Savannah Petroleum Share Discussion Threads

[canigou2] 08/8/2018 10:47

Hi All,

I've been trying to understand what the 7e deal will bring to Savannah with immediate effect in the very simplest terms. IMO there is a little ambiguity with the way it is laid out in the latest corporate presentations and RNS releases.

Is the following reasonably correct?

- Net to SAVP 92 MMBOE 2P reserves, 44 MMBOE 2C resources
- 85 mmboe (additional) best estimate prospective resources (net) at the Uquo field
- 22.1 kboepd (Net share of take-or-pay volumes)
- 20% carried interest in Accugas
- Savannah-Accugas 50/50 profit share on sales price for new customers above US$3.5/mcf?

Also IMO it is a little unclear what the Niger successes have brought?
- 3 (of 3) successful wells so far (R3 block only) - Simply adding pre-drill estimates = total mean unrisked recoverable resources of 110 mmbbls (36 mmbbls + 39 mmbbls + 35 mmbbls)
- Savannah has mapped 123 potential drilling targets across R1/R2 and R3/R4
- Independent reserve auditor CGG Robertson has estimated “yet to find” risked prospective resources across Savannah’s license areas of 2,821 mmbbls (SAVP c.50% interest)
- Agadem rift basin 95 discoveries from 129 exploration wells (74% success rate))
- Commitment for EPS (with MOU in place as of today)

Additionally:
- Fully funded for 7e deal and present Niger work program
- Maiden US$12.5m dividend expected to be paid in Q1 2019 - from expected cashflows

Please correct me if I'm wrong? or add anything missed? Thanks.

Present mkt cap £220m.

I will continue to add at these prices, looks very much undervalued IMHO, unless anything in the above is significantly wrong. Clearly the market isn't 'looking'. SAVP seem confident the 7e deal will go through in Q3 2018, they keep repeating so. GLA.

[honestmarty] 08/8/2018 09:50

Very disappointing response.

AK needs to address the crisis of confidence in his leadership immediately.

IR in Savannah have been fobbing off panic-stricken investors with interim update soon emails for weeks. That explains Mystic Mount Teide(sorry Zengas) and his psychic abilities.

[alamaison5] 08/8/2018 09:00

The bottom is 25p. One duster and that's where it's going, then buy...
No one wants to take the risk these day. MMs are getting very cautious on explorations...

[bad gateway] 08/8/2018 07:31

66p/share is a nice target from here. Good call Mount Teide too,spot on with the news soon comment.

[gmr64] 08/8/2018 07:29

Mirabaud note this morning:

Savannah Petroleum (SAVP LN) announced this morning that it has secured backing from the Niger Government for an Early Production Scheme (EPS) in the Agadem basin.

The company has signed a binding MoU with the Government providing a framework for the early development of oil recently discovered in the East R3 area. As part of the agreement, the Government will facilitate commercial arrangements for: (1) the sale of oil to the SORAZ (domestic) refinery in Zinder - jointly owned by CNPC (60%) and the Government (40%) - which has spare capacity of 5-7 kbopd, and (2) the use of CNPC's 463km domestic pipeline and processing facilities in the Agadem basin. Assuming implementation, this would allow Savannah to truck crude (up to 5-7 kbopd) 60km north to CNPC infrastructure where it would be processed and delivered by pipe to the refinery for a fee. Importantly, under this scheme, Savannah would look to lease much of the surface equipment (initially) - including wellhead facilities - meaning the capital costs involved would be limited to drilling and associated gathering (we estimate ~US$6-7m/well).

In our opinion, the MoU is a clear statement of intent by the Nigerien Government that it is keen to support Savannah in establishing commercial sales as quickly as practicable. We note that the MoU includes a commitment by Savannah to submit a pre-feasibility study within 90 days, followed by a request for authorisation to commence production. Understandably, at this stage SAVP hasn’t committed to timescales to first oil, however, in our opinion it would not be impossible for the first sales before the end of the year (as part of the upcoming well testing campaign). We expect initial volumes to be modest (0.5-1 kbopd) with production ramping up to 5-7 kbopd over the medium term. Assuming a ~US$25/bbl net back (at $70/bbl), our back of the envelope calculation suggests that every 1 kbopd of output might add ~US$9m of annual post-tax CF at current prices.
Today’s news has come faster than most could have expected, with the company only spudding its first well at the end of March this year. Since then it has recorded three discoveries out of three, with results from the fourth well due over the coming weeks. Despite this success, Savannah’s share price continues to languish, in our view due to the length of time that it is taking to close the Seven transaction in Nigeria. We have always maintained that the risks to completing the deal relate to timing rather than anything else, and it is encouraging to read in today’s RNS a brief comment that the transaction remains on track to complete this quarter. With Nigeria completion now in sight and Niger running ahead of expectations, we believe SAVP has all the ingredients for a material re-rate with the stock currently trading at a less than half our Total NAV (66p/shr).

[zengas] 08/8/2018 07:20

Slipped in a comment on this at the end of the RNS

"I also look forward with confidence to the completion of the Seven Energy transaction this quarter, and expect to provide further announcements in relation to this shortly."

[honestmarty] 08/8/2018 07:12

Excellent news from Niger.

Clearly AK is having his Gingernuts roasted over the charcoal for failing to complete the 7E RTO.

More jam tomorrow there at the end, but at least better than the deafening silence.

Hopefully a little bounce at the open.

[mount teide] 07/8/2018 15:26

As a result of the further delay to the closing out of the 7E deal the recent share price action has got a 26p-27p double bottom written all over it imo - which suggests to me a positive announcement may not be too far away - since in the short term, markets usually move in a direction which tends to hurt the most.

Do i think the 7E deal will proceed in Q3? Yes

Will i buy more at circa 26p-27P? Yes

[rampair] 07/8/2018 15:25

Agree completely Divmad, well put.

R.

[divmad] 07/8/2018 15:23

And if you were a bondholder, first of all if you have a strict mandate to hold income-bearing securities, you would have to sell your savp shares (that has been my assumption for the earlier share price weakness). Then if you thought the 7E deal was going to run into prolonged difficulty, you might accelerate your bond-to-equity sales to get liquidity, regardless of the Niger fundamentals or even the 7E fundamentals looking out 1-2 years.

[divmad] 07/8/2018 15:19

I suppose the 7E deal is one where one obstinate/bureaucratic bondholder can stymie the whole deal? I'm no lawyer, clearly, but I read somewhere that the delay has been caused by one or two slow-moving holders.

And is there any % of bondholders not signing that can force cancellation of the 7E deal?

Anyone know better?

[nen2319] 07/8/2018 15:11

Zengas, any idea who could be so desperate to sell and if bond holders what would the non closure of the 7E (long shot) have on them?

[zengas] 07/8/2018 14:41

Kunamas 2nd discovery though was at just over 2200m in the E5 close to TD.

Whoever has been selling isn't bothered about the success of the wells in Niger to date. There's always been a fair market in soaking those sales up. Thing is if the buyers dry up faster before the seller(s) are done you might see the downward pressure like yesterday/today or maybe some stops triggered as well.

[thelung] 07/8/2018 14:36

Kunama-1 Drilling Performance

The well was drilled by the GW 215 Rig to a total measured depth of 2,460m, and encountered the main objective targets at, or near, their prognosed depths. The well took a total of 14 days to reach target depth, and all operations are expected to be completed within 23 days of spud. This compares with a pre-drill expectation of 22 days to reach target depth and 30 - 35 days to complete all drilling operations. No significant geological or drilling hazards were encountered

________________

Only 11 days into drilling Eridal-1 so agreed that it's a bit early for it to be a confirmed dud, but not highly unlikely if Kunama-1 reached TD (2460m) after 14 days and discovery was made at 1700m and 2200m....

Holder from 35p and highly likely that it's the continued seller :-)

[zengas] 07/8/2018 14:33

Doubt it at this stage. Only 10 days drilling yesterday and Eridal is to 2592m.

Shortest well was Bushiya taking 16 days to TD at 2200m. Discovery in E1 & E3 at approx 1500 & 1700m.

Amdigh 24 days to reach 2469m. Discovery in E1 & E2 approx 1600m & 1800m.

Kunama 22 days to reach 2460m. Discovery in E1 at 1700m and in E5 at deeper than 2200m.

I'd say it's more to do with whoever has been selling for quite a while and the delays in getting this deal signed and running past end July guideline.

[kirkuk] 07/8/2018 14:29

Eridal-1 spudded on 27th July with a 25-35 day completion.

Highly unlikely they would know it is a dud yet.

[honestmarty] 07/8/2018 14:17

I think Gingernuts and the money pit 7E are the duds.

Time to turn the lights out?

[thelung] 07/8/2018 14:04

Looks like Eridal-1 might be a dud?

[honestmarty] 06/8/2018 16:31

Gingernuts needs to recognise that his failure to deliver 7E is harming shareholders.

Walk the plank or at least come clean on the problems.

[nen2319] 06/8/2018 15:44

I think if that was the case then you’d be looking at 20% down. Maybe it’s a last dip before good news?

You can only hope?

[2prsimo] 06/8/2018 15:34

What's happening guys - bit of a chart breakdown here - is there a whiff of bad news spreading over from Nigeria?

[nen2319] 01/8/2018 23:10

Sounds good. Do you still have the address😀8514;

[honestmarty] 01/8/2018 22:32

Could this generous Nigerian's name have been Andrew "Gingernuts" Adebayo?

[lithological heterogeneities] 01/8/2018 16:52

I lost all my SAVP shares to a Nigerian email saying that I could simply hold my shares in their account and I would receive £1m from them one month later.;0)