Share Name Share Symbol Market Type Share ISIN Share Description
Savannah Petroleum Plc LSE:SAVP London Ordinary Share GB00BP41S218 ORD GBP0.001
  Price Change % Change Share Price Shares Traded Last Trade
  -0.65 -2.81% 22.50 1,400,655 13:09:55
Bid Price Offer Price High Price Low Price Open Price
22.30 22.90 22.90 22.10 22.70
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers -19.30 -2.35 198
Last Trade Time Trade Type Trade Size Trade Price Currency
13:09:55 AT 50,000 22.50 GBX

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Date Time Title Posts
21/11/201911:39◄ SAVANNAH PETROLEUM PLC ►4,990
15/11/201910:42Savannah Petroleum Plc806
25/9/201809:07Savannah Petrolium8

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DateSubject
21/11/2019
08:20
Savannah Petroleum Daily Update: Savannah Petroleum Plc is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker SAVP. The last closing price for Savannah Petroleum was 23.15p.
Savannah Petroleum Plc has a 4 week average price of 22.10p and a 12 week average price of 21p.
The 1 year high share price is 32.90p while the 1 year low share price is currently 11.60p.
There are currently 879,769,427 shares in issue and the average daily traded volume is 4,274,686 shares. The market capitalisation of Savannah Petroleum Plc is £196,188,582.22.
16/11/2019
14:38
bushman1: The below an excellent post from the other bb : Like yourself Agadem I am completely perplexed at yesterday's share price response to deal completion. I am no expert on MM tricks and share price manipulation, but watching the trades over the last few weeks I have noticed on countless occasions very small A trades appearing after some decent buying occurs. Multiple trades of less than 100 shares can drop the price by 2 or 3 %. Yesterday saw some good buying pressure but those A trades appeared again. Why is anyone's guess. I wasn't expecting a huge immediate re rate, but I thought the mid 30s were a sound bet. I myself brought in just before the 2018 drilling campaign started. I am astonished that I can now buy shares cheaper than i could back then. When you consider since then we have had 5/5 successful drills in Niger. All drilled under budget and on schedule. We now have 2 routes to market from Niger. The CNPC pipe line deal opens up a massive export route for the company. Since then the 7 deal was improved significantly, and has finally been completed. Fundamentally SAVP has never been in better shape ! Highly cash flow positive Gas operations in Nigeria, with great potential for expansion support the company drilling a highly prolific basin in Niger which now has 2 routes to market. The fundamentals now are excellent. And when the market wakes up, I expect a steady re rate to 35 - 45p.
15/11/2019
08:22
thomasthetank1: Comment from Numis Securities SAVANNAH PETREOLEUM (BUY, PT 41p) Completion of Seven Energy Transaction – Positive. Savannah has announced the completion of its acquisition of assets from Seven Energy this morning. As expected, SAVP has received $54m from AIIM (African Infrastructure Investment Managers) and SAVP will receive a further $20m from debt holders (in return for the 26.6m new shares issued). As discussed in detail in our initiation report (17 Sept 2019) SAVP gains control over a Nigeria ~20kboe/d integrated gas position (with oil production also) that is defensive against oil price changes and has significant growth opportunities based around leveraging its high barrier-to-entry infrastructure position that is uniquely placed to monetise large amounts of nearby onshore gas. 116.6 million new shares have been issued as part of the transaction as expected and application to AIM has been made for 90.66 million shares to start trading, which is expected to become effective on 18th Nov, with the remaining 25.9 million expected to be admitted around 21st Nov. We already include this increased diluted share count in our NAV calculations. Deep value...: Our 41p/sh Discovered Resource NAV for Savannah is still ~50% above the current share price (using 15% WACC and $75/bbl) and even at a more conservative $50/bbl, this NAV would still be 34p/sh, with significant further upside: we see material further potential valuation upside from: 1) de-risking 1bn bbls of Niger prospects (worth an estimated 115p/sh on an un-risked basis); and/or, 2) from increasing Nigeria downstream gas sales via the currently under-utilized Accugas pipeline network, worth up to another 31p/sh.
11/11/2019
19:13
diversification: Many scenarios for why the share price has been held back, but fundamentally, until the transaction is complete or key milestones are passed to completion, we will be at the mercy of the bots that have a grip on the share price. A massive positive, the higher the price is between now and completion, the faster the rerating will be to fair value. Not to mention, the lower the dilution will be for the $20m injection and new tranche of shares. Unbelievably relaxed to see how this plays out, and extremely excited to be part of it.
11/11/2019
10:55
zengas: In the not too distant future Savp will be producing/selling oil in Niger. The 5 discoveries of some 50m barrels are not even in the price yet when the Nigeria deal was conducted at 35p. Broker estimate of 80-90p before any further growth. There's some 2.8 billion bls of already risked, mid case recoverable oil potential on the Niger blocks. $1/b finding cost versus a $4-$6 barrel price (Over $10 billion worth of already risked target value). 100% drilling success so far with an average to date in the basin of over 75%. Chairman has highlighted the expectation of multiple, repeatable low risk success expectation. Over 140 drilling targets, mostly analogous and in very close proximity to existing discoveries. Imo ongoing exploration success in Niger should add at the very least 100p (ie $1.3b+) on only 10-12% of the known potential - there's not many opportunities anywhere where you can get such low cost drilling on multiple repeat low risk exploration as high as over 93% in places (Savp first 5 = 100% and in turn derisking multiple other prospects). Savp will be a producer in 2 countries. Access to major Niger export pipeline expected through existing PSC infrastructure agreement. Capacity of circa 200k+ expandable bopd with CNPC initially targeting 90k bopd + a nummber of other possible additional sales routes. From the results that the CEO said anyone new to the company should read (Vox markets interview last week) - "The Accugas infrastructure has significant spare capacity and is the only major infrastructure of its type in South East Nigeria;" "we therefore see strong growth potential going forward through the acquisition of new gas fields and customers." (He mentioned they would be in a position to announce at least 1 new customer in the coming months). "Outside of the Seven Assets, we also see strong potential to access new oil-focused growth opportunities in Nigeria over the medium term". He also mentioned in VOX that he expected 'more and more opportunties to come and acquire assets. I expect that to be a significant source of future value creation'. 80-90p mentioned before any growth prospects (Doing up to $150m/yr cashflow post deal + Niger to come into production/cash flow). 100p imo for circa just 10-12% of the Niger risked recoverable potential. This is what they plan to get back to post deal completion. New gas contract customers replacing high cost diesel = ?? p. 30p tied up in Accugas debt - as that reduces, to turn positive and add to the share price. Any further acquisitions as mentioned in the interviews/presentations = ?? p. He said they were in a unique position backed by so many blue chip institutions as investors. When you consider the sum of the parts and the scale of the opportunity you could see why it has attracted such a large institutional base to back this company and whose average over the combined placings is in around the 40p level.
22/9/2019
10:31
zengas: Some facts from the CPR and thoughts on broker note. Accugas distribution capacity 600 mmcf/day ie 100,000 boepd (page 109). Gas processing 200 mmcf/d (one train tested at greater capacity) expected to do 240 mmcf/d (40,000 boepd). Capable of modular bolt on expansion. Exploration upside at Uquo = Net attributable risked recoverable mid case 507.6 BCF gas = 84.6 mmboe already risked on factors from 25-75%. (Page 225). Niger recoverable oil potential unrisked and risked (Page 323). Unrisked recoverable potential = 6.927 mid to 10.332 billion bls High case. Risked recoverable 2.821 mid to 4.203 billion bls high case. Many of the prospects are very low risk and like the 5 made so far are in close proximity and derisked to existing discoveries. The core VALUATION given by Mirabaud for the Accugas transaction, 2P reserves, Uquo and Stubb Creek 2C + the R3 discoveries = 75p risked (83p unrisked). They have a total risked valuation target of 92p based on some additional finds. 1) No allowance for any upside from new gas deals (switch from diesel to gas). 2) No allowance for the risked additional Uquo exploration upside (80 mmboe+). If you break down the valuation (page 2) they use $4.50/barrel for 72 mmbls at R3 East & central plus $4.30/barrel for 48 mmbls at R1 South = a combined $530m for 120 mmbls ie an overall average of $4.41/barrel. They use an exchange rate of £1=$1.21. If we use £1=$1.40 longer term (brexit outcome etc) ie a barrel valued at $4.41 = £3.15 per barrel. The risked recoverable = 2.8 - 4.2 billion bls range mid-high case, so the valuation potential of the risked recoverable oil is somewhere between £8.8 - £13.2 billion using Mirabaud metrics as a base but with a poorer exchange rate. With circa 1 billion shares in issue and the above valuation of 75p -83p (risked/unrisked), every 100 mmbls found net to Savp would add 31.5p. 400 mmbls would give 126p to add to the 75p-83p risked/unrisked targets = 201-209p reasonable target expectation. (Note if Savp has farmed out 50% then above assumes 800 mmbls additional found in Niger or 30% overall of the 2.8 billions risked recoverable figure). A further interpretation with the Accugas debt reducing that then values the company much higer in share price. Also Uqou exploration upside. Some cash being used to buy further gas assets/marginal oil fields ? Also if there is a Niger farmout then the impact of that would also improve the share price somewhat as does the addition of cash from operations. With so much low risk exploration potential in Niger i can't see why 200p is not achievable and why i stick to this target. (Mirabaud have 128p and that's just for a further 120 mmbls of oil and shows the ability to surpass that 200p value target I have).
29/8/2019
10:38
haideralifool: I want to ask about this from the Hannam note: "On completion of the deal there will be US$20mm of cash in from new shares issued to the SSN holders and US$54mm from sale of 20% of Accugas to AIIM. There will be some cash out relating to taxes due on the transaction and US$20mm to Frontier. SAVP will issue US$37mm of shares on completion (for the SSN and Stubb Creek purchase) at a price based on 5-day VWAP – at the current share price this would be ~160mm shares (current basic shares outstanding of 880mm). SAVP will also take on its 80% share of US$575mm of gross debt relating to Accugas and Uquo." The note was written when the share price was 21.6p If the share price rises between now and deal conclusion the number of shares the SSN holders get will be less than if it falls. So would it be in their interests to short now?
13/8/2019
10:02
zengas: 1-8-14 = $50m raised at 56p = 131.337 shares in issue. 10-7-15 = $36m at 38p = 175.1m shares in issue. 7-7-16 = $40m at 38p = 273m shares in issue. 22-12-17 = $125m at 35p = 817m shares in issue. 24-1-19 = $23m at 28p = 879m shares in issue. Most if not all of the money has come from institutional investors and for a great number of them, their averages will be much higher than the last funding at 28p. In my opinion most of the bigger subscribers average is closer to 38p - 40p. I haven't seen many institutions leave. Two or so sold down but others took their place. I worked on around 1b shares in issue. If the 7E deal goes ahead as expected $12.5m was intended as a dividend, but in future years with annual free cash flow of up to $150m from Nigeria some 30% of that could be returned as a dividend. $45m at a longer term exch rate of £1/$1.40 is about 3.2p/share ie 10% yield on a share price of 32p or 5% yield on a share price of 64p (excluding anything in Niger). Niger on a billion shares to get a £1-£2 share price target ie $1.4b -$2.8b of value on a similar longer term exch rate of £1/$1.40 would need to realise some 350-700 mmbls at $4/barrel and we've notched up about 50 mmbls already there so far according to the analysts from a total potential of 2.8 billion bls RISKED recoverable (From memory circa 4 billion bls UNRISKED) mid case and plenty to go round even with a farm in partner. If you add the potential from the 2 projects together there's a serious amount of combined upside potential from 12p currently given 7E production/immediate cash flow and substantial low risk Sokor Alternances play in Niger both in dividend and capital growth and that's why imo we havent seen many TR1s because unlike many PIs they can afford to take a longer term view on both sets of assets re risk profile. Unless there's any change to 7E, I still stick with my £2 target. While the delay isn't comfortable to bear and we should be getting on with things it's allowed me to average down in to the mid teens. Nigeria cash flow would be immediate and a high portion of the Niger exploration extremely low risk at 80% COS and as evidenced by the 5 out of 5 discoveries from scratch.
11/1/2019
08:41
thomasthetank1: Mirabaud - Savannah Petroleum GETTING MORE FOR LESS Following news in December of further positive changes to the Seven Energy transaction we are upgrading numbers on SAVP. Our EBITDA estimates for FY19 & FY20 rise 79% & 81%, respectively, to US$173m & US308m, reflecting SAVP’s enlarged 75% share of cash flows and full consolidation of Seven into SAVP’s financial accounts. In parallel, under the revised structure, our Total NAV increases 24% to 89p/shr, suggesting fair value approaching 3x the current share price. With the Seven deal now in final form and expected to close this quarter, in our opinion, the scene is set for a material re-rating in the near-term. Accordingly, we maintain our BUY recommendation with a refreshed target price of 89p/shr – up from 72p/shr previously. Revised terms deliver control of infrastructure and equity alignment: through a series of deal modifications agreed with PE partner African Infrastructure Investment Managers (AIIM) SAVP has recast the terms of the Seven Energy acquisition. The revised structure will see SAVP acquire an incremental 55% of Accugas and in parallel divest 25% of the Uquo gas field, resulting in SAVP owning 75% of Seven’s midstream (Accugas) and upstream (Uquo gas) units, and AIIM the remaining 25%. Through increased ownership of Accugas (20% to 75%), SAVP gains control of a key piece of regional infrastructure which acts as the gateway to energy hungry gas customers in southeast Nigeria (see Accugas’s pipeline network in map in Figure 4, below). In our view, this is key to capturing the longer term growth opportunity around consolidating stranded gas resources (estimated at >40 tcf in the wider area), tapping into new regional power stations (such as Alaoji) and supplying high-paying industrial customers (currently burning diesel for an equivalent cost of >US$10/mcf – versus Accugas’s current weighted average sales price of US$3.5/mcf). Furthermore, equity alignment across Seven’s integrated gas business ensures the wider operation can be run as efficiently as possible. AIIM cash consideration boosts liquidity and supports our wider valuation case: in consideration for its 25% stake in Seven’s Uquo and Accugas assets, AIIM has agreed to pay SAVP US$70m in cash on deal completion. This provides SAVP with a fresh source of liquidity coming out of the deal, bolstering the group’s finances and providing growth capital for Nigeria and/or Niger. Furthermore, by paying US$70m for 25%, AIIM has in effect franked the value of SAVP’s Accugas and Uquo stakes at US$280m/21p (including US$70m of cash receipts). This compares to SAVP’s current share price of 31.5p – implying little value for the Stubb Creek field (in Nigeria) or the potential in Niger. To put this in perspective, our aggregate NAV for the Niger portfolio and Stubb Creek field stands at 36p risked.
24/9/2018
14:40
bushman1: Mirabaud note on SAVP below: Following an extended completion process, Savannah Petroleum (SAVP) is now on the cusp of closing the transformational Seven Energy acquisition, with the group’s latest timetable indicating Q4 2018. As this key milestone approaches, we take a fresh look at the enlarged business, reviewing both the potential of the acquired integrated gas portfolio in Nigeria and recent drill-bit success in neighbouring Niger. Our conclusion is that SAVP’s portfolio offers a differentiated and scalable cash flow base with material resource growth potential, whilst ‎the shares look attractively valued on both DCF and earnings metrics. As such, we reiterate our BUY recommendation with an upgraded 72p target price (vs. 66p/shr) – offering 157% upside at current levels. Solid cash flow base: we expect the base Nigerian business to contribute 26 kboepd of sales and US$65m of post-tax CF in FY19, rising to 32 kboepd and US$98m in FY21 (see Base Nigeria cash flows in Figure 2, below). This material step-up is driven by two factors: (1) the ramp up in Uquo field gas sales to full ‘daily contract quantity’ (DCQ) volumes in 2020, and (2) an in-built price inflator of ~6% per annum across existing gas contracts. Given modest future capex requirements, we expect the Nigeria base to generate cumulative FCF of ~US$177m over FY19-21, underpinning SAVP’s intention to become a dividend payer (maiden dividend of US$12.5m expected to be paid in Q1 2019, implies yield of 4.2%). Exploiting local gas market opportunity: we see significant potential value in connecting ‘last mile’ industrial customers to Accugas’s existing pipeline network, which transports Uquo gas to market. Typically, these customers are burning diesel for power at an equivalent price of ~US$15/mcf, compared with Accugas’s current average realised price of US$3.5/mcf (US$1.8/mcf of which flows to the upstream). In the event that new gas contracts are inked at a premium to US$3.5/mcf, the difference is split 50:50 between the midstream and upstream. Already, Accugas has secured heads of terms to supply 5 mmscf/d at prices of ~US$7.5/mcf (im plying an enhanced upstream price of US$3.8/mcf), prompting the start of work on a new 18km pipeline spur with 20 mmscf/d of capacity (the Calabar Gas Development Project). We expect this to provide a key new revenue stream, contributing post-tax CF of US$4m in FY20 (5 mmscf/d of sales) and US$13m in FY21 (15 mmscf/d). 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. Creating value through the drill-bit: the economics of SAVP’s Niger business are highly compelling, with basin-wide finding costs of less than US$1 per barrel and an NPV12% of US$5.2 per barrel in the ground at US$70/bbl oil (NPV10% of US$5.9 per barrel). Thus far, the company has drilled four successful wells (out of four) in the R3 East area, with estimated discovered resources in the range of 40-60 mmbbls (worth 12p/shr risked). Looking ahead, the company is currently drilling its fifth exploration well (Zomo-1) and it has a further four optional rig slots remaining, to be used for a mix of E&A and development drilling. We see considerable remaining exploration potential in the basin, noting that the R3 East area accounts for less than 10% of SAVP’s overall land bank. Conservatively, our valuation ascribes 125 mmbbls of unrisked resources to a further ten exploration wells (worth 14p/shr risked) across three high graded areas – R3 East, R3 Central and R1 South. Early production and cash flows: SAVP has secured Government backing for an early production system with the potential to deliver cash flows from Niger in H1 2019, just 12 months after the first well. The initial development concept is based on leasing surface facilities to keep capital costs low and trucking crude 120km north to CNPC’s domestic pipeline for onward sale at the Zinder refinery. We forecast 2 kbopd of production and US$11m of post-tax CF in FY19, ramping up to 5 kbopd and US$55m in FY21. Looking further out, following a bilateral agreement between Niger and Nigeria, plans are being prepared to build a major Agadem export pipeline to a new refinery in northern Nigeria which should unlock the wider basin from 2021 onwards. Several alternative pipeline options (via Chad and Benin) are also being worked up, providing multiple possible outlets (CNPC is expected to finish pre-feasibility studies on the pipeline routes by Q4 2018). Potential partial monetisation: in our opinion, SAVP’s 100% exploration success rate in Niger and the prospect of early cash flows has increased the pool of potential industry partners and the likelihood of a farm-out transaction. Whilst SAVP has the flexibility to move Niger forward on its own, utilising internally generated cash flows (from Nigeria), a farm-out deal would expedite exploration and production, bringing forward resource additions and cash flow and thus enhancing shareholder value. In our minds, the most likely potential partners are the major NOCs which have underinvested during the down-cycle and are now hungry to replenish reserves. Material discount to fair value: Using a 12% discount rate and a flat oil price of US$70/bbl, we calculate a Total NAV for SAVP of 72p/shr – up marginally from our previous 66p/shr figure. To illustrate the value on offer, our NAV of either one of SAVP’s businesses underpins the current share price (28p/shr), with Nigeria (2P + 2C) contributing 45p/shr risked (including corporate items) and Niger 27p/shr risked. Meanwhile, on an earnings basis the stock also looks attractively valued, trading on an EV/EBITDA of 2.8x FY19 falling to 1.2x FY21. Given continued progress on the Seven Energy transaction, and our confidence that the deal will complete before the year-end, we believe SAVP’s current discount to fair value represents a compelling entry point for investors.
24/9/2018
12:10
thomasthetank1: Mirabaud note on SAVP below: Following an extended completion process, Savannah Petroleum (SAVP) is now on the cusp of closing the transformational Seven Energy acquisition, with the group’s latest timetable indicating Q4 2018. As this key milestone approaches, we take a fresh look at the enlarged business, reviewing both the potential of the acquired integrated gas portfolio in Nigeria and recent drill-bit success in neighbouring Niger. Our conclusion is that SAVP’s portfolio offers a differentiated and scalable cash flow base with material resource growth potential, whilst ‎the shares look attractively valued on both DCF and earnings metrics. As such, we reiterate our BUY recommendation with an upgraded 72p target price (vs. 66p/shr) – offering 157% upside at current levels. Solid cash flow base: we expect the base Nigerian business to contribute 26 kboepd of sales and US$65m of post-tax CF in FY19, rising to 32 kboepd and US$98m in FY21 (see Base Nigeria cash flows in Figure 2, below). This material step-up is driven by two factors: (1) the ramp up in Uquo field gas sales to full ‘daily contract quantity’ (DCQ) volumes in 2020, and (2) an in-built price inflator of ~6% per annum across existing gas contracts. Given modest future capex requirements, we expect the Nigeria base to generate cumulative FCF of ~US$177m over FY19-21, underpinning SAVP’s intention to become a dividend payer (maiden dividend of US$12.5m expected to be paid in Q1 2019, implies yield of 4.2%). Exploiting local gas market opportunity: we see significant potential value in connecting ‘last mile’ industrial customers to Accugas’s existing pipeline network, which transports Uquo gas to market. Typically, these customers are burning diesel for power at an equivalent price of ~US$15/mcf, compared with Accugas’s current average realised price of US$3.5/mcf (US$1.8/mcf of which flows to the upstream). In the event that new gas contracts are inked at a premium to US$3.5/mcf, the difference is split 50:50 between the midstream and upstream. Already, Accugas has secured heads of terms to supply 5 mmscf/d at prices of ~US$7.5/mcf (implying an enhanced upstream price of US$3.8/mcf), prompting the start of work on a new 18km pipeline spur with 20 mmscf/d of capacity (the Calabar Gas Development Project). We expect this to provide a key new revenue stream, contributing post-tax CF of US$4m in FY20 (5 mmscf/d of sales) and US$13m in FY21 (15 mmscf/d). 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. Creating value through the drill-bit: the economics of SAVP’s Niger business are highly compelling, with basin-wide finding costs of less than US$1 per barrel and an NPV12% of US$5.2 per barrel in the ground at US$70/bbl oil (NPV10% of US$5.9 per barrel). Thus far, the company has drilled four successful wells (out of four) in the R3 East area, with estimated discovered resources in the range of 40-60 mmbbls (worth 12p/shr risked). Looking ahead, the company is currently drilling its fifth exploration well (Zomo-1) and it has a further four optional rig slots remaining, to be used for a mix of E&A and development drilling. We see considerable remaining exploration potential in the basin, noting that the R3 East area accounts for less than 10% of SAVP’s overall land bank. Conservatively, our valuation ascribes 125 mmbbls of unrisked resources to a further ten exploration wells (worth 14p/shr risked) across three high graded areas – R3 East, R3 Central and R1 South. Early production and cash flows: SAVP has secured Government backing for an early production system with the potential to deliver cash flows from Niger in H1 2019, just 12 months after the first well. The initial development concept is based on leasing surface facilities to keep capital costs low and trucking crude 120km north to CNPC’s domestic pipeline for onward sale at the Zinder refinery. We forecast 2 kbopd of production and US$11m of post-tax CF in FY19, ramping up to 5 kbopd and US$55m in FY21. Looking further out, following a bilateral agreement between Niger and Nigeria, plans are being prepared to build a major Agadem export pipeline to a new refinery in northern Nigeria which should unlock the wider basin from 2021 onwards. Several alternative pipeline options (via Chad and Benin) are also being worked up, providing multiple possible outlets (CNPC is expected to finish pre-feasibility studies on the pipeline routes by Q4 2018). Potential partial monetisation: in our opinion, SAVP’s 100% exploration success rate in Niger and the prospect of early cash flows has increased the pool of potential industry partners and the likelihood of a farm-out transaction. Whilst SAVP has the flexibility to move Niger forward on its own, utilising internally generated cash flows (from Nigeria), a farm-out deal would expedite exploration and production, bringing forward resource additions and cash flow and thus enhancing shareholder value. In our minds, the most likely potential partners are the major NOCs which have underinvested during the down-cycle and are now hungry to replenish reserves. Material discount to fair value: Using a 12% discount rate and a flat oil price of US$70/bbl, we calculate a Total NAV for SAVP of 72p/shr – up marginally from our previous 66p/shr figure. To illustrate the value on offer, our NAV of either one of SAVP’s businesses underpins the current share price (28p/shr), with Nigeria (2P + 2C) contributing 45p/shr risked (including corporate items) and Niger 27p/shr risked. Meanwhile, on an earnings basis the stock also looks attractively valued, trading on an EV/EBITDA of 2.8x FY19 falling to 1.2x FY21. Given continued progress on the Seven Energy transaction, and our confidence that the deal will complete before the year-end, we believe SAVP’s current discount to fair value represents a compelling entry point for investors.
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