Savannah Petroleum Share Discussion Threads

[mount teide] 20/12/2017 15:18

As a relatively new shareholder in just a few days before suspension - the 35p placing price is a disappointment, not least since its almost exactly my average price.

Clearly, the ASMA deal is considerably better than that originally proposed to the rest of the II's and once announced had an entirely predictable impact - material reduction in the price they were prepared to pay and significant loss of management credibility.

What is ASMA bringing to the table to have justified such favourable treatment? As, the announcement of the ASMA deal has undoubtably had a negative rather than positive investment impact to date, contrary to what the company were suggesting in the ASMA announcement.

Although the revised deal seems to offer decent investment risk/reward at 35p, its less than i was expecting and i'm sure many longer term holders AND, very much reliant on management pulling their finger out and getting on with the Niger drilling ASAP, as i suspect the patience of some longer term holders could otherwise be tested to breaking point.

I also suspect many of the II's may well have been prepared to stump up 40p+ but, saw the ASMA announcement as a 'Christmas gift' from management enabling them to negotiate an improved deal.

Seems like the old adage: 'never underestimate Institutional Investor greed' has again reared its ugly head - although in this instance it does appear management have hardly helped themselves or us in the way they have handled the placing negotiations and, communication flow.


AIMHO/DYOR

[buffythebuffoon] 20/12/2017 14:30

I’d say it’s quite clear that Andrew Knott is more a CFO than a CEO.

A CEO needs far superior interpersonal skills than he appears to possess; one facet of such skills being good communication.

I know that James Parsons can get a bit wearying, but my God, the man can communicate. 😂

Buffy

[zengas] 20/12/2017 14:17

I can't see too many existing shareholders being overly happy with the pricing at 35p and i'm certainly not over the moon with it given the time we've been off market twice. I was expecting 40p minimum.

Did the strategic partnership announcement with ASMA or a whiff of it throw a spanner in the works and no one was going to stomp up at 40-50p when ASMA were going to get a bonus/better deal?. As it see it, management have had their wings clipped in the last few days possibly by existing institutional investor base that was always deemed strong. Not surprising given previous funding pricing, time off market and long delay in actually drilling in Niger. Perhaps inst/investors way of curtailing getting too big too quick while Niger has lagged behind with no actual drilling in these last 2 years. Maybe the institutional investors would have been more behind it at a better price if the company had delivered on a few wells in Niger in all this time ?
If their reason for not drilling in Niger was to try and deliver a stronger placing price it certainly hasn't been worth delaying it for 35p imo. Time to start delivering on the operational front. There's simply no excuse to not get stuck into Niger. They sold these prospects to investors as very low risk/high chance of success, low cost to drill - circa $3.5m/25 days and multiple targets meaning a drilling campaign was spread over multiple wells/targets for the money rather than one big high impact one shot wonder well so there is no excuse given they said they had 10 drill ready prospects.
Implied m/cap at £313m at 35p means around 900m shares.
As for the dividend it's around £9m so a penny a share to start with but i'd rather see that staying in and going on drilling. I don't believe the company see it as realistic on this latest announcement. What's the point in raising future cash with dilution when paying out the other end in a dividend?. We would be better off to do without any further capital from the likes of a strategic partner and thus not pay a dividend.

At £313m m/cap. $85m cash is not too bad with plans for 20k+ production and 93 mmboe P2 and if they reclassify the 2C then nearer 135 mmboe P2, plus the Accugas interest and start the initial 3 wells on Niger, then drill further from cash flow. Plenty of upside potential but definitely geared for new shareholders going forward and no reward thus far for being invested this past 2 years.

[ifthecapfits] 20/12/2017 13:31

Shocker. Not what I was hoping for. Looks like Divi is still a go though.

[buffythebuffoon] 20/12/2017 13:09

If we take emotion out of this, consider the following.

The implied market cap is £313m according to the company. We will have $88m of net free cashflow per year, and we’ll have three fully funded very high COS wells drilled back to back.

If presented with that, I’d be interested.

I’m sure Zengas will be along with a much more comprehensive analysis, but I’m a simple soul.

Buffy

[honestmarty] 20/12/2017 12:45

Just bad, bad, bad, bad.

I think we should all vote no.

[lithological heterogeneities] 20/12/2017 12:41

The lungThis will collapse on resumption. Sub 30p easily imhoi. The shorters have won. We have lost.

[lithological heterogeneities] 20/12/2017 12:37

And it gets worse,alot worse :"Changes to the proposed Niger work programme, including the removal of the acquisition of 3D seismic and a reduction in the number of wells to be drilled in 2018 from five to three; "So we are now back down to only 3 wells funded due to the lack of institutional investor interest and only raising $125m.Worst RTO I have ever seen in over 20 years investing.Worst IR I have ever seen in over 20 years investing.

[lithological heterogeneities] 20/12/2017 12:33

And a Merry Christmas to all from SAVP.

[lithological heterogeneities] 20/12/2017 12:32

We now know why they let in these new investors right at the end....they could not raise $250m at 40-50p.

[thelung] 20/12/2017 12:31

Welcome relief for shorters, but they still can't relax until they've bought

[lithological heterogeneities] 20/12/2017 12:30

Clearly half the institutional investors they thought would take part at 40p-50p just were not interested.We have been completed shafted.We will now re-list at 35p and start a greatly diluted drilling campaign.There will be a rush for the exit and I see this falling immediately on day 1.A disaster.

[drattuts] 20/12/2017 12:27

Now raising up to $125m in placing rather than $250m

[drattuts] 20/12/2017 12:19

RNS out - placing price 35p

[diversification] 20/12/2017 11:45

JNBRW, great posts

[lithological heterogeneities] 20/12/2017 11:37

I hope so, but I would like to see some clarity from the company.

[jnbrw] 20/12/2017 11:09

That paragraph related to the due diligence of that transaction not the entire placing process I think you will find . Just as the seven transaction process was due to stretch into q2 2018

[lithological heterogeneities] 20/12/2017 10:58

JNBRWYes, but that all changed in the 18 Dec RNS:"within 30 days (or such later date as the parties may agree) of the Company's shareholder general meeting to be convened in due course to approve the Placing and the Agreed Transaction."This means that within 30 days (or later) AFTER a general meeting !So it looks like we now have to wait for the general meeting then re-list "within 30 days (or later)."This could drag on for a long time as this only starts AFTER a general meeting.

[jnbrw] 20/12/2017 10:33

Interestingly if you read the appendix of the placing document (RNs of 14 Dec) it states that trading in the first tranche of the placing will commence trading on or around the 20 Dec ( not on or around the 19th), so maybe the timeline was always a bit optimistic. The payment date for the first tranche is also scheduled for 20th ( not 19th).

I expect a update RNs soon, it's also easy to forget how complex these actions are with legal sign offs, regulatory approvals, and so many other requirements every step of the way

[honestmarty] 20/12/2017 10:23

Dorset et al.

I think , if you check , by last post was a Xmas carol.

Perhaps you should direct your keyboard venom elsewhere?

[thelung] 20/12/2017 10:08

Because they will only know the extent of their loses at about 08:05 on the day of relist, so they can't relax :-)))))