/b part from Niger and part from Nigeria 2C conversion to 2P to make up balance of m/cap. (If the company attain $5-$6/b that's 330 - 400 mmbls needed imo).

500 mmbls is less than 20% of mid case Niger risked 2.8 billion bls recoverable. Also known that there is circa of 1b bls recoverable risked in the Sokor alternances alone at up to 93% high COS (100% success rate so far).

Mid case is 6.9 billion bls recoverable unrisked with a risked recoverable of 2.82 billion bls. That's $11-$17 billion of 'risked' oil value in the ground at $4 - $6 per barrel. Imo we need about $2 billion of that to justify 250p target which in the pre Christmas interview was described as "a very large asset, very low risk. See a lot of growth through the drill bit and expanding that resource base out".

High case is 10.32 billion bls unrisked with 4.2 billion bls risked recoverable.

Also likely to buy stranded gas assets cheaply to run into Accugas network thus increasing valuation (from a pool of 40 TCF ie 6 billion boe of discoveries and 2C). With Accugas being the only major outlet in proximity to monetise the gas, i can see them adding a few hundred million boe at some point.

On a future 250p target and 3% dividend ie 7.5p/10c per share = $95m worth of dividends which is about 30% of a future $300m free cash or under 40% of free annual cash flow at $250m/yr.

If the warrants are exercised it will give the company significant additional cash - up to $58m. The warrants at 35p offer exceptional potential for appreciation while also benefitting from strong dividend potential - something for the institutions to ponder this month in the run up to Feb 8th.

[divmad] 31/12/2018 16:48

Sorry, $300mn MC

[divmad] 31/12/2018 16:45

A very Happy New Year to you Zengas and to all the other LTHs here.Savp's current MC is circa£300 mm. With your numbers, how likely is it that the so can ten-bag from here. £3bn MC would be something like 15 times cash flow on this numbers.

[zengas] 31/12/2018 14:46

With the CEO saying 2019 is expected to be a transformational year for the company and Malcys interview saying it was one hell of a business being built, worth reflecting on what we are actually now on the cusp off.

Imo this is the NET P2 and 2C and exploration that Savp will now have.

Uquo gas/condensate 2P = 70.6 mmboe.
Stubb Creek oil 2P = 4 mmboe.
Total 2P = 74.6 mmboe.
5 Niger discoveries = 52 mmbo moving to early production.
Uquo 2C = 9 mmboe.
Stubb Creek 2C = 49.5 mmboe.
========================
Total 2P/2C = 185 MMBOE.
========================
Uquo exploration upside = 72 mmboe.
Also some Stubb Creek reservoirs not included in the original CPR.
Niger exploration of greater than 2.5 billion bls recoverable and that's the risked number.

Going forward -
$50m Oil Trading Group drawdown facility.
$70m from Uqo farmout.
$10m/month approx (free cash flow worth $115m for 2019).
Possible total range of $235m cash availability.

Additional circa $10m free cash flow/yr for eack 1k bopd Niger EPS. (Planning to reach 5k bopd in 2019).

Other cash sources potential 2019 -
Up to $58m from warrants meaning c950m shares in issue, 5 weeks left to exercise.
Farm out a % of Niger - surely worth minimum $70m on par with Uquo.
Perhaps an additional cash pile of over $100m in the wings to the $235m above ?

In 12 months free cash flow could be running at $200m+/yr ie over $16m/month and in turn what might this buy or do ?

Would have thought on the 2019 cash flow and available cash, the company could drill a significant number of wells ($100m/worth ?). CEO did say in Q3/18 he hoped to see 2 rigs back end of the year and latest is currently operations in Niger to start mid Q1 (Mid Feb ?).

Also if a future 25-50% Niger farmout, then this also reduces the cost of a $5m Sokor Alternances well significantly and these are the lowest risk wells (ie down to circa $2.5m - $3.75m per well net).

[zengas] 31/12/2018 14:44

With the CEO saying 2019 is expected to be a transformational year for the company and Malcys interview saying it was one hell of a business being built, worth reflecting on what we are actually now on the cusp off.

Imo this is the NET P2 and 2C and exploration that Savp will now have.

Uquo gas/condensate 2P = 70.6 mmboe.
Stubb Creek oil 2P = 4 mmboe.
Total 2P = 74.6 mmboe.
5 Niger discoveries = 52 mmbo moving to early production.
Uquo 2C = 9 mmboe.
Stubb Creek 2C = 49.5 mmboe.
========================
Total 2P/2C = 185 MMBOE.
========================
Uquo exploration upside = 72 mmboe.
Also some Stubb Creek reservoirs not included in the original CPR.
Niger exploration of greater than 2.5 billion bls recoverable and that's the risked number.

Going forward -
$50m Oil Trading Group drawdown facility.
$70m from Uqo farmout.
$10m/month approx (free cash flow worth $115m for 2019).
Possible total range of $235m cash availability.

Additional circa $10m free cash flow/yr for eack 1k bopd Niger EPS. (Planning to reach 5k bopd in 2019).

Other cash sources potential 2019 -
Up to $58m from warrants meaning c950m shares in issue, 5 weeks left to exercise.
Farm out a % of Niger - surely worth minimum $70m on par with Uquo.
Perhaps an additional cash pile of over $100m in the wings to the $235m above ?

In 12 months free cash flow could be running at $200m+/yr ie over $16m/month and in turn what might this buy or do ?

Would have thought on the 2019 cash flow and available cash, the company could drill a significant number of wells ($100m/worth ?). CEO did say in Q3/18 he hoped to se 2 rigs back end of the year and latest is currently operations in Niger to start mid Q1 (Mid Feb ?).

Also if a future 25-50% Niger farmout, then this also reduces the cost of a $5m Sokor Alternances well significantly and these are the lowest risk wells (ie down to circa $2.5m - $3.75m per well net).

[alamaison5] 27/12/2018 10:53

bushman121 Dec '18 - 15:08 - 186 of 190
0 3 0
A la maison, irrespective of SAVP on their way to 89 p +. have yourself a good Christmas mate :).


AND AN HAPPY NEW YEAR, LOL
BACK TO 25p then 22p I SAID.
xxx
89p IS THAT YOUR PURCHASE PRICE?
NIGERIA COURT WILL REOPEN IN 10 DAYS TIME...

[mount teide] 26/12/2018 10:48

New Equity Research Notes from Mirabaud Securities and Hannam & Partners:


Hannam & Partners - December 21st 2018

'Further enhancing the Nigerian acquisition'

'Improving terms of the Seven Energy Transaction - SAVP has recut the terms of its proposed partnership with African Infrastructure Investment Managers (AIIM), as it looks to finalise the acquisition of Nigerian assets previously owned by Seven Energy. Savannah estimates a 67% increase in cash flow as a result over the 2019 – 2022 period. Under the new terms, Savannah will gain control of the Accugas midstream assets while also receiving US$70mm in cash, in exchange for AIIM taking a 25% stake in the Uquo upstream assets. SAVP will now have 75% of the upstream and midstream versus 100% upstream and 20% midstream in the original deal. As well as gaining a larger share of the assets, the unit cashflow generation from the midstream is higher due to lower costs/capex as well as being in a tax loss position for longer. Importantly, now all commercial terms conditions precedent have been agreed, the deal should progress to completion in Q1’19.................'




Mirabaud Securities - 21 December 2018

'Bigger piece of the pie'

Savannah Petroleum (SAVP LN) has published a positive update on the Seven Energy transaction, unveiling substantial improvements to the deal. As well as being materially cash flow and NAV accretive, the agreed changes deliver control of the gas value chain and a substantial cash injection upfront......

.....In our view, SAVP has skilfully picked over the carcass of Seven Energy, working with its partners (both local and financial) to pull together a deal that works for all stakeholders. Today’s news is highly accretive and brings the deal into its final form, clearing the path for completion early next year (the so called “Implementation Agreement” is expected to be signed in Jan with deal completion in Q1). The creation of long term value in Nigeria has much to do with structuring. Getting things right from the outset is paramount and, whilst it has taken longer than expected, we think the Seven deal in its current form is far superior to the one signed in Dec 2017.'

[divmad] 23/12/2018 21:34

Great analysis, Zengas.

A value for Niger of 180p, and a value for Nigeria of 100p.

Hmm. Still makes you wonder why go for all the effort, time delay, and debt, of those Nigerian assets with this possible end result.

[rampair] 23/12/2018 21:25

I realise in this age violence is all over. One thing in particular was the
sad news that some French drillers were killed and some people badly injured.
I checked on a map to try to ascertain
how close to our acreage it was and how it might affect a trucking operation.

I bought into SAVP after suspension and clearly it went up ....and down- although this is insignificant compared to human loss.
Will Boko Haram cause an issue to the
Project? Or will the fact that we have a large Azeri shareholder group mitigate this?
I do hold, and will continue, however now i am adding a higher risk element.

Apologies for errors and thoughts to all affected
Dyor
R.

[westmoreland lad] 23/12/2018 14:52

Nothing less than a great peace of work Zengas -- as we've come accustomed to.

Many thanks and Best festive wishes to you !

[zengas] 23/12/2018 12:50

Re Fridays RNS and the $70m cash payment to Savp ($54m + $16m) by Africa Investment Managers. It's through the sale of an interest in Uquo to AIIM and not a placing of shares to them in Savp plc which i miss read.

I was working on the basis of last Decembers deal document which would have seen circa 1145m shares in issue including warrants.

Currently 817m shares in issue.

Six and a half weeks left for 133m instituional warrants to expire at 35p exercise price.

Warrants would generate £46.5m/$58.5m (£1/$1.26) and equal 950m shares in issue some 200m less than the 1145m originally envisaged.

If bulk of those warrants not taken up would mean we are still around the 817m shares in issue.

Transaction closure would see $115m/yr this current year 2019 from Nigeria ie almost $10m month free cash flow (not counting early production scheme from Niger Q2/19).
Nigeria free cash flow to $153m/yr in 12+ months time = almost $13m/month + Niger at 4-5 X increase.
$70m of near immediate cash ($54m+$16m) re 25% Uquo sale to AIIM.
$50m draw down facility available from Geneva based funder.
$10m monthly free cash from Nigeria.

Warrants = more cash but more shares if exercised (ie upside of circa max $58.5m additional cash + 133m shares = 950m total shares).

So going forward = about $120m of cash + $10m/month ie $240m free cash over the next 12 months and surely enough to put a huge future dent in Niger drilling.

This is without any allowance of any Niger farmout, or Niger production or warrant exercise.

Given the Niger target of 2.8 billion bls risked recoverable @ $4/b in the ground, a success on under 20% of that - ie 500m bls would mean a share price target for Niger alone of 188p (817m shares) or 162p (950m shares) using an exchange rate of £1 = US$1.30. The company is using a figure of $6/barrel (I've used $4/b) so those share price targets could be 25% more at $5/b and 50% more at $6/b . Even with a farmout there is some serious headroom for success based on the 2.8 billion barrel risked number (The unrisked numbers being much higher). Also where else do you get exploration potential with 80% COS (100% so far).

The Nigeria business of both up and downstream should be worth 100p in its own right as it evolves, given the cash flow, reserves, distribution business etc and cost for any competitor to develop a similar foot print.

Previously i was using 200p combined for moderate success, so now beleive 250p is more realistic considering all of the factors above.

During these renegotiations, we've seen institutions adding (where the sales came from is anyones guess - forward selling of some minorities/parties to the transaction?). It's also one of the most heavily invested companies by a wide range of institutions. Once the transaction is concluded, hopefully the potential will transform into a future 10 bag opportunity and it's certainly got the forward cash and assets to do so as well as the promise of a $12.5m 2019 dividend, which should be even better on less shares in issue and favouable exchange rate.