Savannah Petroleum Share Discussion Threads

[dorset64] 14/12/2016 15:17

Due to one of my co's operating in the security sector, I receive each day a security notice from the Nigerian government stating exactly what attacks have taken place, where the security risk is heightened and how/what they have done to curb terrorism in the area..

Todays highlights include:

Increased security measures in Adamawa & other outward areas states following suicide attacks.

Government & militants are now in dialogue with each other following the NDA/NDGJM pipeline attacks in the Delta, Rivers & Bayelsa states.


Nothing specific today or this week and the problems have been decreasing since the elections have been held.

[napoleon 14th] 14/12/2016 11:13

Very interesting, BUT.....

As I live in France (for now), I've heard all about very effective Fr. military action in Mali, Niger, Chad against Bokoharam. I like the SAVP story........ as long as the French stay there! They should, as Niger is a critical source of uranium & 80% of Fr elec is nuclear! We know Nigeria is also a risk country, as well as chronically corrupt.

In other words - high geopolitical risk.
I could loosen up some cash for SAVP, but NOT by selling any SOU!

[dorset64] 14/12/2016 10:04

With any loan, no lender would enter into an agreement without firstly completing their own DD to ensure you can pay the monies back in full, including interest.

Other positive is that the BoD's chose not to seek an equity based fund raising instead choosing to settle in cash.

[zengas] 14/12/2016 07:59

$12m 3year revolving loan facility available to SAVP announced this am.

Why would you borrow this and potentially draw it down if you had no income or way of paying it back ? Could a future farmin payment cover it or perhaps indeed a stake in a producing asset or discovery ?

Puts their cash availability at $50m net since 8th July ($40m gross raised 8th July at 38p over-subscribed).

They were looking to do a potential farmout of up to $200m. "Discussions with potential farm-in partners ongoing, any transaction expected to be announced prior to commencement of drilling activity" - 27-9-16.

As yet they still have 100% of the asset with a gross 2.185 billion bls *RISKED* recoverable and a high COS estimate based on the Chinese finding over 925 mmbo P2 on the adjacent and interspersed acreage that SAVP holds.

[wardrv] 14/12/2016 07:55

You have to wonder what is cooking to start the clock on a three year loan now, I would have thought we were still some way off running out of cash so some sort of purchase or joint venture ?

[dorset64] 13/12/2016 12:28

After a convo yesterday and then looking into SAVP last night/this morning, I bought a couple of times this morning although one of the buys appears to be reported as a sell.

Will look more over the coming days but at first sight, looks a good buy and an exciting couple of years ahead for investors.

Thanks Zengas.

[someuwin] 13/12/2016 10:33

Looks to be a great buy at these levels.

[thomasthetank1] 25/11/2016 10:12

Morning all,

Upbeat note out by Mirabaud this morning. They have maintained their BUY recommendation on the stock, with a target price of 125p/shr, almost 5x the current share price.

Savannah Petroleum – Good vibrations

Savannah hosted an analyst site visit to Niger last week, during which it reported on recent operational progress in the Agadem basin and unveiled a strategic tie-up with the Nigerian state affiliates NNPC and NNDC. A busy few months lie ahead, with talks to sign a rig for exploration drilling expected to draw to a close in January, setting the countdown to the company’s first exploration wells. The fully funded, multi well drilling programme will likely kick off with Damissa (93 mmbbls prospective resource), which is expected to spud in late Q1 / early Q2. Meanwhile the ongoing 3D seismic programme should complete early next year, ready for analysis by the end of Q2. Talks are well advanced with regards to a new export route option to a major, under-utilised refinery in northern Nigeria, and even the possibility of trucked early production with attractive economics. The Chad Cameroon route remains on the cards, however alternative options can only help in driving forward a final decision, and, indeed may help galvanise the ongoing farm out negotiations.

[thomasthetank1] 24/11/2016 08:50

Morning all,

Looks like Savannah is hosting a retail call for shareholders at 11am on the 1st December.

If you would like to participate in the conference call please contact Jimmy Lea at Celicourt Communications via email at [e-mail]

[thomasthetank1] 17/11/2016 14:09

Hi all,

Please see below a link to a Proactive Investors interview of Savannah's CEO, Andrew Knott.

[...]

[thomasthetank1] 17/11/2016 11:51

Hi all - Thought you might like to see Mirabaud's positive take on yesterday's releases.

After the close yesterday, Savannah Petroleum (SAVP LN) announced an upbeat operational update and separate strategic tie-up with the Nigerian Government for operations in neighbouring Nigeria. The timing of the announcement was designed to coincide with an analyst site visit and presentation that took place yesterday in Niger.

The Nigerian deal is multi-faceted. Firstly, a Memorandum of Understanding (MoU) has been signed with State-owned affiliates NNDC and NNPC to provide technical assistance to their northern exploration arm, FES (Frontier Exploration Services), in the Nigerian portion of the Central African Rift System. FES has received approval for a ~5,000km2 3D seismic programme (which is already underway) and six well drilling campaign in this area (starting in 2017) amidst a Government push to regenerate the north of the country under President Buhari. The driver for FES is that SAVP has a significant database and technical understanding of the Niger portion of the Central African Rift. Meanwhile, in exchange for its involvement, SAVP expects to earn a back in right (to be determined in further talks) in a success case, providing meaningful optionality in a new exploration frontier without any of the associated capital costs.

Secondly, in parallel with the Nigerian & Niger Governments and other stakeholders, SAVP has established a more profitable export solution for any oil discovered in its Niger licences. This will involve the export of crude (initially via truck, prior to the construction of a pipeline) from the Agadem basin to the Kaduna refinery in north-central Nigeria, located ~800km away (this option was not considered a priority under the former Goodluck Jonathon administration in Nigeria). Construction of the pipeline is expected to funded by a pipeline consortium, likely including the Governments of Nigeria and Niger, SAVP (through a separate infrastructure SPV) and other third parties. This provides an alternative export route and therefore reduces dependence on the CNPC’s sponsored Agadem-Chad export line. It also has two other key advantages for SAVP: firstly it will enable early exports via truck, potentially bringing forward production and cash flow. And secondly, it is economically more attractive. Running a long term oil price of US$60/bb (inflated at 2%) SAVP estimates a breakeven (10% IRR) of US$35/bbl for trucked crude to Kaduna and just US$26/bbl if the crude is piped. We would add that these economics have been independently verified by CGG (SAVP’s reserve auditor) and include significant capital cost savings (maximum cash draw-down to first oil now US$200m vs. US$410m before) achieved through the transfer of capex into opex (the most significant aspect of which is the inclusion of an early production facility using a material amount of rental equipment).

Turning to the operation update, SAVP continues to make solid progress on the ground in Niger with 3D acquisition underway in the R3 block and completion seen in February 2017. This ~800km2 dataset will take about four months to process and interpret, providing further definition on the 2D-defined structures in the block (numbering 12 prospects) and potentially unlocking new targets. As planned, drilling is set to commence in mid-H1 2017, most likely on the Damissa prospect in R1 (93 mmbbls of prospective resources) which already has 3D coverage, followed by Bushiya (37 mmbbls) and Kunama (35 mmbbls) in R3. A drilling contract is expected to be sealed in January 2017 and will conclude 3 firm wells and multiple optional slots. Having raised US$40m of equity over the summer the company is funded for up to 5 wells from its own cash resources with the potential to unlock considerable value. Assuming five wells targeting ~200 mmbbls on aggregate, we estimate total unrisked upside of 194p/shr – compared to the current share price of 27.5p/shr – even before factoring in the economic improvements discussed above.

Overall, yesterday’s update brings several new elements to SAVP’s story that enhance the investment case in our view. The establishment of the exploration tie-up with FES brings material optionality at low cost, whilst the new export route provides an alternative to the Chad pipeline and enhances project economics – emphasising the attractive breakeven price for Agadem crude (something that can do no harm in ongoing farm-out talks). For the market, meanwhile, confirmation of SAVP’s low risk, multi-well drilling campaign in H1 may be of more importance. Once a drilling contract is signed and the timeline is set in stone we see this as the key catalyst for a re-rating of the shares.

[taudelta1] 17/11/2016 11:16

ngms .. hear what you are saying about country risk in Nigeria .. but think now that the Chinese pipe toward Chad might just drop its tariff and the breakeven of $43 by that route could therefore move down.

And as Zen points out, "pipeline risk" is now much lower as a result of having alternative routes.

It's similar to the situation of having two oil prospects that are geologically totally unconnected .. the chance of at least one of them being successful is much better than the average cos of the two fields.

It's clear that the Niger gov't is also of the view that its stake in this is best served by riding two horses.

GLA

[ngms27] 17/11/2016 08:47

Lets hope you are right and they don't start sinking monies (by diluting) into the Nigerian cesspit in 2017

[zengas] 17/11/2016 08:44

You might find that the MOUs will help with the 2nd oil route into the Nigerian refinery and there's a bigger picture to play out in making the assets attractive to a future buyer.

The basin is huge and as much again extends across the border into Nigeria so who knows what the reasons for this kind of understanding. Maybe there's much can be learned from what SAVP have carried out to date in the their basin section.

The Niger ops are going to be moving well ahead of anything in Nigeria so it's not an issue at all for me.

[ngms27] 17/11/2016 08:20

Why they just cannot concentrate on Niger I don't know. Just a mention of the word Nigeria is enough to spook me. It's probably the most corrupt place on the Planet.

Just drill and prove up resource in Niger and shareholders will be very happy, forget Nigeria.

[wardrv] 16/11/2016 22:13

Thanks Zengas, it seems reasonable to expect more news from this partnership as at the moment the Savannah team are providing expertise in the analysis of new prospects in Nigeria but I am not clear what Savannah are getting out of it. Farm in partners bringing cash to speed development would be great. Good news on a second export option, anyone with experience of Kurdish oilers will know how key that is.

[zengas] 16/11/2016 18:06

Possible farm in partners but also looking at additional opportunities on the Nigerian side of the Agadem rift basin.

MOUs signed with NNDC and NNPC in relation to collaboration between the three parties in the Nigerian section of the Central African Rift System.

Under the terms of the MOU, the parties will establish Technical and Steering Committees to manage the process of evaluating the technical and commercial prospectivity of this materially underexplored region.

Savannah expects to enter into additional agreements over time with NNDC and NNPC and is also in discussions with its new partners in relation to the pursuit of other potential opportunities in Nigeria. Further updates will be provided as appropriate.

Dr Mazadu Bako, Group General Manager of Frontier Exploration Services NNPC, said:
"We are delighted to commence working with Savannah Petroleum in the Nigerian portion of the Central African Rift system. Savannah's technical knowledge and experience of working in the Niger section of this system is a major asset for NNPC as we look to unlock the potential of this area."

Dr Ahmed Muhammed, Group Managing Director of NNDC, said:
"We are privileged to be in a strategic partnership with NNPC and Savannah Petroleum. This partnership lays a foundation for deeper economic ties and would enable us to contribute towards the achievement of the energy security strategies of the Nigerian government. In addition, NNDC reaffirms its commitment to a successful and mutually beneficial relationship with our financial and technical partner, Savannah Petroleum."

Andrew Knott, CEO of Savannah Petroleum, said:
"Savannah is very pleased to announce its partnership with NNDC and NNPC. We very much look forward to leveraging our experience gained from working in the Niger section of Central African Rift to assist in the exploration of the Nigerian section."

The New Nigeria Development Company Limited (NNDC)

The Nigerian National Petroleum Corporation (NNPC)

[zengas] 16/11/2016 17:34

From the update

Break-even price down to $26/b from previous $43/b.
Now 2 export routes against just one previously.
Expected in-ground value per barrel of $5.10.

Well drilling for a minimum of 3 wells for contract signature in January.

93 mmbls on Damissa structure on R1.
37 mmbls Bushiya structure on R3.
35 mmbls Kunama structure on R3.
Those are the recoverable estimates with Damissa and Bushiya classed as low risk in Septembers presentation.

118 exploration targets.

800km2 3D survey to be completed in February and should show up additional exploration targets (and once again increase the *recoverable* oil potential which currently stands at 2.185 billion bls).

Steve Jenkins, Chairman of Savannah Petroleum, said: "We are very pleased that this work has validated our reasons for entering the ARB in the first place, i.e. that our permit areas contain a large volume of low-risk and low cost oil structures - and are very excited to shortly be moving into the drilling phase of the project".

[wardrv] 14/11/2016 08:32

The analyst meeting is going ahead this week, investor relations contact is in Niger now, RNS update planned for this week.

[taudelta1] 10/11/2016 15:20

No, assuming it is going ahead in Nov, the analysts must have already received their invitations ... at least we can be sure that if anything material is discussed, there will be an RNS just ahead of the beginning of the meeting ... it's possible there has been a delay to something important "in the pipeline" e.g. something to do with the err pipeline!

[wardrv] 10/11/2016 09:53

Does anyone know a date for the analyst meeting in November or indeed if it's going ahead ?

[divmad] 31/10/2016 12:17

I can hardly imagine Savp financing an on site presentation to a bunch of City analysts without there being something of substance to be announced. And I'm not referring to an equity placing, though these things do get tied in sometimes.

[bushman1] 31/10/2016 11:59

Fully agreed taudelta. After the O & G Analysts return from their travelling to Niger with SAVP this November an update should be forthcoming re : the pipeline.

[taudelta1] 31/10/2016 10:49

New presentation on website today very interesting ... one of the slides concerning the geology quite encouraging for gcos after 3D given trapping structures. Think the big thing for this stock will be news on the export pipeline (good that it won't involve Nigeria IMO) ... I wonder if we will hear of developments on this front in November (another slide refers to SAVP's rights to equity participation in the pipeline) .. GLA