Savannah Petroleum Share Discussion Threads

[thomasthetank1] 12/12/2019 15:18

All - link to an interview between Andrew Knott, CEO of SAVP, and Malcolm Graham-Wood of Malcy's blog below.

[buffythebuffoon] 12/12/2019 08:53

hxxps://audioboom.com/posts/7448795-savannah-petroleum-john-meyer

Buffy

[stockport loser] 11/12/2019 16:40

Nope back for the last hour to decimate the SP, what's the point...

[homebrewruss] 11/12/2019 15:58

Andrew Knott on today's vox podcast apparently (not listened):

[nametrade] 11/12/2019 14:34

Divmad,

Free cash flow assessed at being approx. $130m from 2020 to 2023
Production up 33% year on year.
debt reduced by $40 million

If this isn't showing a picture of improving revenues and growth....what does it show?

The Mcap is below where we were at the beginning of the year...

[nametrade] 11/12/2019 14:33

sorry wrong thread

[stockport loser] 11/12/2019 13:25

The bots gone or given the day off?

[sunbed44] 11/12/2019 13:01

niger cpr and ops update next pal

[divmad] 11/12/2019 11:59

News will be incremental here, with each RNs adding to the value creation. Next step: one or more gas customers so investors can start to build a picture of improving revenues from the Nigerian side moving into 2020.

[shareideas1] 11/12/2019 11:49

Ultimately it's all about flow... with bond holders potentially selling down (as to why - clue is in the name), UK elections tomorrow keeping buyers on sidelines and carnage brought on by Tullow I think we just need to consolidate a little before moving onwards...

[nametrade] 11/12/2019 11:44

Good update but still trading lower than yesterday morning.
What does this market want from SAVP?

[shareideas1] 11/12/2019 10:19

Optimistic re tomorrow but within a week most likely...

[sunbed44] 11/12/2019 10:05

all aboard next stop twenty five after niger cpr tomorrow candy off babies

[gmr64] 11/12/2019 08:57

Barclays NOTE:
Our view: The updated Nigerian reserve/resource estimates and broader update contains no material surprises and gives us greater confidence (at first glance) in our current 37p/shr Tangible NAV. With the transaction now complete, Savannah can begin delivering on its plans to expand its customer base for gas in Nigeria, which should provide upside to the already attractive cash flow profile management are presenting for the assets. We rate the stock Overweight.
Key data points from the CPR and operating update :
Reserve and resource estimates consistent with prior guidance: Updated gross 2P reserves of 99.6mmboe (84% gas) and 2C resources of 98mmboe (100% gas) are consistent with the previous end-December 2017 CPR aside from adjustments for production and applying an economic cut-off to gas reserves.
• ?Nigeria assets to be FCF positive: Savannah has published CPR expected net free cash flow estimates for the Nigerian assets averaging ~$129m/yr during 2020-23. Cash collections are estimated to total $190m in 2019, funding operations and debt service.
• ?Inherited debt slightly lower than we assumed: Estimated end-19 gross debt held by the Accugas subsidiary of $402m is lower than the $455m we had assumed. The $109m gross debt held by SUGL is in line with our estimate. Savannah expects total leverage within the Nigerian assets to have declined by ~$40m during 2019.
• ?New gas customers targeted: Contractual take-or-pay gas volumes of 129mmcf/d in 2019 should increase during H1/20 with the addition of the Alaoji power station (subject to technical and commercial workstreams), while Accugas expects to announce the addition of further new customers in the coming months.

[mount teide] 11/12/2019 08:24

'Production is anticipated to increase significantly in 1H 2020 after the addition of the Alaoji power station as a new Accugas customer (following completion of the relevant technical and commercial workstreams). Accugas also expects to be able to announce additional new customers over the course of the coming months.

2020 Forward Plans
As part of the ongoing gas field development plan at Uquo, in 2020 Savannah plans to drill and complete a gas production well, recomplete an oil well as a gas producer and to work over one of the current gas production wells at an estimated cost of US$34.5m. The well operations are expected to commence in H1 2020 and in addition c. US$7m is intended to be invested by Accugas for continued facility upgrades.'

[thomasthetank1] 11/12/2019 08:15

Numis note out today.

SAVANNAH PETROLEUM (PT 41p/sh) – Nigeria reserves report publication – positive. Savannah have published an updated CPR (competent persons report) for its recently acquired Nigerian assets – the Uquo gas field, the Stubb Creek oil and gas field and the Accugas gas pipeline line network. The key points are positive: 1) Gross 2P reserves of 99.6mmboe are optically in-line with our published figure of 99.6mmboe, but in reality are higher that our figure since our number refers to an end 2018 estimate, whereas today’s published figure is as of Dec 2019. Adjusting for 2019 production, the published reserve figure of today is ~6% higher than we expected, (due in part to client underlift). 2) The reserve auditor has made an NPV10 (i.e. using a discount rate of 10%) estimate for the assets of $1.2bn on a gross basis, and $924m net to Savannah. Own calculation of $867m uses a higher discount rate (15%) and higher oil price assumption but is close enough to give us confidence that our modelling is sensible and that no major changes have occurred in the revenue, cost and capex outlook for the assets since the Dec 2017 original announcement. 3) The auditor has also provided FCF generation forecasts (for the Nigerian assets) that average $130m p.a. from 2020-23 assuming minimum contract quantity gas sales. This is consistent with our own forecasts after adjusting for our higher gas sales forecast (mid-way between min and contracted quantity) and our higher oil price assumption. 4) Gross production of 17.3kboe/d ytd in Nigeria, with 88mmscf/d of gas production, consistent with our expectations. 5) 2019 will see a $40m reduction in Nigeria level total debt and the Nigerian Assets will have at least $15m cash by year end. 6) Capex plans for Nigeria in 2020 are for $41.5m worth of gas well drilling and workover on the Uquo field, to ensure adequate deliverability is in place for an expected 1H 2020 production increase to supply a new contract at the Alaoji power station, and also to supply aspired for new smaller scale (but higher unit value) industrial customers. This is higher than we had modelled but is a clear positive for medium term gas sales. Valuation: Our 41p/sh Discovered Resource NAV is almost double the current 21p share price (using 15% WACC) and even at a more conservative $50/bbl Brent, this NAV would still be 34p/sh, with significant further upside. We think today’s CPR underscores that the newly acquired Nigerian assets are generating significant cash flows, are paying down debt and have plenty of near and medium term scope to grow volumes.

[mount teide] 11/12/2019 08:01

Highly encouraging update - the Nigerian assets are a seriously undervalued cash cow with huge production development potential, capable of paying off the debt within 3 years.

[canigou2] 11/12/2019 07:56

Undervalued!!

[zengas] 11/12/2019 07:53

From the CPR Dec 2019
Nigeria
2P Net = 80 mmboe
2C Net = 78 mmboe.
2P NPV = $945m (Does not include Stubb Creek 2C).
Outstandindg debt reduced by $40m to $409m.
Year end cash in Nigerian Subsiduaries assets = $15m.
Net free cash for 2020 expected = $104m based on take or pay (not DCQ) from 3 main customers only (Ibom, Unicem & Calabar).
Calabar gas pricing increases by 43% over next 4 years
Production anticipated to increase significantly in H1 2020 with Alaoji Power station.
New customers also expected to be announced over the coming months.
That should increase the net free cash significantly over the $104m TOP level.

My interpretation is $74m in from recent deal completion + $15m = circa $89m cash - less some costs for deal completion.

Looks pretty good and new customers and Alaoji will really change the numbers above from H1 2020 onwards (also Stubb Creek oil debottle necking from 3,000 to 5,000 bopd happens in 2021)

[zengas] 11/12/2019 07:46

Dec 2019
Nigeria
2P Net = 80 mmboe
2C Net = 78 mmboe.
2P NPV = $945m (Does not include Stubb Creek 2C).
Outstandindg debt reduced by $40m to $409m.
Year end cash in Nigerian Subsiduaries assets = $15m.
Net free cash for 2020 expected = $104m based on take or pay (not DCQ) from 3 main customers only (Ibom, Unicem & Calabar).
Calabar gas pricing increases by 43% over next 4 years
Production anticipated to increase significantly in H1 2020 with Alaoji Power station.
New customers also expected to be announced over the coming months.
That should increase the net free cash significantly over the $104m TOP level.

My interpretation is $74m in from recent deal completion + $15m = circa $89m cash - less some costs for deal completion.

Looks pretty good and new customers and Alaoji will really change the numbers above from H1 2020 onwards (also Stubb Creek oil debottle necking from 3,000 to 5,000 bopd happens in 2021)

[shareideas1] 11/12/2019 07:46

Niger within the next week with update on plans there (and EPS)... then maybe a new contract in Nigeria (before YE?)... then supp admission docs in new year... farmout and eps in H1, dividend/buyback in q2... lots to come

[bushman1] 11/12/2019 07:45

Its a good CPR. Next, Niger CPR to follow which will be a further boost. Then the Accugas new customer update. All catalysts' for a solid share price moving into 2020.

[shareideas1] 11/12/2019 07:34

Debt position a pleasant surprise at first blush

[thelung] 11/12/2019 07:31

That news might stop the drop this morning