Lagos — Savannah Energy’s production from production fields in Africa improved drastically as it issued its financial and operational update for Q1 2023.
For Q1 2023 The company reported total revenues of US$147.6m, up 26 percent year-on-year, comprising US$71m from Nigerian operations (up 29 percent year-on-year) and Chad’s upstream revenues of US$76.6m. Savannah’s cash balance stood at US$217.3m with net debt of US$412.2m.
Q1 2023 average gross daily production was 54.9 barrels of oil equivalent per day Kboepd, compared to the 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).
During Q1 2023 in Nigeria, Savannah Energy 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, Notore Chemical Industries PLC.
To advance the Company’s ability to maintain and grow our gas production levels over the coming years, Savannah is progressing with 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.
In Cameroon, Savannah Energy 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 Kome 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.
In Niger, Savannah Energy has continued progressing with 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 program, 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 the first oil targeted in 2024 and production is expected to ramp up to a plateau rate of approximately 5 Kbopd for the initial development.
In Chad, the government nationalized Savannah Chad’s upstream production assets and Savannah’s 40 percent interest in Tchad Oil Transportation Company (TOTCo).
The nationalizations will not affect Savannah’s aforementioned 41.06 percent indirect equity interest in COTCo. Savannah condemned the actions of the Chadian government and said it has raised the issue with the Paris-based ICC arbitral tribunal, seeking full recompense for the loss it will suffer as a result of the nationalization of SCI’s assets.
In South Sudan, 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.
Andrew Knott, CEO of Savannah Energy, said “This morning’s update 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 throughout 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.”
Overall, Savannah’s business is growing in all four countries where it currently operates. The growth trend of the past 4 years is expected to continue in 2023, especially as the company’s renewable portfolio begins to add value.