Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $45.88 -$2.29, Brent $54.35 -$2.89, Diff -$8.47 -$1.57, NG $3.58 -14c
Whether you call it a risk off moment after the Fed and others warned about the economy next year or just a supply worry that Opec+, ie Russia won't cut production next year the oil price retreated and will likely end up down on the year.
Having said that, and with ‘window dressing' for the year end already obvious as today is probably going to be the last until 2/3 of January for many people, it may just provide an investment opportunity for the brave. Even if you only believe that the Saudis will turn off the taps and remember how many good weeks they had at $80+ oil last fall you may be able to make a return by buying that benchmark at today's price of $54.21…
SAVP has announced further changes to the Seven Energy transaction which gets better every time they alter something. Today they acquire another 55% of Accugas making a holding of 75% in a business I have always said is the real power house of the deal. In addition they sell 25% of SUGL (which owns the Uquo gas field) for $70m ‘broadening' the partnership with AIIM and providing a significant additional liquidity to the enlarged group.
The enhancement of the acquired assets is worth an increase in NPV 10 of 35% and forecast (By CP) cash flows by 58% over the 2019-2022 time-frame. The company also intend to acquire the Creek Town to Calabar pipeline and also a significant new customer in the Alaoji power station. The implementation agreement incorporating these changes is expected in January 2019 and completion of the wider agreement now expected Q1 2019.
SAVP also announced that the Amdigh-1 testing will happen mid H1 2019 to coincide and complement other work in Niger and should be followed by first oil from the area via the EPS. A renewed drilling campaign in country is also expected in the same time frame.
This is all excellent news for Savannah shareholders and whilst the wait has been a long one there is little doubt that it has been worth the while. I managed to rush Andrew Knott into the Core Finance studios and the link to that interview is below.
Range have requested the refundable payment of $2.8m from LandOcean to be repaid, with which is all agreed. The process may take up to six months due to China's approvals and FX control system.
PANR has announced that it is raising $16m at 15.25p to acquire two companies from Great Bear assets which are leases in Alaska on 250/- acres of land near infrastructure and for $200m of expenditure has two discoveries. The cost of the deal to PANR is $49m which is 49% of the value of the combined entities.
As I see it there are a number of positives from the deal, there is undoubtedly plenty of upside, mainly from Alaska but also from a fresh pair of expert eyes to look at the operational mistakes that have been made in Texas. These eyes are what looks like an impressive technical team from Great Bear who do also know Texas and should be able to deliver what Pantheon or more likely Vision have not so far done. Pantheon shareholders will be lucky that they have had a second bite at the cherry and what is more might well know the extent of the upside in Alaska quite soon.
The negatives are few, mainly to do with a a raise involving dilution, long suffering PANR holders will end up with 43% of the combined group but as per the above it could have been much worse. The Pantheon results, also out today are another disappointment so the deal looks like an early Christmas gift although many would have preferred a voucher.
Far too many fixtures over the next few days to identify any one, with the football computer keeping big teams apart it will be the slog of four games over less than a fortnight that will be the hardest part.
For racing fans the card at Kempton Park on Boxing Day is always magnificent and there is a good card on the Wednesday as well.
The same goes for rugby with big crowds out to watch local derbies.
And just to round off the year there are two decent boxing matches as Josh Warrington takes on Carl Frampton and Dillian Whyte takes on Dereck Chisora.
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