Savannah Petroleum Share Discussion Threads

[lithological heterogeneities] 24/7/2017 17:43

Nigeria is an exceptionally bad place for oil companies.

[parisv] 24/7/2017 13:22

podcast out:

Malcy talks about SAVP from 34m12s

[buffythebuffoon] 24/7/2017 11:21

Malcy will be mentioning SAVP on Voxmarket podcast today. I wonder why now?

Buffy

[taudelta1] 24/7/2017 08:28

More I read about 7's difficulties, the more I am convinced that they may be seeking to avoid creditors by splitting into "good bank, bad bank" ... the good bank being the bit going into the RTO .. but we don't know exactly what will be included or the terms .. so "DYOR" is regrettably suspended as we don't know what to research .. patience mes braves et bonne chance!

[lithological heterogeneities] 22/7/2017 19:41

New article about Seven Energy's financial problems:

21 Jul 17

[mount teide] 21/7/2017 09:02

Intersting article ref: export of Oil from Agadem Oil Block via pipeline to the large, modern port of Cotonou in Benin - courtesy of 'day sleeper' on LSE site.


Niger is considering the construction of an oil pipeline linking its oil fields in the north-east of the country to the port of Cotonou in Benin, the country's oil ministry said on Thursday.

According to information from the site Actubenin.com confirmed from sources close to the Ministry of Petroleum in Niamey, a Nigerian delegation led by the Minister of Oil Foumakoye Gado visited Cotonou from 13 to 15 July to assess the assets that Benin can offer For the realization of such a project.

The delegation held several working sessions with Beninese authorities before visiting sites and infrastructure that could facilitate the implementation of the project. At the end of the visit, Mr. Gado "expressed his satisfaction", it was clarified.

It should be recalled that thanks to its mutually beneficial cooperation with China, Niger joined the ranks of oil producing and exporting countries in November 2012. It is the Chinese consortium CNPC that operates crude oil from the Agadem oil block, which is then processed at the Zinder refinery, a Sino-Nigerian-owned company.

The current production is 20,000 barrels per day, for national requirements estimated at 7,000 bpd. According to the Nigerian authorities, with the exploitation of some 60 new deposits on the same block, the country hopes to extract between 60,000 and 80,000 bpd in the near future.

With this in mind, the government has been studying for some years the construction of an oil pipeline passing through Nigeria, Cameroon via Chad and Benin.


hxxp://www.maghrebemergent.com/actualite/breves/fil-maghreb/76267-le-niger-etudie-la-construction-d-un-oleoduc-entre-ses-bassins-petroliers-et-le-benin.html

[diversification] 19/7/2017 20:26

AK said, following a planned seismic and drilling program in Northern Nigeria. Savp will help plan the program using its knowledge of the analogous North Nigerian acerage, Partnering at the asset level on a case by case basis. AK followed up by saying he doesn't expect a significant capital spend on the project. (But capital non the less)

So how does he expect to achieve both? (Percentage farm in and fund it!) The article suggests CNPC have a vested interest in this drilling campaign. Where will the money come from for this considering at present they need every penny they have for the Niger drilling campaign (expected to last years) and the RTO?

Surely this suggests the JV is a formality?

[zengas] 17/7/2017 19:58

Savp did say they expected to do more deals with NNPC which is the parent of NPDC.

Taking into account any dilution and restructuring of debt, an asset such as this could be the possible key supplier of cash flow to enable a significant ongoing well drilling campaign in Niger. I beleive this could be potentially transformational in its own right when one looks at Seplat.

The Niger blocks could be drilled up and the assets possibly sold separately in the future still leaving a significant O&G company.

Perhaps the dilution that some see as detrimental to our growth out of Niger success expectations could, instead of us farming out in Niger see us retain 100% there and be akin to the hoped for original 30%-50% farmout in the first place - via us getting involved in this major Nigerian asset. Maybe this is why there has been such a delay in announcing/getting a Niger farm-in partner? AK said he would take a partner of his choosing for Niger. Maybe farrmin offers are there but this RTO offers the best option when one sees the details and why a farmout partner has not yet happened ?

[zengas] 17/7/2017 19:57

Seplat

First 3 months of Q1 2017 (to March 31st 2017).

Oml- 4, 38 & 41.
Gross oil production 7,721 bopd. (45% Net interest = 3474 bopd).
Gross gas production 211 mmcf/d. (45% net interest = 95 mmcf/d).
========================================================

7th June 2017 (8th June Savp RTO announcement/suspension)
OML-4, 38 & 41.
Gross oil production 75,000 bopd.
Gross gas production 290 mmcf/d
"On a net working interest basis this equates to around 34,000 bopd and 130 MMscfd, or 56,000 boepd."

and ....."to de-risk the distribution of future oil production to market. Alongside this, Seplat is collaborating with and supporting government on completion of the 160,000 bopd Amukpe to Escravos pipeline that will offer a third export route to the Company".

Re export - "with multiple options available in H2, route to market will be significantly derisked".

Additional - "Current wells capable of around 400 mmcf/d" (66,000 boe gas) ie 18,000 boepd headroom before any new gas well drilling.
Gas plant being increased to 525 mmcf/day capacity.

(OML-4, 38 & 41: 7E have 55% via NPDC ie NNPCs subsiduary - Seplat are the operator at 45% ).

[diversification] 17/7/2017 17:54

I hope for all of us that it is at a premium ;)

[buffythebuffoon] 17/7/2017 17:44

I guess we should have known that AK would have been drawn towards financial engineering given his background.

Personally, diversification, I didn't consider being exposed to the Niger drills as a game of roulette.

I agree 100% wth Ngms, that if we don't relist at, or very quickly move to, a significant premium over the price it was prior to the CMD presentation, I will feel we have been shafted.

Buffy

[diversification] 17/7/2017 17:33

I can understand some of the Negative sentiment associated with Nigeria and therefore any potential acquisition SAVP may make. However, I strongly believe it’s this sentiment that has led to such an opportunity. Over recent years many who have been invested in the sector have seen their investments dwindle, with Afren, one of the biggest casualties associated with the Aim index and Nigeria. As high levels of unserviceable debt and investor sentiment towards the sector beat up many vulnerable companies, significant investment in the infrastructure bringing the product to market have already been made.

Oil accounts for approx. 90% of Nigeria's exports and two thirds of Government revenue. This is one of the reasons why Nigeria is looking to boost confidence in its most dependant sector. With this incentive, Seven Energy signed a $112 million Partial Risk Guarantee (PRG) with the Federal Government of Nigeria for the supply of natural gas, delivered by its wholly owned subsidiary Accugas, to the 560 MW Nigerian Integrated Power Project (NIPP), Calabar, Cross River State. As such, the signing of the agreement is very significant because it is the first gas to power guarantee that the World Bank has provided for encouraging investment in the gas sector in Nigeria.

Whilst engulfed in a significant level of debt, SE have managed to restructure the business and significantly reduce costs. After the completion of its own gas pipeline, gas deliveries are set to rise by two to three times current annual production with significant further potential upside. SE have also opened up alternative routes to market from its OML’s, for its oil. Companies that have been affected by damage to the Trans Forcados Pipline will soon have an alternative pipeline to market which aims to provide security from the acts of vandalism. The Amukpe Escravos Pipeline Project is expected to come on stream by the end of 2017. The project entails the installation of continuous horizontal directional drilling, HHD, method to install the entire length of pipeline for the purpose of security from the act of vandalism.

The deeper I have researched SE, the more I have come to terms with the potential RTO, the market is taking steps to improve the security of its infrastructure which is the backbone of its economy. As long as SAVP are able to put together a reasonable debt structure, I think its ability to acquire assets at a significant discount to NAV will become quite a coup.

I can understand the frustration associated with the dilution to future potential returns from an oil discovery in Niger, but dependent on your own investment strategy, I never intended my investment to be wholly subject to a game of roulette. Andrew Knott has consistently said that any deal will be completed on a value accretive basis, and I have no reason to think the RTO will be completed any differently. I strongly believe we will come back at a significant premium to the current market price which will go some way towards mitigating the reduced level of return from Niger. The ability to play future financial returns on the asset without compromising too much on your capital investment value has become compelling. With many invested for the sole reason of exposure to Niger, confidence of success is high and I believe the possibility of large future capital gains for the sole exposure of Niger alone is promising, as long as we relist at a significant premium to current market value.

IMO, do your own research etc etc.

[lithological heterogeneities] 17/7/2017 10:41

I still think we could come back at between 20p-30p then the long awaited JV will just double us back to where we were.Of course I am hoping I am wrong and this asset is so large we could re-list substantially higher,maybe £1.50 to £3 plus.Who knows anymore. All I know is I want nothing to do with Nigerian oil & gas.

[lithological heterogeneities] 17/7/2017 10:32

Timber,Exactly what I have been saying all along.Nigeria is an absolutely terrible country for oil & gas companies. Thats why our target are in financial trouble...they are in Nigeria.....and we are taking their Nigerian oil & gas assets on. Its a potentially disastrous move imho.I hope it falls through and we just go back to where we were. We do not need this huge distraction and money/resource pit in one of the worst countries in the world for oil and gas companies.

[ngms27] 17/7/2017 10:17

We were funded for a 3 well drilling campaign, I agree further funding would be required for anything larger with a potential farmout being suggested.The 3 well campaign was going to have very material upside, or put another way a Big Bang for your bucks.By reversing into 7E that explo bang for your bucks is now a damp squib.So unless the shares are materially higher than 34p on relisting I see this as shafting existing shareholders. This won't be the Company we invested in.I consider this Empire Building unless we have an instant return of shareholder value to allow us to exit the unwanted beast full of debt.

[timberwolf3] 17/7/2017 09:46

Becker loses large chunk of $100 million investing in Nigerian oil.

[lithological heterogeneities] 17/7/2017 09:41

Come on SAVP...hurry up FFS !

[timberwolf3] 15/7/2017 10:33

Buffy -

OWZAT . :)

[thegreatgeraldo] 14/7/2017 14:13

Thanx Buffy, I understood what ngms was wittering on about

[buffythebuffoon] 14/7/2017 14:09

P.S. Malcy adds about as much to an investment case as Zak Mir does.

Unless you are devotee of TA you'll know that's zero.

Buffy