Savannah Petroleum Share Discussion Threads

[bushman1] 26/9/2018 14:44

Divmad. I bought my first shares in SAVP after the presentation in London two years ago. It looked compelling then. To hear Theresa May / UK is now opening an Embassy in Niger says it all for me. This is a decision taken only after huge due diligence, how will the UK benefit etc.

[shareideas1] 26/9/2018 13:59

Look at boohoo or Asos which are also on AIM and have been multibaggers off much higher market cap based...

[divmad] 26/9/2018 13:55

Zengas, much as I am grossly overweight in SAVP, what do you say to the doubters who will argue that SAVP is already an over-large share for AIM investors, at a MC of £236mn, so it will take gargantuan oil finds (in Niger) or acquisitions (in Nigeria)to make this a multi-bagging opportunity, once the discount-to-NAV gap closes on the 7E deal being closed?

ATB, Divmad.

[zengas] 26/9/2018 10:25

There's 7 billion bls unrisked recoverable mid case in the Niger blocks ($35 billion worth of gross target value using $5/b).

2.8 billion bls risked = some $14 billion of value in the ground to transfer to the share price depending how much they can prove up or decide to farm out.

Yesterday in the interview at 4:30 in, re Accugas network AK repeated that from a supply perspective there was 40 tcf of gas that could be tied in - that's a discovered resource of over 6.5 billion boe. If Accugas was doing 100,000 boepd it would only use 15% of that figure in 25 years.

I could see from both Niger & Nigeria, Savp realistically attaining 1 billion boe of reserves based on 1) High COS in Niger and 2) the number of Nigerian fields looking to monetise those huge discovered gas resources.

Given Savps holding in Accugas it would only be rational imo for Savp to pick up more reserves/JVs to supply some of that gas to Accugas. There would imo be a scramble from such a large number of discoveries to do a deal with Savp/Accugas in monetising some of that gas.

With the gasification of the country Accugas in it's own right could be the big winner which we have 20% off fully carried (plus a low cost option for a further 10%). Our interest in Accugas alone could eventually be worth a lot more than the current share price.

[plentymorefish] 26/9/2018 10:20

It's hard to have one without the other!

[yasx] 26/9/2018 10:04

Have recently taken a fairly decent position here. Could potentially be monstrous upside, though the risks are not insignificant.

[ifthecapfits] 26/9/2018 09:55

61 pages of great research.

[shareideas1] 26/9/2018 09:49

80p risked NAV and 155p unrisked shows the opportunity here...As milestones are reached and reserves firmed up, the risked and unrisked converge, driving a deserved re-rating in this share...

[thomasthetank1] 26/9/2018 07:48

Hannam & Partners - Savannah Petroleum - Fast track to cash flow

A bigger Savannah on the horizon

Whilst waiting for the Seven Energy transaction to close, the market has grown impatient, leading Savannah to now trade at a ~64% discount to our risked NAV of 80p/sh. The underperformance has come despite material exploration success. Following Savannah’s drill bit success in Niger and progress on closing its now enlarged deal in Nigeria, we publish an updated set of forecasts including a new NAV and projected cash flows. We believe Savannah offers a combination of solid free cash flow generation funding cash returns to shareholders, growth from new developments and exploration upside. The Seven Energy assets should provide long-term, stable cash flow that create a basis to return capital to shareholders, whilst still pursuing a self-funded growth strategy.

Seven Energy deal to close in Q4'18 underpinning our valuation

Savannah has just announced an update on the Seven Energy Transaction and on operations at the Seven assets in South East Nigeria. It included two new sub deals that help the market understand the delay to completing the Transaction. Both deals simplify the Seven Energy ultimate structure while enhancing reserves and control. With this news Savannah can work towards the Implementation Agreement required prior to closing the Transaction in Q4 2018, which should act as a material catalyst. We believe the market is pricing a large discount on the closure of the Seven deal in Nigeria as we carry >40p/share of core value from Uquo, Stubb Creek and Accugas Midstream.

Niger - 4/4 on exploration; production next year

Savannah’s drilling programme in Niger has seen the successful drilling of four exploration wells in 2018, with early production expected in 2019. The fast track monetisation of the Niger discoveries should provide a second leg of cash flow (c.US$10m for every 1kb/d of production), in a country with a supportive Government and benign operating environment. Further exploration wells and seismic are also likely in 2019, as is the potential to bring in a partner (as per recent local press reports). We carry 26p/sh of risked value for Niger.

Valuation: big discount to NAV and >20% FCF yield by 2020

The company is trading at 1/3 of our risked NAV of 80p/sh (NPV12 at US$70/bbl Brent flat) and a 33% discount to our core NAV. Overall, we see an undiscounted payback from the Seven Energy deal in around 3 years. SAVP is trading on relatively low cash flow multiples already in 2019 before substantial growth in earnings and cash flow in 2020 puts it on very low multiples (e.g. EV/EBITDA multiple of 4x in 2019, dropping to just 2x in 2020). We believe that stable cash flow from gas sales in Nigeria, notably underwritten by payment guarantees, including from the World Bank, will unlock material value in the share price. We estimate the Nigerian FCF generation of US$80mm in 2019 (supporting a dividend of US$12.5m and the Niger capex).

[haideralifool] 25/9/2018 23:17

On Tuesday 16th October we are delighted to welcome the legendary oil and gas analyst Malcy Graham-Wood, Echo Energy CEO Fiona MacAuley, Andrew Knott, CEO of Savannah Petroleum and Paul Welch, CEO of SDX Energy. Our host for the evening is Nigel Cassidy, the financial journalist. We start with drinks at 6 pm, presentations begin at 6.30 pm prompt, and we round things off with an opportunity to meet the speakers over canapes and drinks at around 8.15 pm.

hxxps://www.eventbrite.co.uk/e/london-south-east-oil-gas-investor-evening-with-malcy-graham-wood-and-three-ceos-from-echo-energy-tickets-49904628086?invite=&;err=29&referrer=&discount=&affiliate=&eventpassword=#loginbox

[ifthecapfits] 25/9/2018 16:22

Getting a bit lively there. Up, down, up, down...

[thomasthetank1] 25/9/2018 13:16

All - please see below a link to an interview with Andrew Knott, CEO
of SAVP, on Core Finance:

[mount teide] 25/9/2018 12:17

L2: just one MM left under 30.0p

[divmad] 25/9/2018 11:12

bushman1, do you have a link?

[thomasthetank1] 25/9/2018 10:29

Mirabaud comment on Niger - Exclusive article.

According to news agency Confidentiel Afrique, the Niger and Benin Presidents have given the green light to a new export pipeline which would ship crude ~2,000km from the Agadem basin in Niger to the Atlantic coast. The ~US$2.1bn pipeline will be built by CNPC and replaces an earlier option via Chad-Cameroon which has now been put on ice. Our understanding is a pipeline spur may also be built to deliver crude to northern Nigeria, where a new refinery is expected to be built in Katsina state, providing multiple off-take options. Construction work is expected to commence in 2019, with first exports in 2021. The news is important for Savannah (SAVP LN) as it appears to provide clarity around the Agadem export route, clearing the path for pipeline construction to begin. Moreover, the Benin route was always seen as the better option for Savannah with lower expected tariffs than the Chad-Cameroon option (which crosses multiple countries and involves connecting into an existing pipeline system).

[bushman1] 25/9/2018 10:07

Malcy interviewing Andrew Knott on Core TV this morning ( tweeted ).

[bushman1] 25/9/2018 10:06

Malcy interviewing interviewing Andrew Knott on Core TV this morning ( tweeted ).

[bushman1] 25/9/2018 10:05

Malcy interviewing Andrew Knott on Core TV this morning. ( tweeted ).

[thomasthetank1] 24/9/2018 20:44

Niger-Exclusive: Nigerian oil in the gates of the pipeline of the Chinese giant CNPC for its evacuation to Benin

hxxp://confidentielafrique.com/hydrocarbures/exclusif-niger-petrole-nigerien-vannes-de-loleoduc-geant-chinois-cnpc-evacuation-vers-benin/

The Nigerian government will launch December 2018 the construction of an oil pipeline for the evacuation of its oil. The infrastructure was entrusted to the giant China National Petroleum Corporation (CNPC), which has been extracting oil since 2011 in the Agadem (south-east of Nigeria). According to exclusive and authorized information obtained by Confidential Africa, the scheme now retained by the State which was suspending the former option (Niger-Chad-Kribi-Cameroon) is to evacuate oil to Benin, neighboring country. The decision was made according to our information, at the end of a tête-à-tête, between Presidents Issoufou Mahamadou and Patrice Talon, on the sidelines of the China-Africa Summit in Beijing at the beginning of September.

The Nigerian government is moving up a gear. Its oil will be evacuated to the neighboring country, Benin. This is the new scheme now adopted on the sidelines of the China-Africa Summit, by the two Heads of State, Mr. Issoufou Mahamadou, Patrice Talon. Exclusive information from Confidential Africa, after having spoken with official sources. The former option of evacuating Nigerian oil to Chad through Kribi (Cameroon) no longer enchants.

The construction of an oil pipeline for the evacuation of Nigerian oil, will be entrusted to the giant China National Petroleum Corporation (CNPC), which has been extracting oil since 2011 in the Agadem (south-east of Nigeria). According to exclusive and authorized information obtained by Confidential Africa, the start of work is expected before the end of December 2019. The investments of this mega project will require some 1200 billion Fcfa.

Niger, whose subsoil is rich in uranium and gold, became in 2011 a small oil producer with 20,000 barrels / day. Black gold is currently piped to Zinder (the center of the country), home to the refinery (SORAZ). This evacuation of Nigerian oil to the neighboring country, Benin, will bring a breath of fresh air to the dynamism of the economic ecosystems of the two countries. Presidents Issoufou and Talon understood the large-scale industrial challenge. Why this country attracts so many multinationals.

When London sniffs Nigerian black gold ...

Theresa May, the British Foreign Minister, on an African tour, has announced the upcoming opening of a British Embassy in Niamey. A decision that is not fortuitous when we know that the large energy company, Savannah Petroleum ensures the operation and management of 4 oil blocks in Niger. Thus, since the discovery of this oil manna, the Nigerian sub soil is coveted. India and China are not left behind. The British, a leader in the Nigerian energy sector, are taking the diplomatic route to preserve their assets and protect their interests. In our previous digital edition on Niger, titled: "Battle of Petroleum Titans on Highly Desired Blocks" revealed that the British energy company Savannah Petroleum held 4 oil blocks, or about 50% of the prolific surface of the Agadem Rift Basin. In addition, two other Chinese oil giants such as SINOPEC and ZHENUA have shown their willingness to integrate the black gold market in Niger. The Indians are also in the running through the ONGC company (oïl and Natural gas corporation) which aims to invest 75 million US dollars in the sector. Negotiations are in progress. The Indians are also in the running through the ONGC company (oïl and Natural gas corporation) which aims to invest 75 million US dollars in the sector. Negotiations are in progress. The Indians are also in the running through the ONGC company (oïl and Natural gas corporation) which aims to invest 75 million US dollars in the sector. Negotiations are in progress.

What arouses the appetite of this wave of foreign multinationals in search of the smallest drop of oil. In order to protect his interests in this country, London pushes the pawns. The head of the British diplomacy, Theresa May, during a stay in South Africa, announced the opening of an embassy in Niger. A country where its representation is ensured by a consulate.

In a context where Great Britain opts for strategic positioning, we can easily understand its appetites displayed.

[bushman1] 24/9/2018 18:53

Malcy : 34.30 mins in :

[bushman1] 24/9/2018 18:53

Malcy 34.30 mins in :

[bushman1] 24/9/2018 18:52

Malcy 34.30 mins in :

[zengas] 24/9/2018 16:27

Glad to see this mentioned again in the broker coverage. You might want to read this paragraph a few times to let the importance of it sink in -

"Longer term, leveraging off its dominant gas infrastructure position (only significant gas processing and transportation system in southeast Nigeria), Savannah is also well placed to tap new upstream opportunities at low cost in the surrounding area, where were is an estimated 40 tcf of discovered undeveloped gas resources."

Current take or pay is for some 25,300 boepd and the plant has a 200 mcf/d (33,000 boepd) capacity.

We will now will have full control of the Uquo gas processing plant as stated a few days ago in the RNS without any other party having an interest to hold back plans or decision making.

From the CPR

"The Uquo CPF has production capacity of 200 MMscfd, (33,000 boepd gas) and were designed and built by respected industry contractor Petrofac. The Uquo CPF is modular in nature, with the flexibility to add additional gas processing capacity."

"The Uquo CPF consists of two identical gas processing trains, each designed to process up to 100 MMscfd. One train has been tested at levels up to 120 MMscfd, and the Directors believe that the Uquo CPF, with limited optimisation, could operate at up to 240 MMscfd on a continuous basis. As such, spare capacity of up to circa 50 MMscfd is intended to be used by Savannah and the Investors as part of the development of the Accugas Midstream Business going forward". (40,000 boepd).

"There also exists at least 300 MMscfd spare capacity in Accugas Limited’s pipeline network" ie 60,000 boepd spare on top of 25,000 boepd current take-or pay.

Importantly if you remember back in July, agreement was signed on 7 critical gas projects to deliver 3.4 bcf/day by 2020 amongst them "cluster development of 5 Tcf (OML 13) to support the expansion of the seven energy Uquo gas plant."

5 TCF is circa 833 mmboe. We have currently about 150 mmboe 2P/2C gas.

In black and white the agreement is there to upgrade the Uquo gas facility from its current capacity. Will there be a future deal in the offing for SAVP at the supply level to take an interest with NPDC thus book more reserves?

If there is a huge increase in feed into the Accugas system it will be transformational imo and i'm sure Savp will want to get a part of that at supply level and would be a win-win for both up and downstream interests.