TIDMSAVE
RNS Number : 3103B
Savannah Energy Plc
30 September 2022
30 September 2022
--Savannah Energy PLC
("Savannah" or "the Company")
2022 Half Year Results
Savannah Energy PLC, the British independent energy company
focused around the delivery of Projects that Matter in Africa, is
pleased to announce its unaudited interim results for the six
months ended 30 June 2022.
Andrew Knott, CEO of Savannah Energy, said:
"Our half year results again demonstrate the continued strong
underlying progress we have made in our existing producing business
with a 10% year-on-year increase reported for both Total Revenues
(1) (to US$128.7m) and Adjusted EBITDA(2) (to US$100.3m). Further,
I am pleased to report that our growth trajectory has continued
into H2, with average daily production to 26 September 2022 having
increased by 55% to 34.8 Kboepd versus the H1 average of 22.5
Kboepd and 118% versus the 16.0 Kboepd level at the time of
acquisition in November 2019. This H2-to-date growth reflects the
impact of the three new gas sales contracts and the contract
extension we have announced in 2022, with Accugas now supplying gas
to approximately 24% of Nigeria's thermal power generation capacity
as compared to approximately 10% at the time of the original
acquisition. In the first half, we also announced agreements for
the development of up to 750 MW of large-scale greenfield solar and
wind projects in Niger and Chad, which have the potential to
transform the electricity access rates in both countries.
Looking forward to the rest of 2022 and 2023, I remain confident
in where we are as a business. We look forward to closing our
Proposed Acquisitions of the Chad and Cameroon Assets in Q4 of this
year. We expect to deliver on or exceed our financial guidance. We
expect to announce further hydrocarbon acquisitions and to expand
our Renewable Energy Division with several new large-scale
greenfield opportunities currently under review and negotiation. We
continue to work towards completing the refinancing of our Nigerian
debt and to announce the development and exploration plans for our
assets in Niger.
Lastly, I would like to express my gratitude to all of those who
contributed to the progress in our business in H1 - my incredibly
dedicated and passionate colleagues, our host governments,
communities, local authorities and regulators, our shareholders and
lenders, and our customers, suppliers and partners. Thank you
all."
H1 2022 Financial Highlights
-- Total Revenues(1) of US$128.7m (up 10% on H1 2021: US$116.5m);
-- Adjusted EBITDA(2) of US$100.3m (up 10% on H1 2021: US$91.5m);
-- Operating expenses plus administrative expenses(3) of US$24.5m (H1 2021: US$22.4m);
-- Loss before tax of US$11.3m (H1 2021 profit before tax: US$7.7m);
-- Capital expenditure of US$14.0m (H1 2021: US$5.2m);
-- Net debt position as at 30 June 2022 of US$327.1m (Year-end
2021: US$370.0m) with Adjusted Leverage(4) of 2.0x (Year-end 2021:
2.5x); and
-- Total cash(5) of US$182.8m as at 30 June 2022 (Year end 2021: US$154.3m)
H1 2022 Operational Highlights
-- New gas sales agreements ("GSAs") were signed with Central
Horizon Gas Company Limited ("CHGC"), a major gas distribution
company situated in the South-South region of Nigeria, and
TransAfam Power Ltd, a licensed power generation company in Nigeria
and, post-period-end in August 2022, with Notore Chemical
Industries PLC for its fertiliser plant. These customers are
accessed via Accugas' pipeline network to Ikot Abasi and on to the
Port Harcourt area via third party infrastructure, thus no capital
expenditure is required;
-- A contract extension was signed with First Independent Power
Limited ("FIPL") to supply gas to its Eleme and Trans Amadi power
plants, bringing the total number of power plants supplied under
the contract to three, including the FIPL Afam power plant;
-- During the period, Savannah commenced gas deliveries to three
new customers in Nigeria, FIPL's Trans Amadi power plant,
TransAfam's power plants in Rivers State, and CHGC. Savannah now
has operational GSAs with power plants comprising 24% of Nigeria's
thermal generation capacity;
-- Average gross daily production, of which 89% was gas,
remained almost constant during H1 2022 at 22.5 Kboepd (H1 2021:
22.6 Kboepd). The broadening of our customer base during H1 2022
has enabled us to increase gas deliveries to support Nigeria's
power generation needs;
-- A new gas production well, Uquo 11, commenced production in
April 2022 and produced at an average rate of 68 MMscfpd up to 30
June 2022; and
-- Our Renewable Energy Division signed agreements for the
development of up to 750 MW large-scale greenfield solar and wind
projects with the Governments of Niger (Parc Eolien de la Tarka)
and Chad (Centrale Solaire de Komé and Centrales d'Energie
Renouvelable de N'Djamena).
Chad and Cameroon Assets
-- Work continues to complete our proposed acquisitions of
ExxonMobil's and PETRONAS' assets in Chad and Cameroon (the "Chad
and Cameroon Assets") by the end of the year.
-- Savannah has undertaken significant preparation work ahead of
completion including recruitment of the operational team and
enhancements to organisational systems to ensure that the
transition of operatorship can be completed.
FY 2022 Guidance Reiterated
Savannah reiterates full year 2022 guidance as follows:
-- Total Revenues(1) greater than US$215.0m;
-- Group Operating expenses plus administrative expenses(3) of up to US$75.0m;
-- Group Depreciation, Depletion and Amortisation of US$21m
fixed for infrastructure assets plus US$2.3/boe for oil and gas
assets; and
-- Capital expenditure of up to US$85.0m.
H1 2022 Corporate Events
-- In June 2022, Savannah announced several changes to the Board:
o Nick Beattie was appointed as Chief Financial Officer and was
appointed to the Board of Directors;
o David Jamison retired from the Board at the Annual General
Meeting on 30 June 2022, and assumed the (non-board) role as
Honorary President of Savannah;
o Steve Jenkins will step down from his role as Non-Executive
Chairman at or prior to the 2023 Annual General Meeting. A search
for a Chair-Designate is underway and it is anticipated that an
appointment will be made during H2 2022, and
o It is intended that three new non-executive directors (Sylvie
Rucar, Sarah Clark and Dr Djamila Ferdjani) will be appointed to
the Board following completion of the proposed acquisition of the
ExxonMobil upstream and midstream assets in Chad and Cameroon.
For further information, please refer to the Company's website
www.savannah-energy.com or contact:
+44 (0) 20 3817
Savannah Energy 9844
Andrew Knott, CEO
Nick Beattie, CFO
Sally Marshak, Head of IR & Communications
+44 (0) 20 7409
Strand Hanson (Nominated Adviser) 3494
James Spinney
Ritchie Balmer
Rob Patrick
finnCap Ltd (Joint Broker)
Christopher Raggett +44 (0) 20 7220
Tim Redfern 0500
Panmure Gordon (UK) Ltd (Joint Broker)
John Prior
Hugo Rich +44 (0) 20 7886
James Sinclair-Ford 2500
+44 (0) 20 3757
Camarco 4983
Billy Clegg
Owen Roberts
Violet Wilson
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No. 596/2014, as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended, and is disclosed in accordance
with the Company's obligations under Article 17 of those
Regulations.
About Savannah Energy:
Savannah Energy PLC is an AIM quoted British independent energy
company focused around the delivery of Projects that Matter in
Africa, active in Cameroon, Chad, Niger and Nigeria.
Further information on Savannah Energy PLC can be found on the
Company's website: www.savannah-energy.com .
H1 2022 Operational Review
Nigeria
Average gross daily production was flat in H1 2022 with an
average of 22.5 Kboepd (H1 2021: 22.6 Kboepd). During H1 2022, the
Company's subsidiary, Accugas, supplied gas to the Calabar, Ibom,
TransAfam, FIPL Afam and FIPL Trans Amadi power stations. Gas was
delivered throughout the period to Lafarge's Mfamosing cement
factory in Cross Rivers State and deliveries to CHGC, a distributor
of gas to industrial and commercial customers in the Port Harcourt
area, commenced in June 2022.
Niger
During H1 2022, t he four licence areas in Niger were
amalgamated into a single PSC (R1234) valid for up to a further 10
years. This has laid the foundation to progress plans for the R3
East Early Production Scheme and we expect to announce further
details of this project later in the year.
Renewable Energy Division
Savannah's Renewable Energy division was established in 2021 and
during H1 2022 signed three agreements for the development of a
total of up to 750MW large-scale greenfield solar and wind projects
with the governments of Chad and Niger.
The agreement signed in Chad covers two projects. The first
comprises an up to 300 MW photovoltaic solar farm and battery
energy storage system located in Komé, Southern Chad (the "Centrale
Solaire de Komé"). This project is being developed to provide
clean, reliable power generation for the Doba Oil Project and the
surrounding towns of Moundou and Doba. The second involves the
development of solar and wind projects of up to 100 MW each to
supply power to the country's capital city, N'Djamena (the
"Centrales d'Energie Renouvelable de N'Djamena"). The Centrale
Solaire de Komé project would represent the largest solar plant in
sub-Saharan Africa (excluding South Africa ) and potentially the
largest battery storage project on the continent. The Centrales
d'Energie Renouvelable de N'Djamena would more than double the
existing installed generation capacity supplying the capital city
and increase the total installed on-grid power generation capacity
in Chad by up to an estimated 63%.
In Niger, an agreement was signed with the Ministry of
Petroleum, Energy and Renewable Energies of the Republic of Niger
for the construction and operation of the country's first wind
farm, with a proposed installed power generation capacity of up to
250 MW on an independent power producer basis in the Tahoua Region
of Southern Niger. This is targeted to increase the country's
on-grid electricity supply by up to 40%. Project sanction is
targeted for 2023 with first wind power in 2025.
These projects represent potentially substantial foreign direct
investments that would make significant contributions to the
economic development of the regions where they will be
situated.
H1 2022 Financial Review
The Group reports Total Revenues(1) of US$128.7 million for the
six months ended 30 June 2022, up 10% on H1 2021 and an Adjusted
EBITDA(2) of US$100.3 million also up 10% on H1 2021, reflecting
the quality of our gas producing assets in Nigeria as we broaden
and diversify our customer base.
We have invested heavily during the period to scale up the
business ahead of completion of the proposed acquisition of the
Chad and Cameroon Assets and to enable the delivery of our wider
business development plans. This has included a 21% increase in
headcount in H1 2022, alongside a large investment into new systems
and processes that will be required to support the enlarged scale
of the Group.
Summary of results for H1 2022
The table below provides an overview of our results for H1 2022
with a comparison for H1 2021.
Financial highlights
Six months Six months
ended ended
30 June 2022 30 June 2021
US$ million US$ million
Total Revenues(1) 128.7 116.5
-------------- --------------
Adjusted EBITDA(2) 100.3 91.5
-------------- --------------
Revenue 85.8 99.4
-------------- --------------
Operating expenses plus administrative
expenses(3) 24.5 22.4
-------------- --------------
Operating profit 27.9 54.0
-------------- --------------
(Loss)/profit before tax (11.3) 7.7
-------------- --------------
(Loss) after tax (20.5) (1.4)
-------------- --------------
The Group's operating profit for the six months ended 30 June
2022 was US$27.9 million (H1 2021: US$54.0 million). The decrease
resulted from a combination of lower revenues resulting from
unscheduled downtime suffered by certain of our customers (which
does not reduce Total Revenues(1) under the terms of the
take-or-pay gas contracts) and a 10% increase in operating expenses
plus administrative expenses(3) . The increase in these costs is a
result of the investment being made in growing the business
infrastructure in preparation for completion of the acquisition of
the Chad and Cameroon Assets and continued investment into the
efficiency of the Nigerian assets.
The Group's loss before tax was US$11.3 million (H1 2021 profit:
US$7.7 million) and the loss after tax was US$20.5 million (H1 2021
loss: US$1.4 million).
Adjusted EBITDA(2) for H1 2022 was US$100.3 million, compared to
US$91.5 million for H1 2021.
Revenue
Revenue during the period was 14% lower than the comparable
prior year period at US$85.8 million (H1 2021: US$99.4 million). As
previously highlighted, it is important to note the impact of
take-or-pay accounting rules under IFRS 15 on our Income Statement
as regards to revenue recognition for our gas sales agreements. The
Revenue shown in the Condensed Consolidated Statement of
Comprehensive Income includes only the gas, oil and condensate that
has been delivered. The Total Revenues(1) of US$128.7 million (H1
2021: US$116.5m) includes the volume of gas that customers are
committed to pay for under the take-or-pay terms of the gas sales
agreements, which includes gas that has been delivered plus gas
invoiced but yet to be delivered, plus oil and condensate revenues.
Total Revenues (1) showed a 10% increase compared to H1 2021.
Management believes that Total Revenues(1) is the most appropriate
method of reflecting the underlying cash generation capacity of the
business.
Savannah continues to benefit from over US$4 billion of
contracted future gas revenues in Accugas with annual price
escalation clauses related to US consumer price inflation.
Cost of Sales, administrative and other operating expenses
Cost of sales amounted to US$33.1 million (H1 2021: US$34.3
million) which includes US$13.8 million (H1 2021: US$13.8 million)
for facility operating and maintenance costs, US$2.9 million (H1
2021: US$2.2 million) royalty expenses and US$16.4 million (H1
2021: US$18.3 million) depletion and depreciation.
Administrative and other operating expenses for the period were
US$11.7 million (H1 2021: US$9.5 million), which includes US$0.9
million (H1 2021: US$0.9 million) of depreciation.
Group Operating expenses plus administrative expenses(3) were
US$24.5 million (H1 2021: US$22.4 million).
EBITDA and Adjusted EBITDA(2)
Presented below is the calculation of EBITDA and Adjusted
EBITDA(2) . Management believes that the alternative performance
measure of Adjusted EBITDA(2) more accurately reflects the cash
generating capacity of the business. Adjusted EBITDA(2) includes
gas that has been invoiced under take-or-pay contracts but not yet
delivered and is adjusted for transaction and other related
expenses to provide a meaningful comparison between periods.
Calculation of EBITDA and Adjusted EBITDA(2) for the Group
GROUP Six months Six months
ended ended 30 June
30 June 2022 2021
US$ million US$ million
Operating profit 27.9 54.0
Add: depletion, depreciation and amortisation 17.3 19.2
Add: transaction and other related expenses 7.3 2.3
EBITDA 52.5 75.5
Add: other invoiced amounts 42.9 17.1
Deduct: royalty payable on additional gas (1.0) (0.4)
volume
Deduct: expected credit loss & other related 5.9 (0.7)
adjustments
Adjusted EBITDA (2) 100.3 91.5
Finance Costs
Finance costs were US$36.8 million (H1 2021: US$38.7 million) -
of these costs US$27.9 million (H1 2021: US$26.8 million) related
to bank and loan note interest. The average interest rate was 10.7%
(H1 2021: 10.3%) reflecting the higher US Libor rates during the
period compared to prior year. The remainder of the finance costs
are primarily a number of non-cash items which are itemised in Note
8 of the financial statements.
The interest cover ratio, on an Adjusted EBITDA(2) basis is 3.1
times (H1 2021: 2.9 times).
Foreign Exchange loss
Foreign exchange losses amounted to US$0.8 million (H1 2021:
US$10.9 million). These losses were realised losses arising from US
Dollar gas sales invoices which are settled in local currency, and
from the translation of Naira into US Dollars to service US Dollar
denominated obligations. Realised foreign exchange losses can be
recovered through the "true up" mechanism in the Calabar GSA
In order to purchase US dollars to service US dollar
obligations, Savannah accesses foreign exchange at market rates and
there is typically a differential between this rate and the Central
Bank of Nigeria exchange rate. The majority of these losses are
recoverable through a foreign exchange "true-up" clause in the
Calabar GSA.
Taxation
The tax charge of US$9.2 million (H1 2021: US$9.1 million) was
made up of a current tax charge of US$2.8 million (H1 2021: US$2.2
million) and a deferred tax charge of US$6.4 million (H1 2021:
US$6.9 million). The current tax charge principally arises on
Nigerian profits and the deferred tax charge is a result of
utilisation of unused losses in Nigeria.
Debt
The Group net debt as at 30 June 2022 was US$327.1 million (31
December 2021: US$370.0 million). During the period, the leverage
ratio, and Adjusted Leverage ratio, improved as shown in the table
below.
Work continues on the proposed refinancing of the Accugas debt
facility as was detailed in the 2021 Annual Report and
Accounts.
Leverage
30 June 31 December
2022 2021
US$ million US$ million
Adjusted EBITDA(2 #) 100.3 175.0
------------- -------------
Net debt 327.1 370.0
------------- -------------
Naira held in cash for interest 80.9 75.5
------------- -------------
Adjusted net debt 408.0 445.5
------------- -------------
Leverage (Net debt/Adjusted EBITDA
(2) ) 1.6 2.1
------------- -------------
Adjusted Leverage(4) (Adjusted
net debt/Adjusted EBITDA (2)
) 2.0 2.5
------------- -------------
# Adjusted EBITDA(2) for 6 months to 30 June 2022 and for 12
months to 31 December 2021
Cash flow
A summary of the cash flows for the period is as follows:
Six months ended Six months ended
30 June 2022 30 June 2021
US$ million US$ million
Net cash generated from operating activities 41.9 65.2
Net cash used in investing activities (29.3) (a) (4.8) (a)
Net cash generated from/(used in) financing
activities 18.1 (22.8)
Impact of exchange rate changes on cash
balances (2.2) (7.9)
----------------- -----------------
Net increase in cash 28.5 29.7
----------------- -----------------
Cash balances at start of period (5) 154.3 106.0
----------------- -----------------
Cash balances at end of period 5 182.8 135.7
----------------- -----------------
(a) excludes US$32.2 million (H1 2021: US$31.0 million) transferred to debt service accounts
The net cash inflow from operating activities was US$41.9
million (H1 2021: US$65.2 million).
Net cash used in investing activities includes US$14.6 million
deposits paid towards the acquisition of the Chad and Cameroon
Assets (H1 2021: nil), payments for property, plant and equipment
of US$9.1 million (H1 2021: US$4.1 million) and US$4.9 million (H1
2021: US$1.1 million) incurred on exploration and evaluation
assets.
The net cash generated from and used in financing activities
includes equity proceeds of US$61.1 million (H1 2021: nil),
principal debt repayments of US$17.1 million (H1 2021: US$8.8
million) and finance costs of US$24.8 million (H1 2021: US$13.6
million).
Total Cash balances of the Group at the end of the period
increased to US$182.8 million (H1 2021: US$135.7 million).
Nick Beattie
Chief Financial Officer
30 September 2022
Footnotes
(1) Total Revenues are defined as the total amount of invoiced
sales during the period. This number is seen by management as more
accurately reflecting the underlying cash generation capacity of
the business as opposed to Revenue recognised in the Condensed
Consolidated Statement of Comprehensive Income. A detailed
explanation of the impact of IFRS 15 revenue recognition rules on
our Consolidated Statement of Comprehensive Income is provided in
the Financial Review section of the Annual Report and Accounts
2020.
2 Adjusted EBITDA is calculated as profit or loss before finance
costs, investment revenue, foreign exchange gains or losses,
expected credit loss and other related adjustments, fair value
adjustments, gain on acquisition, taxes, transaction and other
related expenses, depreciation, depletion and amortisation and
adjusted to include deferred revenue and other invoiced amounts.
Management believes that the alternative performance measure of
Adjusted EBITDA more accurately reflects the cash-generating
capacity of the business.
3 Group operating expenses plus administrative expenses are
defined as total cost of sales, administrative and other operating
expenses excluding royalty and depletion, depreciation and
amortisation and transaction costs.
(4) Adjusted Leverage is defined as Adjusted net debt/Adjusted
EBITDA. Adjusted net debt is calculated as the net debt balance
adjusted for the Naira held in cash for interest (as shown in the
financial review). For the 6 month period ended 30 June 2022, the
Adjusted Leverage calculation is prepared on an annualised EBITDA
basis
5 Within Cash balances, US$1.6m is restricted cash which
includes deposits and stamp duty escrow balances.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
SIX MONTHSED 30 JUNE 2022
Six months ended Six months ended
30 June 30 June
2022 2021
US$ ' 000 US$ ' 000
Note Unaudited Unaudited
-------------------------------------------------- -------- --------------------- ---------------------
Revenue 4 85,847 99,386
Cost of sales 5 (33,127) (34,286)
-------------------------------------------------- -------- --------------------- ---------------------
Gross profit 52,720 65,100
Administrative and other operating expenses (11,686) (9,505)
Transaction and other related expenses 6 (7,262) (2,341)
Expected credit loss and other related
adjustments 14 (5,918) 739
Operating profit 6 27,854 53,993
Finance income 7 273 328
Finance costs 8 (36,827) (38,732)
Fair value adjustment 9 (1,768) 3,042
Foreign translation loss 10 (846) (10,943)
-------------------------------------------------- -------- --------------------- ---------------------
(Loss)/profit before tax (11,314) 7,688
Current tax expense 11 (2,793) (2,172)
Deferred tax expense 11 (6,438) (6,893)
-------------------------------------------------- -------- --------------------- ---------------------
Tax expense 11 (9,231) (9,065)
-------------------------------------------------- -------- --------------------- ---------------------
Net loss and total comprehensive loss (20,545) (1,377)
-------------------------------------------------- -------- --------------------- ---------------------
Total comprehensive (loss)/profit attributable
to:
Owners of the Company (20,264) (3,109)
Non-controlling interests (281) 1,732
-------------------------------------------------- -------- --------------------- ---------------------
(20,545) (1,377)
-------------------------------------------------- -------- --------------------- ---------------------
Loss per share US cents US cents
-------------------------------------------------- -------- --------------------- ---------------------
Basic 12 (1.77) (0.33)
Diluted 12 (1.77) (0.33)
-------------------------------------------------- -------- --------------------- ---------------------
All results derive from continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
30 June 31 December
2022 2021
US$'000 US$'000
Note Unaudited Audited
---------------------------------------------- -------- --------------------- -----------------------
Assets
Non-current assets
Third-party investment 1,182 -
Property, plant and equipment 13 557,368 568,201
Exploration and evaluation assets 166,373 161,343
Deferred tax assets 217,376 223,814
Right-of-use assets 4,180 4,724
Restricted cash 1,635 1,635
Finance lease receivable 581 722
---------------------------------------------- -------- --------------------- -----------------------
Total non-current assets 948,695 960,439
---------------------------------------------- -------- --------------------- -----------------------
Current assets
Inventory 5,230 3,873
Trade and other receivables 14 206,667 231,631
Cash at bank 15 181,168 152,644
---------------------------------------------- -------- --------------------- -----------------------
Total current assets 393,065 388,148
---------------------------------------------- -------- --------------------- -----------------------
Total assets 1,341,760 1,348,587
---------------------------------------------- -------- --------------------- -----------------------
Equity and liabilities
Capital and reserves
Share capital 1,749 1,409
Share premium 124,897 61,204
Shares to be issued - 63,956
Treasury shares (135) (58)
Other reserves 8,381 458
Share-based payment reserve 9,042 8,706
Retained earnings 136,957 157,221
---------------------------------------------- -------- --------------------- -----------------------
Equity attributable to owners of
the Company 280,891 292,896
Non-controlling interests 13,561 13,842
---------------------------------------------- -------- --------------------- -----------------------
Total e quity 294,452 306,738
---------------------------------------------- -------- --------------------- -----------------------
Non-current liabilities
Other payables 16 3,617 3,415
Borrowings 17 107,429 108,652
Lease liabilities 4,553 5,308
Provisions 71,714 68,966
Contract liabilities 18 269,435 213,043
---------------------------------------------- -------- --------------------- -----------------------
Total non- current liabilities 456,748 399,384
---------------------------------------------- -------- --------------------- -----------------------
Current l iabilities
Trade and other payables 16 86,603 116,771
Borrowings 17 402,497 415,593
Interest payable 85,556 80,101
Tax liabilities 1,633 2,058
Lease liabilities 1,558 1,475
Contract liabilities 18 12,713 26,467
Total current liabilities 590,560 642,465
---------------------------------------------- -------- --------------------- -----------------------
Total liabilities 1,047,308 1,041,849
---------------------------------------------- -------- --------------------- -----------------------
Total e quity and l iabilities 1,341,760 1,348,587
---------------------------------------------- -------- --------------------- -----------------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2022
Six months ended Six months ended
30 June 30 June
2022 2021
US$'000 US$'000
Note Unaudited Unaudited
---------------------------------------------------------- ---- -------------------------- ------------------------
Cash flows from operating activities:
(Loss)/profit before tax (11,314) 7,688
Adjustments for:
Depreciation 914 888
Depletion 16,432 18,335
Finance income (190) (124)
Finance costs 8 36,827 38,732
Fair value adjustment 1,768 (3,042)
Unrealised foreign exchange (gain)/loss 10 (99) 6,981
Share option charge 336 1,375
Expected credit loss and other related
adjustments 14 5,918 (739)
Operating cash flows before movements in working capital 50,592 70,094
Increase in inventory (1,357) (689)
Increase in trade and other receivables (40,703) (15,921)
Decrease in trade and other payables (6,389) (4,467)
Increase in contract liabilities 40,765 16,798
Income tax paid (1,024) (632)
---------------------------------------------------------- ---- -------------------------- ------------------------
Net cash generated from operating activities 41,884 65,183
---------------------------------------------------------- ---- -------------------------- ------------------------
Cash flows from investing activities:
Interest received 171 98
Payments for property, plant and equipment (9,104) (4,109)
Payments for exploration and evaluation assets (4,888) (1,118)
Acquisition deposits (14,648) -
Loans provided to third parties (1,067) -
Cash transferred to debt service accounts (32,186) (30,973)
Lessor receipts 196 280
---------------------------------------------------------- ---- -------------------------- ------------------------
Net cash used in investing activities (61,526) (35,822)
---------------------------------------------------------- ---- -------------------------- ------------------------
Cash flows from financing activities:
Finance costs (24,758) (13,580)
Proceeds from issues of equity shares, net of issue costs 61,141 -
Sale of Treasury shares 73 -
Borrowing proceeds 19 12,810 -
Borrowing repayments 19 (30,545) (8,794)
Lease payments 19 (527) (335)
Net cash generated from/(used in) financing activities 18,194 (22,709)
---------------------------------------------------------- ---- -------------------------- ------------------------
Net (decrease)/increase in cash and cash equivalents (1,448) 6,652
Effect of exchange rate changes on cash and cash
equivalents (2,214) (7,938)
Cash and cash equivalents at beginning of period 45,739 74,258
Cash and cash equivalents at end of period 15 42,077 72,972
---------------------------------------------------------- ---- -------------------------- ------------------------
Amounts held for debt service at end of period 15 139,091 61,078
---------------------------------------------------------- ---- -------------------------- ------------------------
Cash at bank at end of period 15 181,168 134,050
---------------------------------------------------------- ---- -------------------------- ------------------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2022
Equity
attributable
Shares Share-based to the
Share Share to be Treasury Other payment Retained owners of Non-controlling Total
capital premium issued shares reserves reserve earnings the Company interest equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1
January 2022
(audited) 1,409 61,204 63,956 (58) 458 8,706 157,221 292,896 13,842 306,738
Loss for the
period - - - - - - (20,264) (20,264) (281) (20,545)
---------------- -------- -------- --------- --------- --------- ------------ --------- ------------- ---------------- ---------
Total
comprehensive
loss for the
period - - - - - - (20,264) (20,264) (281) (20,545)
Transactions
with
shareholders:
Equity-settled
share-based
payments - - - - - 336 - 336 - 336
Issue of
shares, net of
costs 340 63,693 (63,956) (77) - - - - - -
Sale of
treasury
shares - - - - 73 - - 73 - 73
Issue of
warrants - - - - 7,850 - - 7,850 - 7,850
Balance at 30
June 2022
(unaudited) 1,749 124,897 - (135) 8,381 9,042 136,957 280,891 13,561 294,452
---------------- -------- -------- --------- --------- --------- ------------ --------- ------------- ---------------- ---------
Equity
attributable
Share-based to the
Share Share Treasury Other payment Retained owners of Non-controlling Total
capital premium shares reserves reserve earnings the Company interest equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1
January 2021
(audited) 1,409 62,092 (59) 458 7,104 158,670 229,674 (2,737) 226,937
Profit/(loss)
for the period - - - - - (3,109) (3,109) 1,732 (1,377)
---------------- -------- -------- --------- --------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
profit/(loss)
for the period - - - - - (3,109) (3,109) 1,732 (1,377)
Transactions
with
shareholders:
Equity-settled
bonus payments - 171 1 - - - 172 - 172
Equity-settled
share-based
payments - - - - 1,375 - 1,375 - 1,375
Balance at 30
June 2021
(unaudited) 1,409 62,263 (58) 458 8,479 155,561 228,112 (1,005) 227,107
---------------- -------- -------- --------- --------- ------------ --------- ------------- ---------------- --------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. General information
Savannah Energy PLC ("Savannah" or "the Company") was
incorporated in the United Kingdom on 3 July 2014. The principal
activity of Savannah and its subsidiaries (together, the "Group")
is the exploration, development and production of natural gas and
crude oil and development of other energy related projects in
Africa.
The Company is domiciled in the UK for tax purposes and its
shares were admitted to trading on the AIM market ("AIM") of the
London Stock Exchange plc on 1 August 2014. The Company's
registered address is 40 Bank Street, London, E14 5NR.
2. Accounting policies
Basis of Preparation
On 31 December 2020, International Financial Reporting Standards
("IFRS") as adopted by the European Union at that date was brought
into UK law and became international accounting standards as
adopted by the United Kingdom ("UK-adopted IAS"), with future
changes being subject to endorsement by the UK Endorsement Board.
The Group transitioned to UK-adopted IAS in its consolidated
financial statements from 1 January 2021. There was no impact on
the Group from this transition, nor any changes in accounting
policy. These condensed consolidated financial statements have been
prepared in accordance with UK-adopted IAS. The provisions of IAS
34: Interim Financial Reporting have not been applied.
The condensed consolidated financial statements do not include
all disclosures that would otherwise be required in a complete set
of financial statements and should be read in conjunction with the
Group's 2021 Annual Report and audited financial statements for the
year ended 31 December 2021 ("the Group's 2021 Annual Report"). The
financial information for the six months ended 30 June 2022 does
not constitute statutory accounts within the meaning of Section
434(3) of the Companies Act 2006 and is unaudited.
The annual financial statements of Savannah for the year ended
31 December 2021 were prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006. The Independent Auditors' Report on the Group's
2021 Annual Report was unqualified and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006. The Independent
Auditors' Report contained a material uncertainty related to going
concern.
The Group's statutory financial statements for the year ended 31
December 2021 have been filed with the Registrar of Companies.
All the Group's subsidiaries' functional currency is US Dollars
("US$"), and the consolidated financial statements are presented in
US Dollars and all values are rounded to the nearest thousand
(US$'000), except when otherwise stated.
The financial information presented herein has been prepared in
accordance with the accounting policies used in preparing the
Group's 2021 Annual Report. There are no other new or amended
standards or interpretations adopted from 1 January 2022 that have
a significant impact on the interim financial information.
Going concern
The Group places significant importance in managing its
liquidity position and ensuring that all parts of the business have
appropriate funding as needed to meet their obligations. The
Directors have considered the Group's forecasted cash flows and
funding requirements for the twelve months from the date of
publication of this Interim Report (including sensitivity analysis
of key assumptions which has been undertaken) and in addition the
Directors have considered the range of risks facing the business on
an ongoing basis. The principal assumptions made in relation to the
going concern assessment relate to: (1) the timely payments of our
gas invoices by our customers, (2) the forecast commodity price
environment and (3) continued access to FX markets. Considering
this last point, the Directors are highly confident that the Group
will continue to be able to access US dollars as required to
maintain going concern status. However, a minimal risk exists that
the Group may not be able to continue to do so and/or the Group may
not be able to amend its debt facilities and/or complete its
planned debt refinancing as described in the Group's 2021 Annual
Report. These facts indicate that a material uncertainty exists
that may cast significant doubt on the Group's, ability to continue
to apply the going concern basis of accounting. Notwithstanding
this, the Directors have full confidence in the Group's forecasts
and have continued to adopt the going concern basis in preparing
the consolidated financial statements.
3. Segmental reporting
For the purposes of resource allocation and assessment of
segment performance, the operations of the Group are divided into
three segments: two geographical locations and an Unallocated
segment. The two geographical segments are Nigeria and Niger, and
their principal activities are the exploration, development and
extraction of oil and gas. These make up the total revenue
generating operations of the Group. The Unallocated segments
principal activities are the governance and financing of the Group
as well as undertaking business development opportunities. Items
not included within Operating profit/(loss) are reviewed at a Group
level and therefore there is no segmental analysis for this
information.
The following is an analysis of the Group's results by
reportable segment for the six months ended 30 June 2022:
Nigeria Niger Unallocated Total
US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
-------------------------------------- ----------- ----------- ------------- -------------
Revenue 85,847 - - 85,847
Cost of sales(1) (33,127) - - (33,127)
-------------------------------------- ----------- ----------- ------------- -------------
Gross profit 52,720 - - 52,720
Administrative and other operating
expenses (3,446) (972) (7,268) (11,686)
Transaction and other related
expenses - - (7,262) (7,262)
Expected credit loss and other
related adjustments (5,918) - - (5,918)
Operating profit/(loss) 43,356 (972) (14,530) 27,854
-------------------------------------- ----------- ----------- ------------- -------------
Finance income 273
Finance costs (36,827)
Fair value adjustment (1,768)
Foreign translation loss (846)
-------------------------------------- ----------- ----------- ------------- -------------
Profit before tax (11,314)
-------------------------------------- ----------- ----------- ------------- -------------
Segment depreciation, depletion
and amortisation 16,890 132 323 17,345
Segment non-current assets(2) 553,681 167,667 7,755 729,103
Segment non-current asset additions 1,862 5,035 4,101 10,998
Segment total assets 1,118,014 168,970 54,776 1,341,760
Segment total liabilities (974,629) (33,525) (37,154) (1,047,308)
-------------------------------------- ----------- ----------- ------------- -------------
1. Refer to note 5 for items included within Cost of Sales.
2. Includes Third party investments, Property, plant and
equipment, Exploration and evaluation assets and Right-of-use
assets.
The following is an analysis of the Group's results by
reportable segment for the six months ended 30 June 2021:
Nigeria Niger Unallocated Total
US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
------------------------------------ ----------- ----------- ------------- -----------
Revenue 99,386 - - 99,386
Cost of sales(1) (34,286) - - (34,286)
------------------------------------ ----------- ----------- ------------- -----------
Gross profit 65,100 - - 65,100
Administrative and other operating
expenses (2,748) (2,410) (4,347) (9,505)
Transaction and other related
expenses - - (2,341) (2,341)
Expected credit loss and other
related adjustments 739 - - 739
Operating profit/(loss) 63,091 (2,410) (6,688) 53,993
------------------------------------ ----------- ----------- ------------- -----------
Finance income 328
Finance costs (38,732)
Fair value adjustment 3,042
Foreign translation loss (10,943)
------------------------------------ ----------- ----------- ------------- -----------
Profit before tax 7,688
------------------------------------ ----------- ----------- ------------- -----------
The following is an analysis of the Group's results by
reportable segment at 31 December 2021:
Nigeria Niger Unallocated Total
US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited
Segment depreciation, depletion
and amortisation 18,807 153 263 19,223
Segment non-current assets(2) 568,709 162,644 2,915 734,268
Segment non-current asset additions 32,535 1,779 184 34,498
Segment total assets 1,085,486 160,962 102,139 1,348,587
Segment total liabilities (938,513) (31,620) (71,716) (1,041,849)
-------------------------------------- ----------- ----------- ------------- -------------
1. Refer to note 5 for items included within Cost of Sales.
2. Includes Property, plant and equipment, Exploration and
evaluation assets and Right-of-use assets.
4. Revenue
Set out below is the disaggregation of the Group's revenue from
contracts with customers:
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
---------------------------------------- ----------- -----------
Gas sales 72,629 91,675
Oil and condensates sales 13,218 7,711
---------------------------------------- ----------- -----------
Revenue from contracts with customers 85,847 99,386
---------------------------------------- ----------- -----------
Gas sales represents gas deliveries made to the Group's
customers under long term take or pay gas sale agreements. The
Group sells oil and condensates at prevailing market prices.
Included within revenue from contracts with customers is revenue
of US$83.8 million (30 June 2021: US$89.6 million) relating to four
(30 June 2021: two) of the Group's customers who each contribute
more than 10% of revenue US$36.6 million, US$21.7 million, US$13.2
million, and US$12.3 million respectively (30 June 2021: US$61.3
million and US$28.3 million, respectively).
5. Cost of sales
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
----------------------------------------------------- ----------- -----------
Depletion - oil and gas, and infrastructure assets
(note 13) 16,432 18,335
Facility operation and maintenance costs 13,770 13,794
Royalties 2,925 2,157
33,127 34,286
----------------------------------------------------- ----------- -----------
6. Operating profit
Operating profit has been arrived at after charging:
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
-------------------------------------------- ----------- -----------
Staff costs 11,896 12,112
Depreciation - other assets (note 13) 370 380
Depreciation - right-of-use assets 544 508
Transaction and other related expenses(1) 7,262 2,341
-------------------------------------------- ----------- -----------
1. Included within Transaction and other related expenses are
costs incurred with respect of the Group's proposed acquisitions of
the Chad and Cameroon Assets, integration and IT activities and
other business development opportunities.
7. Finance income
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
--------------------------- ----------- -----------
Lease income 19 26
Bank interest income 161 98
Other interest income 93 204
273 328
--------------------------- ----------- -----------
8. Finance costs
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
------------------------------------------------- ----------- -----------
Interest on bank borrowings and loan notes 27,949 26,826
Amortisation of balances measured at amortised
cost(1) 3,898 7,004
Unwinding of decommissioning discount 2,749 2,488
Interest expense on lease liabilities 201 262
Bank charges 191 131
Other finance costs 1,839 2,021
------------------------------------------------- ----------- -----------
36,827 38,732
------------------------------------------------- ----------- -----------
1. Includes amounts due to unwinding of a discount on a
long-term payable, contract liabilities (note 18) and amortisation
of debt fees.
9. Fair value adjustment
During 2019 the Group issued a Senior Secured Note of US$20
million that includes a voluntary prepayment option whereby early
repayment will result in a discount to the contractual loan value.
As an embedded derivative, the option has been separated from the
host loan instrument and valued separately and accounted for as
fair value through profit or loss. As at 30 June 2022 the option
value was approximately US$3.0 million (31 December 2021 audited:
US$4.8 million), resulting in a charge of US$1.8 million (30 June
2021: gain of US$3.0 million). The decrease in the option value was
due to a worsening in credit bond spreads observed during the
period as well as an increase in market expectations around
interest rates. The increase in the option value during the prior
period was principally due to an improvement in credit bond spreads
observed during the period.
10. Foreign translation loss
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
--------------------------- ----------- -----------
Realised loss 945 3,962
Unrealised (gain)/loss (99) 6,981
--------------------------- ----------- -----------
846 10,943
--------------------------- ----------- -----------
Realised foreign translation loss for the six months ended 30
June 2022 mainly relates to Nigerian trade receivables which are
invoiced in US Dollars and where customers are able to pay in
Naira. Foreign translation loss for the six months ended 30 June
2021 mainly relate to the translation of Naira into US Dollars to
service US Dollar denominated obligations.
Unrealised foreign translation loss relates to the revaluation
of monetary items held in currencies other than US Dollars. During
the six months ended 30 June 2021 the Nigerian Naira devalued
against the US Dollar in May 2021 which created a significant
unrealised loss on monetary items held in Naira.
11. Taxation
The tax expense for the Group is:
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
------------------------------------------------------ ----------- -----------
Current tax
- Adjustments in respect of prior years (1,126) 3
- Current year 3,919 2,169
------------------------------------------------------ ----------- -----------
2,793 2,172
Deferred tax
- Adjustments in respect of prior years 193 15
- Write down and reversal of previous write downs 4,353 -
of deferred tax assets
- Origination and reversal of temporary differences 1,892 6,878
------------------------------------------------------ ----------- -----------
6,438 6,893
------------------------------------------------------ ----------- -----------
9,231 9,065
------------------------------------------------------ ----------- -----------
Income tax expense is recognised based on the actual results for
the period.
The tax charge for the period of US$9.2 million (30 June 2021:
charge of US$9.1 million) is made up of a current tax charge of
US$2.8 million (30 June 2021: US$2.2 million) and a deferred tax
charge of US$6.4 million (30 June 2021: charge of US$6.9 million).
The current tax charge principally arises on Nigerian profits. The
deferred tax charge principally relates to the utilisation of
losses in Nigeria, as well as a write down of deferred tax
assets.
12. Loss per share
Basic earnings per share amounts are calculated by dividing the
profit or loss for the period attributable to owners of the Company
by the weighted average number of ordinary shares outstanding
during the period.
Diluted earnings per share amounts are calculated by dividing
the profit or loss for the periods attributable to owners of the
Company by the weighted average number of ordinary shares
outstanding during the period, plus the weighted average number of
shares that would be issued on the conversion of dilutive potential
ordinary shares into ordinary shares. As there is a loss
attributable to the owners of the Company for the six months ended
30 June 2022, the diluted weighted average number of shares would
reduce the loss per share. Therefore, the basic weighted average
number of shares has been used to calculate the diluted loss per
share.
The weighted average number of shares outstanding excludes
treasury shares of 99,858,893 (30 June 2021: 41,966,942).
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
--------------------------------------------- ----------- -----------
Loss
Loss attributable to owners of the Company (20,264) (3,109)
--------------------------------------------- ----------- -----------
Number of Number
shares of shares
-------------------------------------------- --------------- -------------
Basic weighted average number of shares 1,142,656,405 954,116,177
Add: employee share options 5,243,720 3,840,024
-------------------------------------------- --------------- -------------
Diluted weighted average number of shares 1,147,900,125 957,956,201
-------------------------------------------- --------------- -------------
US cents US cents
------------------------- ---------- ----------
Loss per share
Basic loss per share 1.77 0.33
Diluted loss per share 1.77 0.33
------------------------- ---------- ----------
50,233,574 options granted under share option schemes are not
included in the calculation of diluted earnings per share because
they are anti-dilutive for the six months ended 30 June 2022 (30
June 2021: 50,233,574). These options could potentially dilute
basic earnings per share in the future.
13. Property, plant and equipment
Oil and Infrastructure Other
gas assets assets assets Total
US$'000 US$'000 US$'000 US$'000
------------------------------------------- ------------- ---------------- --------- ----------
Cost
Balance at 1 January 2021 (audited) 183,852 469,917 4,359 658,128
Additions 16,212 15,780 565 32,557
Decommissioning remeasurement adjustment (2,296) (39,569) - (41,865)
Balance at 31 December 2021 (audited) 197,768 446,128 4,924 648,820
Additions 983 854 4,132 5,969
Balance at 30 June 2022 (unaudited) 198,751 446,982 9,056 654,789
------------------------------------------- ------------- ---------------- --------- ----------
Accumulated depreciation
Balance at 1 January 2021 (audited) (20,327) (23,170) (1,924) (45,421)
Depletion and depreciation charge (16,742) (17,721) (735) (35,198)
Balance at 31 December 2021 (audited) (37,069) (40,891) (2,659) (80,619)
Depletion and depreciation charge (8,312) (8,120) (370) (16,802)
------------------------------------------- ------------- ---------------- --------- ----------
Balance at 30 June 2022 (unaudited) (45,381) (49,011) (3,029) (97,421)
------------------------------------------- ------------- ---------------- --------- ----------
Net book value
1 January 2021 (audited) 163,525 446,747 2,435 612,707
31 December 2021 (audited) 160,699 405,237 2,265 568,201
------------------------------------------- ------------- ---------------- --------- ----------
30 June 2022 (unaudited) 153,370 397,971 6,027 557,368
------------------------------------------- ------------- ---------------- --------- ----------
Upstream assets principally comprise the well and field
development costs relating to the Uquo and Stubb Creek oil and gas
fields in Nigeria. The Infrastructure assets principally comprise
the Nigerian midstream assets associated with the Group's network
of gas transportation pipelines, oil and gas processing facilities
and gas receiving facilities. Other assets typically include
vehicles, office equipment (including IT software) and building
improvements.
14. Trade and other receivables
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
--------------------------------------- ----------- -------------
Trade receivables 188,969 156,440
Receivables from a joint arrangement 3,645 67
Other financial assets 5,261 5,237
--------------------------------------- ----------- -------------
197,875 161,744
Expected credit loss (35,263) (29,345)
--------------------------------------- ----------- -------------
162,612 132,399
VAT receivables 677 694
Prepayments and other receivables 43,378 98,538
--------------------------------------- ----------- -------------
206,667 231,631
--------------------------------------- ----------- -------------
The following has been recognised in the Condensed Statement of
Comprehensive Income relating to expected credit losses for the
period:
2022 2021
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
----------------------------------------------------- ----------- -----------
Provision/(release) of expected credit losses 5,918 (739)
Expected credit loss and other related adjustments 5,918 (739)
----------------------------------------------------- ----------- -----------
15. Cash at bank
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
-------------------------------- ----------- -------------
Cash and cash equivalents 42,077 45,739
Amounts held for debt service 139,091 106,905
181,168 152,644
-------------------------------- ----------- -------------
Cash and cash equivalents include US$1.2 million (31 December
2021: US$1.1 million) of cash collateral on the Orabank revolving
facility. The cash collateral was at a value of XOF758.3 million
(31 December 2020: XOF626.4 million).
Amounts held for debt service represents Naira denominated cash
which is held by the Group for debt service, and this has been
separately disclosed from Cash and cash equivalents. In total,
approximately US$149.0 million (31 December 2021: US$132.8 million)
will be paid for the debt service from bank accounts designated as
Amounts held for debt service, and from Cash and cash
equivalents.
16. Trade and other payables
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
------------------------------- ----------- -------------
Trade and other payables
Trade payables 31,489 30,957
Accruals 30,950 62,927
VAT and WHT payable 16,717 13,783
Royalty and levies 4,471 5,196
Employee benefits 88 91
Other payables 2,888 3,817
------------------------------- ----------- -------------
86,603 116,771
Other payables - non-current
Employee benefits 3,617 3,415
3,617 3,415
------------------------------- ----------- -------------
90,220 120,186
------------------------------- ----------- -------------
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
17. Borrowings
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
---------------------------- ----------- -------------
Revolving credit facility 11,939 9,916
Bank loans 374,009 379,002
Senior Secured Notes 95,135 100,717
Other loan notes 28,843 34,610
509,926 524,245
---------------------------- ----------- -------------
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
------------------------- ----------- -------------
Current borrowings 402,497 415,593
Non-current borrowings 107,429 108,652
509,926 524,245
------------------------- ----------- -------------
18. Contract liabilities
Contract liabilities represents the value of gas supply
commitment to the Group's customers for gas not taken but invoiced
under the terms of the contracts. The amount has been analysed
between current and non-current, based on the customers' expected
future usage gas delivery profile. This expected usage is updated
periodically with the customer.
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
------------------------------------------- ----------- -------------
Amount due for delivery within 12 months 12,713 26,467
Amount due for delivery after 12 months 269,435 213,043
282,148 239,510
------------------------------------------- ----------- -------------
30 June 31 December
2022 2021
US$'000 US$'000
Unaudited Audited
------------------------------------------------ ----------- -------------
As at 1 January 239,510 190,237
Additional contract liabilities 46,175 61,033
Contract liabilities utilised (5,409) (18,345)
Unwinding of discount on contract liabilities 1,872 6,585
As at end of period 282,148 239,510
------------------------------------------------ ----------- -------------
The unwinding of the discount on contract liabilities relates to
the fair value adjustments made under IFRS 3: Business Combinations
following the acquisition of the Nigerian assets and entities in
2019. The fair value adjustment was calculated as the discounted,
expected cost of the future deliveries of gas volumes under the
terms of customer take-or-pay contracts. This discounted amount
unwinds relative to an apportioned amount of the contract
liabilities volumes at the date of acquisition that have
subsequently been utilised.
19. Cash flow reconciliations
The changes in the Group's liabilities arising from financing
activities can be classified as follows:
Borrowings Interest payable Lease liabilities Total
US$'000 US$'000 US$'000 US$'000
--------------------------------------------------- ------------ ------------------ ------------------- ----------
At 1 January 2022 (audited) 524,245 80,101 6,783 611,129
--------------------------------------------------- ------------ ------------------ ------------------- ----------
Cash flows
Repayment (30,545) (21,050) (527) (52,122)
Proceeds 12,810 - - 12,810
Realised loss on loan repayment 33 - - 33
--------------------------------------------------- ------------ ------------------ ------------------- ----------
(17,702) (21,050) (527) (39,279)
Non-cash adjustments
Payment in kind adjustment/accretion of interest 3,764 26,502 201 30,467
Net debt fees (1,236) - - (1,236)
Borrowing fair value adjustments 1,768 - - 1,768
Working capital movements - - 107 107
Foreign translation (913) 3 (453) (1,363)
Balance at 30 June 2022 (unaudited) 509,926 85,556 6,111 601,593
--------------------------------------------------- ------------ ------------------ ------------------- ----------
Borrowings Interest payable Lease liabilities Total
US$'000 US$'000 US$'000 US$'000
--------------------------------------------------- ------------ ------------------ ------------------- ----------
At 1 January 2021 (audited) 514,662 51,544 8,061 574,267
--------------------------------------------------- ------------ ------------------ ------------------- ----------
Cash flows
Repayment (8,794) (10,981) (335) (20,110)
Realised loss on loan repayment 175 - - 175
--------------------------------------------------- ------------ ------------------ ------------------- ----------
(8,619) (10,981) (335) (19,935)
Non-cash adjustments
Payment in kind adjustment/accretion of interest 1,380 26,025 262 27,667
Net debt fees 1,752 - - 1,752
Borrowing fair value adjustments (3,042) - - (3,042)
Working capital movements - - (291) (291)
Foreign translation (1,011) (90) 79 (1,022)
Balance at 30 June 2021 (unaudited) 505,122 66,498 7,776 579,396
--------------------------------------------------- ------------ ------------------ ------------------- ----------
20. Capital commitments
At 30 June 2022, capital commitments amounted to US$ 4.8 million
(30 June 2021: US$13.0 million).
21. Events after the reporting date
There are no events after the reporting date other than those
described within this announcement.
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