Savannah Petroleum Share Discussion Threads

[bad gateway] 08/3/2018 14:12

Yes shame he wrecked it somewhat by also tipping zenith energy and claiming it was debtfree and overlooked by the market.
Thats his cred out the window.

[flagon] 08/3/2018 11:21

SAVP recommended by Gervais Williams of Miton -

Link ->

[rampair] 08/3/2018 11:16

Interesting. MT that’s always a good sign that some shorts have decided to close.

Thanks,
R.

[mount teide] 07/3/2018 14:46

Euroclear's latest Stock on Loan report published yesterday saw the total short position drop a huge 54% from 5.36% in January to 2.47% in February.

[soultrading] 06/3/2018 19:53

and could be considerably more depending on the find. Thanks for the info. I have no idea why this was not on my watch list before. It seems to have a very good chance..

[honestmarty] 06/3/2018 19:49

The declared position is that drilling is to start in Q1.
The company have not announced anything to the contrary, so I can only assume we will get a spud date RNS in the next few days.
I understand that they are presenting at a conference next week so hopefully news before that.

Drilling by the end of March, completion of takeover in April and drilling results by May.

Should be worth 50p if oil discovered.

[soultrading] 06/3/2018 19:34

Does look good this and hopefully some updates soon

[soultrading] 06/3/2018 13:50

Replace the xx with tt

[gersemi] 06/3/2018 13:48

-

thanks again to soul-trading. obliged fella

[honestmarty] 06/3/2018 12:43

Had they anything of value to add?

[soultrading] 06/3/2018 12:36

Tipped in UKInvestor magazine

[nen2319] 06/3/2018 11:32

Looks like the buying has started. Fasten your seatbelts guys! Could this be finally the time we actually drill as promised?

[honestmarty] 06/3/2018 10:48

The first drill is due to start in less than 4 weeks.
Anyone heard from company about a spud date.
I think all of the trades today are buys, as earlier offer was below mid.

I suspect positions are being taken in advance of a spud date.

Could be an easy 30 percent rise even before we got the black stuff

[lithological heterogeneities] 05/3/2018 16:54

It's up to Jen

[honestmarty] 05/3/2018 16:44

I assume we will hear a date to start drilling or a further delay this week?

How long will it take to mobilise a rusty Chinese rig? Weeks, possibly months?

[buffythebuffoon] 02/3/2018 15:05

I don’t think putting money into a company that is drilling three wells on trend with other assets that have produced a 93% success rate is gambling.

I like the Nigeria assets, but the response to success will be much less than it would have been.

On balance, as an investor intending to hold these for no less than 2years, assuming we don’t become ridiculously overvalued, I prefer the way we are structured now. I am, however, wary of AK overstretching us with all the ‘attractive217; deals out there.

Buffy

[rampair] 02/3/2018 15:02

Thank you to all posters giving explanations of the company, I did my own research but you always wonder if you have it correctly, Buffy, thanks for the confirmation!

I think a lot of funds and individuals holding bonds are moving holdings about.

I personally think that I prefer some underpinning of risk so this structure helps.
Zengas - the analysis was useful. As were the Mirabaud calculations.

R.

[mount teide] 02/3/2018 13:51

Good explanation of the difference between investing and gambling!

[zengas] 02/3/2018 13:33

Can't see why some have a problem with the upside potential ?

This is only the initial 3 well drilling and risked and would open more of the vast potential of the 2.8 billion bls.

They are valuing the risked upside at 12p (32p unrisked).

There's 817m shares in issue now so if you use the 274.6m there was prior to the deal, (ie 2.975 X) it would be 35.7p risked and 95p unrisked pre the Nigeria deal with no other asset to fall back on or underpin it.

As it stands the company is underpinned by Nigeria and at a discount, generating cash and estimated to pay a 3.5% dividend yield - which was not there before.

I know the option I prefer when it comes to risk.

[lithological heterogeneities] 02/3/2018 13:07

the note has done wonders for the sp

[buffythebuffoon] 02/3/2018 12:32

Hi Rampair, we do indeed have a world bank guarantee, albeit a partial one.

Buffy

[gmr64] 02/3/2018 12:26

Positive note from Mirabaud today:

Following a 6 month absence, during which it secured the RTO (reverse takeover) of assets from Seven Energy, Savannah Petroleum recently returned to trading on AIM. The company bears its old hallmarks, with the Niger exploration assets likely to take centre stage over the coming weeks. However, the business has diversified and matured through the Seven deal. Now the 8th largest London-listed E&P by production volumes, Savannah will boast over 90 mmbbls of 2P reserves, 21 kboepd of net production, and has committed to returning cash to shareholders via a dividend scheme.

Lining up alongside the exploration portfolio, Savannah’s new Nigerian assets include stable, low cost oil and gas production, and a carried interest in a major strategic gas processing and distribution network in the southeast of the Niger Delta. Unlike all of Savannah’s Nigerian focussed peers, the portfolio is 90% gas with long term, secure, take or pay contracts (92% of sales are expected to be to investment grade customers). In our mind, this mitigates against the key risks of operating in-country; those being security of payments, and the threat of oil bunkering and sabotage. Crucially, Savannah’s gas sales agreements also allow for a highly predictable cash flow stream, largely insensitive to volatility in commodity prices, which clearly makes budgeting, including returning cash to shareholders, far more straightforward.

Importantly, Savannah is now underpinned with cash flow, and benefits from material near term catalysts, which we believe will see the stock recover strongly (today the company is trading at a substantial 27% discount to Core (2P) NAV alone). The dust is now settling on the Seven transaction, and over the coming months trading statements and operational updates should provide confidence in the company’s ability to meet strong cash flow forecasts. On our numbers, Savannah is set to generate US$74m of EBITDAX in FY18, rising to US$125m in FY19 – more than sufficient to support a healthy dividend (a total payout of US$12.5m is intended to be announced later this year, equivalent to a 3.5% yield), as well as capex budgets with respect to production growth in Nigeria and exploration and appraisal in Niger. These filter through to net profits of US$43m in FY18, rising to US$70m in FY19. At today’s share price this is equivalent to underlying EV/EBITDAX ratios of just 4.5x and 2.7x, respectively, and P/E ratios of 9.7x falling to 5.9x, making the stock highly attractive on multiples alone, ignoring any medium term growth and exploration upside.

With regards to exploration upside, the back to back drilling campaign in Niger is set to kick off before the end of March, with results due out c.30 days post spud. The campaign is centred in a sweet spot where CNPC has recorded a 93% success rate (higher than its basin wide success rate of 75%), and with Savannah targeting analogous prospects, with a drilling rig and crew also used by CNPC, the odds of positive drilling news are stacked in Savannah’s favour. For what it’s worth, we value the three wells at 32p/shr (unrisked), however the significance of a successful campaign goes well beyond the three wells as it would materially de-risk the 2.8bn bbls of net prospective resource (risked) across Savannah’s Niger acreage, estimated by auditor CGG.

We re-initiate coverage with a BUY recommendation and an updated target price of 55p/shr – offering 95% upside. This is underpinned by 43p/shr of risked Core & Development value (Nigeria, plus corporate adjustments) and 12p/shr of risked exploration upside attributable to the three well campaign in Niger.

[rampair] 02/3/2018 12:06

I believe the World Bank has guarantees in place ( from memory, don’t shoot if wrong!)
Pretty good odds, read the note and it is a decent risk from here

Be nice if we do get paid!!

R