Savannah Petroleum Share Discussion Threads

[ngms27] 05/10/2016 08:01

Normally you would use 2D to find any interesting structures then use 3D to define structures found on 2D in greater clarity.

Many prospects are drilled on 2D alone.

[divmad] 04/10/2016 17:40

Is it a straightforward answer that 3D seismic is always preferable to 2D seismic, even allowing for the additional costs involved? I presume SAVP would not contemplate 2D in Niger if it had the choice, which it does now in Block R3.

[zengas] 04/10/2016 08:22

From Africa Intelligence article (subscription)

4-10-2016

The only company active in Nigeria apart from CNPC and Sonatrach, Savannah Petroleum is winning sweeteners in its contracts with government.

The general manager of Savannah Petroleum, Andrew Knott will be flying to Niamey early this month to join with oil minister Foumakoye Gado in formally ratifying two decrees modifying the firm’s production sharing contracts. The decrees were adopted by Niger’s cabinet in early September.

The amendments reduced the work commitments of the British junior, which operates the R1, R2, R3 and R4 licenses in the Agadem basin.

Savannah is no longer obliged to start with a 2D seismic survey before moving on to 3D.

As a result, it launched a 3D survey directly at the end of September on block R3, retaining China’s BGP for the operation, and plans to start drilling early in 2017.

In addition, Savannah is expected in coming weeks to confirm an agreement with Niger’s government to buy into the Niger Oil Transportation Corp (NOTCO). The firm, set up to build and operate Niger’s section of the Niger-Chad-Cameroon pipeline, was formed in early 2015 to export crude from Agadem.

NOTCO’s shareholders include China National Petroleum Corp (55%), Chad’s government (5%) and that of Niger (15%).

Until recently the remaining 25% was owned by the private firm Niger Energie Services dropped from the project because it didn’t have enough money to pay its share.

One of NES’ stakeholders is reportedly Nigerian businessman Alhaji Dahiru Mangal who owns the oil firms Labana and Advantica Gas & Energy whose licenses in Niger were recently withdrawn.

As a partner in NOTCO, Savannah clearly hopes that work on the pipeline, conducted by CNPC Exploration & Development Co (CNODC) can get off to a quick start.

Elsewhere, Savanah is expected to win from the adoption of a new oil code the authorities are drafting by the end of this year at the behest of the World Bank.

The new legislation will allow it to obtain a two-year extension of its PSC instead of the current one year.

[steelwatch] 28/9/2016 21:23

All early stage explorers lose money until such time as they actually produce sufficiently. The loss per share is miniscule for the half year.

[divmad] 28/9/2016 21:15

Thx steelwatch, I was being lazy by copying over the earlier poster's number.

No matter, I am still perplexed by the possibility of a loss crank-up next year. I guess that's where a farm-in partner will come in very handy.

[steelwatch] 28/9/2016 21:11

Divmad - Accounts stated all in US$, not £

[divmad] 28/9/2016 20:39

What I don't get is, if SAVP lost £4.3mn in an activity-light period ending June 30th, what will be the drain on cash in 2017 when the engines get cranked up?

[bushman1] 28/9/2016 08:24

Hi Thomas, well spotted, thanks for posting both broker notes.

[thomasthetank1] 27/9/2016 10:07

Hi guys,

Another positive note on Savannah's HY Results today from WH Ireland.

Savannah Petroleum (SAVP LN) – 1H Results

The company raised $40M in July. 3D seismic acquisition is being acquired in the company’s R3 PSC Area with exploration drilling expected to commence in 1H17. The company indicated it anticipates a farmout prior to the commencement of drilling. The company has no debt and had limited cash prior to the fundraise. The company reported a loss of £4.3M in the period. In our opinion, Savannah remains one of the most exciting oil & gas companies listed on AIM, we like the assets, the management team and the balance sheet.

[thomasthetank1] 27/9/2016 08:57

Morning all - Thought you might like to see Panmure Gordon's take on this morning's Half Year Results announcement.

PANMURE GORDON

Savannah Petroleum – Interim results (SAVP LN, Mkt cap: £83m) – Positive

Savannah reported a 1H16 net loss of US$4.3m (1H15 loss of US$3.0m), which included a tax charge of US$0.8m (1H15 nil). The loss per share fell to US$0.01 (1H15 US$0.02) reflecting the impact on the share count of the equity raise in 2H15 in connection with the acquisition of the R3/R4 PSC in Niger. Cash operating costs were flat YoY, with Savannah highlighting its cost discipline. Cash used in operations increased to US$5.5m (1H15 US$3.1m) but net investing fell sharply to US$1.6m (1H15 US$5.4m). Cash ended the half at US$0.7m (YE15 US$7.8m), ahead of the successful US$40m placing in July. Savannah advises that it expects the seismic acquisition programme to be completed in early 2017 with processing to commence during acquisition in order to optimise timing. The company expects to start exploration drilling in 2017. Discussions on a farm-out with potential partners is ongoing and Savannah expects any transaction to be announced prior to the commencement of exploration drilling. Savannah is also holding a capital markets event in November. Critical to the buy case for Savannah is that it begins to physically prove the prospectivity of its acreage through the drill bit. The company is now funded to begin that process with or without a farm-out. However, the implication of the company’s statement would suggest that a farm-out announcement is likely ahead of drilling, which suggests that the process is advancing. Our current valuation approach assumes that Savannah is able to achieve a farm-out of 30-50% of its Nigerien acreage position raising US$250m, which supports our 70p/share Target Price. However, should the acreage prove as prospective as currently guided, it is easy to generate value multiples above the current share price. Savannah has a variety of near term catalysts that could drive investor interest; reiterate Buy.

[zengas] 27/9/2016 07:17

3D seismic commenced on R3

"c.800km2 3D seismic survey operations commenced over part of the Company's R3 PSC Area, aimed at providing enhanced definition over 12 existing mapped exploration targets and the identification of new targets not currently mapped on existing 2D seismic dataset"

Given that the new seismic won't be completed until new year, what "significant update" do they expect to announce in November at the Capital markets event ? Farmout partner ?

[bushman1] 19/9/2016 21:47

Divmad, to mention - and for general information - Jessica Hostage would welcome any queries on Savannah.

Her email : [e-mail]

[bushman1] 19/9/2016 21:05

Hi Divmad, a pleasure. The meeting was attended by about 80 to 100 pax.

I got the impression all is proceeding well regarding the intended seismic programme ; it's interesting to read from the presentation ' The Ministry of Energy and Petroleum has indicated to Savannah that it expects exports to commence in 2016/17 '. As noted earlier, Jessica Hostage advises it will be 2017.

A few interesting pieces of information on the ' CGG Prospective Resource Update ' :

* CGG Robertson has upgraded its' proprietary statistical " yet to find " best estimate mean gross prospective risked resource estimate for Savannah's licence to 2.2 bn bbls, from 1.2 bn bbls.

* This upgrade reflects the incorporation of R3/R4, the significantly enhanced technical data set obtained and Upper Sokor formation volumes.

* CGG has also audited 12 example targets from Savannah's updated lead and prospect inventory :

~ 10 targets similar to existing, proven play discoveries in the basin located in the R1, R3 and R4 licence areas.

~ 2 targets aiming to terst unproven plays, located in R2.

*CGG has assessed the proven-play targets to :

~ contain an aggregate c 494 mmbbls of unrisked mean recoverable resources

~ carry a low technical risk profile

* CGG has assessed the unproven-play R2 targets to :

~ contain an aggregate c 407 mmbbls of unrisked mean recoverable resources

~ carry a low technical risk profile ( Jimna ~ see map on presentation link kindly posted by ZENGAS) and a high technical risk profile ( Koro )

[divmad] 19/9/2016 17:23

Yes, thank you, bushman1. How well attended was the meeting?

Is it your sense that SAVP is still on schedule for seismic?

[zengas] 19/9/2016 10:50

Thanks bushman1, very much appreciated.

[divmad] 17/9/2016 13:24

2 presentations in ten days - Shore Capital and Proactive - yet no posts anywhere! Totally off the radar of PIs, this one.

[zengas] 15/9/2016 09:51

I would have thought that regardless of the new 3D seismic addition, they would be making plans for drilling some of the 14 drill ready prospects they have already fully covered with 3D.

[divmad] 14/9/2016 17:38

Seismic activity first though.

I got this standard reply from their IR desk last week:

"In terms of timing, we are in the process of mobilising a 3D seismic crew and acquisition is expected to commence shortly."

[zengas] 14/9/2016 11:09

Agree, once we get confirmation/closer to drilling, interest should pick up. Always the possibility of farmout news even though they are cashed up with $40m.

[gray1107] 14/9/2016 09:17

Bit of a sleeper until closer to drilling.

[divmad] 13/9/2016 17:22

Does anyone care about SAVP?

[divmad] 08/9/2016 13:55

I understand hat Savp is presenting today at Shore Capital. Anyone here going?

[flyingbull] 30/8/2016 14:31

August was a good month for the oil price. The challage is on for September!
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