Savannah Petroleum Share Discussion Threads

[divmad] 19/9/2019 09:28

Judging by the frenetic level of tweets by SAVP in recent days, I would say events are starting to move much faster now and closing in on the deal completion.

[zengas] 19/9/2019 09:22

The courts as far as I know don't restart until Oct 1.

[diversification] 19/9/2019 09:19

When I look at previous SE updates, for example the one in May of this year they said: 'The Company continues to expect that the Transaction will complete during Q2 2019, which will be followed in due course by the publication of a Supplemental Admission Document.'This would of meant that from ministerial consent, if received on the same day, they anticipated that the deal could of been completed within 4 weeks. So it's now 5 weeks since we have received ministerial consent which must make the deal imminent?What am I missing?

[zengas] 18/9/2019 20:09

double post

[zengas] 18/9/2019 17:23

The thing is Div when AEI mentioned a 50% sale - maybe we are looking at/thinking of traditional oil companies as a farm in partner when infact it could be one of the huge investment conglomerates that buy in while Savp still run the show ?

Savp have certainly pulled together some major blue chip investors together, significant and complicated deal making in Nigeria re 7E - maybe with their traditional own investment banking experience/connections they will do something stellar partner wise for Niger ? They got a significant deal with AIIM (Old Mutual ) re Accugas and part sale of fields re the cash injection.

If Carlyle is interested (see above) in Chad then why equally not next door in Niger ? If they are to hand $1b to ex Tullow guys (as they have done before with other interests/partners) why rule out someone like this given we are talking low risk billion bl+ potential with infrastructure signed off.

Equally Warburg Pincus and others like them - ie not traditional oil companies but huge investment partners.

[divmad] 18/9/2019 17:11

You raise an interesting point there, Zengas. The issue of operatorship is a sensitive one. After all the preparatory work done by SAVp on their blocks, and the medium term plan AK has no doubt in mind for rapid development, would a large energy partner develop the assets as rapidly, if it was the operator? Eco never was the operator but did once have 40% of Orinduik, now 15%, but has no say in the speed of drilling next year. I suppose in the final analysis, the give up of being in control in Niger will only come at a hefty financial price demanded, with possibly a written undertaking by the farm in partner to develop the assets on a pre-agreed schedule .

[zengas] 18/9/2019 16:45

Some interesting AEI news just a few weeks ago and maybe more relevant now as we see US brokerage, Jeffries charged with conducting a farmout for Savp in Niger.

August 29th 2019 report said there are several companies after 40% of the Doba basin that Exxon held since 2000. One is Trident Energy headed up by the former Perenco CEO.

It also reports that the huge US asset management group Carlyle could be keen to get the fields and suggests that they might back a new project set up by former Tullow chairman Aidan Heavey and his brother-in-law Tim O'Hanlon who is the current VP at Tullow. Talk of the fields going for $300m with Exxon producing 12-13,000 bopd. Exxon consider the fields too mature and too small to be injecting anymore cash.

A slightly earlier report of 27th Aug 2019 (3 weeks ago) in AEI headlines

" Who has Carlyle tasked with it's plan to conquer the continent ? "

States quote "Carlyle is working on deals with first rate partners to explore untouched blocks or operate discovered reserves".

Also "Aidan Heavey's dream budget"

"One billion dollars! It is enough to have any newcomer to exploration in Africa sit up and take notice. According to our sources, this is the amount that the former "Tullow Oil CEO and founder Aidan Heavey is discussing with the energy bosses of American investment colossus Carlyle to be able to launch his project to build a new firm focussed on West African oil ( AEI 842). Heavey and his partner, former chief financial officer at Tullow Oil, Thomas Hickey, are in direct contact with Marcel van Poecke, a managing director for Carlyle International Energy Partners (CIEP), which focuses on the energy sector outside North America. After leaving the board of Tullow Oil in 2017, Heavey quickly set about going into business with former colleagues at the firm. His brother-in-law,Tim O'Hanlon, who is still a vice president at Tullow Oil in charge of handling thorny negotiations in Africa, may join his new adventure in 2020."

"Other targets
For the past few months, Carlyle has been looking to gain a foothold in several African oil producing nations. As we revealed ( AEI 836), the investment fund is particularly interested in a number of opportunities in Equatorial Guinea, a country where most majors are wanting to sell certain assets or simply pack up and leave, ExxonMobil for one. The American major would like to pull out of the country and its Zafiro oilfield, which both Trident Energy and Tullow Oil are keen to pick up (see here). Carlyle is also understood to be looking at assets in Congo-B, which is preparing a new bidding round, and in Chad."
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My own comment - Worth noting the huge investment conglomerate Warburg Pincus who have recently stomped up $600m for Trident Energy (mentioned above) to acquire deals.

Also previously reported that Heavey/Tullow execs tried to pick up the Savp blocks before they were actually awarded to Savp..

[zengas] 18/9/2019 16:38

Divmad re Jeffries - AEI said it was a minimum 50%.

Whether they've got that correct is anyones guess, but interesting they didn't put any figures out re cash though they say they've seen a document I believe that Jeffries must be using to potential farminees.

One thing I recall was that Savp wanted to remain operator. This was previously mentioned they would like to farm out 30-50%, but would any big fish like or want Savp to remain the bigger player and control the pace. Think ECO Atlantic, Tullow and Total in that order.

Interestingly ExxonMobil are next door in Chad and are one of the pipeline consortium owners there. Could they be attracted to Niger and basically virgin oilfields ?

[zengas] 18/9/2019 16:05

A study back in 2016 envisaged Savp getting into the Chad-Cameroon pipeline with CNPC.Savps share was a conceptualised 18,000 bopd but Exxon, Petronas, Chevron (who later sold out to the government) and others had a share of throughput in the 225,000 bopd pipeline.

Given that CNPCs pipeline will have no other major producers to share with yet and has a 200,000 bopd capacity before it can be increased with compression - surely could be an ample outlet for Savp and some others who might later join and much greater than the originally envisaged 18k bopd into the Chad-Cameroon pipeline.

[diversification] 18/9/2019 15:22

It's coming back to me now, the Indians. I was in this during suspension and invested for all the right reasons with Niger in mind which ended up with an RTO and you know the rest.I was naive at the time but knowing the security of revenue and the competence of the board, risk has now been removed from the 7E deal.

[divmad] 18/9/2019 15:01

Sorry, SAVp got it!

[divmad] 18/9/2019 15:01

Eco got this prime ARB acreage as a direct result of CNPC having to relinquish part of their licence area a few years ago. The Govt of Niger presumably deemed it unwise to grant them a virtual monopoly over the entire area at the time, no matter how successful they have been . And will can blame them?

[shareideas1] 18/9/2019 13:53

Previous press rumours last year suggested both the Chinese and Indian state oil cos were interested...

[diversification] 18/9/2019 13:52

Surely CNPC themselves would be most interested given total investment in the country?

[mount teide] 18/9/2019 12:46

Numis and Zengas are spot on - 2021/22 access to an high volume export pipeline to the global oil market and higher sales prices, offers SAVP the potential to rapidly accelerate the timescale for further exploration, development and monetisation of its Niger assets by attracting a serious deep pocketed partner. The employment of Jeffries to secure a 50% partner suggests the Board want to turbocharge future developments in this connection.

[honestmarty] 18/9/2019 12:42

No coincidence that farm out rumours,Jefferies involvement and Niger pipeline all arrive at once.

This pot is starting to simmer.

[divmad] 18/9/2019 12:36

Zengas, I recall a post from you about the Jeffries rns in which either you or Jeffries were seeking a farm in partner for at least 50% , rather than up to 50%. I can't find it now but do you remember it?

[zengas] 18/9/2019 12:15

The pipeline capacity is away much better than i thought.

I believed it was around 100k bopd capacity but Mirabuad state it will have an "initial capacity of 200k bopd", expandable with compression.

While i don't know how much it would do with compression, it tallies in some part with Nigers intention to become an Opec member and 500k+ bopd production in the next 5 years.
Oil has been found in the North of the countryry (Kaffra by Sonatrach near the Algerian border).

This is getting very interesting because if Savp get 10-20% capacity of a 250k bopd pipeline this would be a huge value driver on top of it's Nigeria operations.

In addition Savp are expected to supply 5k bopd to the Zinder refinery.

The 100k+ bopd refinery at Mashi in Katsina state would unlock more potential and this is already endorsed by President Buhari of Nigeria (who is from Katsina). The intention is to build it once an oil supply is agreed and a further likely sales outlet.

Up to $10m/yr free cash flow per 1k bopd was expected to be possible dependent on long term oil prices.
25k - 50k bopd output from Savp in Niger could provide significant free cash flow on top of Nigeria operations.

Niger farm in potential has to be looking much more attractive and perhaps why Jeffries has been employed to seek out the best possibilities for one.

[shareideas1] 18/9/2019 11:59

Good luck to them trying to buy below current market prices...

[mount teide] 18/9/2019 11:00

Someone wanting to accumulate in volume at these prices - 1.0 million plonked down on the bid side of the book ( 3 x 250,000, 1 x 150,000 and 1 x 100,000) at prices between 23p and 24p.

[thomasthetank1] 18/9/2019 10:05

All - please see below a note from Numis today.

SAVANNAH PETROLEUM (BUY, PT 41p/sh) – Niger oil export pipeline progress – positive. The President of Niger’s twitter feed is highlighting that he attended the ‘first stone’ ceremony marking the start of construction of the PetroChina-led oil export pipeline (that will be 1892kms long and will take crude oil from PetroChina/Savannah’s prolific oil fields in S.E. Niger via Benin to the Atlantic coast). This follows an announcement on Monday of this week (that was seemingly lost to the market amidst the Saudi oil production loss news) that PetroChina had signed contractual terms for the Niger side of the pipeline, which in turn followed a similar announcement a month earlier confirming contractual terms between PetroChina and Benin for the pipeline – i.e. great progress has been made on something that a few months ago was considered by most to be literally ‘a pipe dream’. For Niger it is extremely important - it means ~$7bn of investments, major job creation and becoming a significant oil exporter. The project is also very significant for Savannah as it will provide a pathway for it to monetise its Niger oil resources way beyond what is possible from simply selling into the (limited scale) domestic market. For context, simply assuming that the 146 prospects that Savannah has currently identified on its acreage (following 5/5 exploration successes in 2018) each have a modest 8mmb of prospective recoverable oil, then the implied potential unrisked value to Savannah is 115p/sh (as in our initiation report published yesterday ‘Ready for Liftoff’). Our current ‘Discovered Resource NAV’ PT is 41p/sh and for now includes none of this upside.

[thomasthetank1] 18/9/2019 09:26

All - please see below a note from Mirabaud today.

Further to Monday’s news, CNPC has officially started construction of its Niger-Benin oil export line. At a ceremony in Agadem yesterday to mark the event, Niger’s President, Mahamadou Issoufou, laid the “first stone” of the surface infrastructure works for the project, which will unlock more than 1bn bbls of oil discovered to date in the basin. The pipeline will have a total length of 1,892km, of which 1,298km will be in Niger and 684km in neighbouring Benin. Overall, CNPC and its partners are expected to invest close to US$7bn building the export pipeline and developing 109 oil discoveries with the drilling of 430 wells. The project will have significant benefits for the host nation as well as other operators in Niger – most notably Savannah (SAVP LN) – which has made 5 oil discoveries in the basin and holds contractual rights to access the new infrastructure.

[honestmarty] 18/9/2019 09:24

SL

Thanks

[stockport loser] 18/9/2019 09:22

Depends the liquidity of the stock and the market size. If you put in a number of buys with a limit on them your trades won't push the ask, if you look on L2 you can see what is on offer to sell at what prices also.