Uche Cecil Izuora
Savannah Energy Plc, has provided update on its oil and gas operations in Nigeria showing a consistent progress in gas infrastructure development that will support its medium term gas production initiatives.
Savannah said its midstream subsidiary, Accugas Limited has now drawn N279 billion under its new N340 billion transitional debt facility, with proceeds used to pay down its US$ facility.
The facility should be fully drawn by year end, with management requesting an increase in the size of the facility to enable the remaining $225m balance to be converted into Naira.
This process, when complete, will align Accugas’ debt facility with the currency in which gas revenues are received. The company also continues to advance its plans for a potential long-dated domestic bond issuance to ultimately replace the NGN transitional facility.
According to the update, the company’s US$45 million Uquo Central Processing Facility (“Uquo CPF”) compression project in Nigeria is right on track for completion of construction before year-end, with commissioning taking place in Q1 2025, enabling the expansion of gas production in the medium term, with FY25F gas volumes expected to remain broadly flat Year-On-Year (YoY).
There are also plans to drill an additional Uquo development well and exploration well in H2 FY25.
The transaction to increase Savannah’s ownership of the Stubb Creek asset to 100 per cent for $61.5m is now scheduled to complete in Q1 FY25.
The update shows that its gross production in Nigeria has averaged 22.7kboe/d (88% gas; flat YoY), generating Total Income of $320m and $257m in the 10-months to end-October, up from $233m and $202m respectively in H1 FY24.
Commenting on the report, Andrew Knott, Chief Executive Officer (CEO) of Savannah Energy, said: “I am pleased to provide an operational and financial update which demonstrates the continued progress we have made as a business in 2024. 2025 is clearly going to be an exciting year for our Company: we have a large operational programme in Nigeria which is expected to enhance both our oil and gas production levels and capacity; we intend to progress our R3 East oil development project in Niger; we continue to pursue key acquisitions in the upstream oil and gas space; and we expect to announce plans significantly expanding our renewable energy business. Fundamentally, Savannah remains unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND renewable energy sectors.”