TIDMSAVE
RNS Number : 0973W
Savannah Energy Plc
13 April 2023
13 April 2023
Savannah Energy PLC
("Savannah", "the Company" or "the Group")
Q1 2023 Financial and Operational Update
Savannah Energy PLC, the British independent energy company
focused around the delivery of Projects that Matter is pleased to
announce a financial and operational update for Q1 2023.
Andrew Knott, CEO of Savannah Energy, said:
"This morning's update clearly demonstrates the strength and
potential of our business and the positive impact we are making in
our host countries: we are reporting like-for-like(1) organic Total
Revenues(2) growth of 26% year-on-year (with like-for-like(1) Total
Revenues(2) having now doubled since 2017); our oil and renewable
energy projects in Niger are now advancing at a rapid pace; and
COTCo in Cameroon continues to deliver a strong consistent
financial performance. On the new ventures front, we continue to
progress our planned acquisition of PETRONAS' assets in South Sudan
and expect to announce a series of new utility-scale renewable
power projects over the course of Q2 and Q3 2023.
At this time, I would like to express our gratitude to those who
have contributed to these successes - 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."
Q1 2023 Unaudited Financial Highlights
-- Q1 2023 Total Revenues(2) of US$147.6m comprising Q1 2023
Total Revenues(2) from Nigerian operations of US$71.0m (up 29% on
Nigerian operations Q1 2022 Total Revenues(2) of US$55.0m) plus
Chad upstream revenues of US$76.6m; and
-- Group cash balance of US$217.3m(3) and net debt of US$412.2m(4) .
Q1 2023 Operational Highlights
-- Q1 2023 average gross daily production was 54.9 Kboepd,
compared to average gross daily production of 21.6 Kboepd in Q1
2022. Excluding Chad production, Q1 2023 average gross daily
production on a like-for-like basis was 25.9 Kboepd, a 20% increase
compared to Q1 2022; and
-- Of the total average gross daily production of 54.9 Kboepd,
43% was gas, including a 22% increase in production from the Uquo
gas field compared to the same period last year, from 116.4 MMscfpd
(19.4 Kboepd) to 142.2 MMscfpd (23.7 Kboepd).
Q1 2023 vs Q1 2022 Average Gross Daily Production
Uquo Uquo Stubb Doba Total
Gas Condensate Creek Oil
(Kbopd) Oil (Kboepd)
(MMscfpd) (Kbopd) (Kbopd)
-----------------------
1 January-31 March
2023 142 0.2 2.0 29.1 54.9
----------- ------------ --------- --------- ----------
% of total production 43% 0.5% 3.5% 53%
----------- ------------ --------- --------- ----------
1 January-31 March
2022 116 0.2 2.0 NA 21.6
----------- ------------ --------- --------- ----------
% Increase 22% (3%) (1%) - 155%
----------- ------------ --------- --------- ----------
N.B. - Percentages in this table are calculated from exact
numbers, the figures above are rounded.
Cameroon Update
Savannah acquired an effective 41.06% indirect equity interest
in the Cameroon Oil Transportation Company ("COTCo") from
ExxonMobil on 9 December 2022. COTCo owns and operates the 903km
Cameroon oil export pipeline and the Kom e Kribi 1 floating storage
and offloading ("FSO") unit, which transport and store oil on
behalf of its customers who are in turn charged a transportation
tariff.
During Q1 2023 COTCo transported an average of 128.8 Kbopd of
crude oil with a total of 11 liftings conducted on behalf of its
customers. Each lifting saw the safe and successful transfer of
approximately 1 MMbbls of crude oil from the FSO to ocean going
vessels by COTCo on behalf of its customers.
It should be noted that for accounting purposes, Savannah's
ownership interest in COTCo is treated as an investment in an
associate and, therefore, income from COTCo will be equity
accounted for in Savannah's Consolidated Statement of Comprehensive
Income (i.e. Savannah will reflect a proportionate amount of net
income relative to its shareholding in COTCo as opposed to
proportionately consolidating the revenues and costs of COTCo).
Dividends received from COTCo will be reflected in the Consolidated
Statement of Cash Flows.
Niger Update
Savannah has continued progressing plans for the Early
Production Scheme on the approximately 35 MMstb of Gross 2C
Resources R3 East oil development. Bottomhole pumps and completion
equipment were ordered in Q1 2023, and a work-over rig solution has
been identified for a well test programme, which the Company
expects to carry out in Q4 2023. Following the well test result,
Savannah expects to issue a comprehensive field development plan
with first oil targeted in 2024 and production expected to ramp up
to a plateau rate of approximately 5 Kbopd for the initial
development. The crude is expected to be evacuated via the new
Niger-Benin export pipeline, which is currently under construction,
reported to be 75% completed and estimated to be fully operational
in Q4 2023.
Savannah's up to 250 MW Parc Eolien de la Tarka wind farm
project in Niger, which has the potential to increase Niger's
on-grid electricity supply by over 40%, has made significant
progress. All key studies required to achieve project sanction
(including wind measurement, environmental and social impact, grid
integration, security, cartography, road and aviation studies) have
either been completed or are in progress. The preliminary on-site
wind speed data measurements having proven to be highly encouraging
and we expect project sanction in 2024.
Nigeria Update
During Q1 2023 Savannah sold gas to seven customers including
Calabar Electricity Generation Company Limited, Lafarge Africa PLC,
Ibom Power Company Limited, First Independent Power Limited, the
Central Horizon Gas Company Limited, TransAfam Power Limited and
Notore Chemical Industries PLC. So as to advance the Company's
ability to maintain and grow our gas production levels over the
course of the coming years, Savannah is progressing the US$45
million compression project at the Uquo Central Processing Facility
("CPF"). Following the front-end engineering and the associated
order of long lead items, detailed design work commenced in Q1 2023
and is scheduled to be completed in Q4 2023.
Chad Assets Update
As previously announced on 24 March 2023, the President of the
Republic of Chad issued a Decree on 23 March 2023 nationalising
Savannah Chad Inc's ("SCI") (formerly Esso Exploration and
Production Chad Inc ("EEPCI")) upstream production assets in Chad;
subsequently on 31 March 2023 the Government of Chad passed a law
confirming the nationalisation of SCI's upstream production assets
and also providing for the nationalisation of Savannah's c. 40%
interest in Tchad Oil Transportation Company ("TOTCo"), the owner
and operator of the Chad section of the ETS.
Such nationalisation does not affect Savannah's 41.06% indirect
equity interest in COTCo.
The actions of the Republic of Chad are in direct breach of the
upstream conventions to which SCI and the Republic of Chad are,
amongst others, party, together with a direct breach of the
convention between TOTCo and the Government of Chad. These
nationalisations were made notwithstanding the fact that under
SCI's operatorship the historic production decline was immediately
reversed, with daily production averaging 29,349 barrels per day
since Savannah's ownership on 9 December 2022, an increase of c.9%
as against the equivalent period prior to Savannah taking control
of SCI. Savannah had also initiated plans to significantly increase
production further through an active investment programme.
Disputes under the upstream conventions are subject to the
jurisdiction of an ICC arbitral tribunal, seated in Paris. The
Company has commenced ICC arbitral proceedings against the
Government of Chad to seek full recompense for the loss that it has
and will suffer as a result of the nationalisation of SCI's
assets.
South Sudan Acquisition Update
Further to the Company's 12 December 2022 announcement, the
Company continues to advance the various workstreams required to
complete the reverse takeover of PETRONAS International Corporation
Limited's ("PETRONAS") entire oil and gas business in South Sudan,
and intends to publish an AIM Admission Document in H1 2023.
Further updates will be provided as and when appropriate.
Footnotes:
1. Excludes revenues from Chad.
2. 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 in comparison to Revenue recognised in the
Consolidated Statement of Comprehensive Income.
3. Within cash balance of US$217.3m, are amounts which are held
for debt service purposes and US$1.6m is restricted cash which
includes cash collateral and stamp duty escrow balances.
4. Net debt (defined as 'Total long and short term debt
exclusive of lease liabilities less Cash at bank and other escrow
monies').
For further information, please refer to the Company's website
www.savannah-energy.com or contact:
Savannah Energy +44 (0) 20 3817 9844
Andrew Knott, CEO
Nick Beattie, CFO
Sally Marshak, Head of IR & Communications
Strand Hanson (Nominated Adviser) +44 (0) 20 7409 3494
James Spinney
Ritchie Balmer
Rob Patrick
finnCap Ltd (Joint Broker) +44 (0) 20 7220 0500
Christopher Raggett
Tim Redfern
Panmure Gordon (UK) Ltd (Joint Broker) +44 (0) 20 7886 2500
John Prior
Hugo Rich
James Sinclair-Ford
Camarco +44 (0) 20 3757 4983
Billy Clegg
Owen Roberts
Violet Wilson
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR").
About Savannah Energy:
Savannah Energy PLC is an AIM quoted British independent energy
company focused around the delivery of Projects that Matter, active
in Cameroon, Niger and Nigeria.
Further information on Savannah Energy PLC can be found on the
Company's website: www.savannah-energy.com.
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END
UPDEASLDFLLDEEA
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