Savannah Energy Provides 2024 Operational And Financial Updates, Outlines FY25 Plans For Nigeria & Niger

drawdown and carries an interest rate of SOFR + 8.5% (reducing to 8% once certain milestones have been achieved).

As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. Following completion of the SIPEC Acquisition, Savannah’s reserve and resource base is, therefore, expected to increase by approximately 46 MMboe from 158 MMboe to 204 MMboe (on a pro-forma basis as at 1 January 2024). SIPEC oil production is estimated at an average of 1.8 Kbopd for 2024.

Following completion of the SIPEC Acquisition, we plan an expansion programme to increase the processing capacity of the Stubb Creek Field facilities. It is anticipated that this will lead to Stubb Creek Field gross production increasing from 2.6 Kbopd (average for 1 January – 31 October 2024) to approximately 4.7 Kbopd. Importantly, the SIPEC Acquisition also secures significant additional feedstock gas available for sale to our Accugas subsidiary.

we presented preliminary commercial and technical proposals to the Government of Niger. This project, if successfully developed, is expected to generate reliable, affordable energy for Niger and supply up to 12% of Niger’s electricity demand, based on 2026 energy demand predictions. However, the priority of both the Government of Niger and Savannah is to progress the Parc Eolien de le Tarka wind farm project ahead of the solar project.

A wholly owned Savannah subsidiary has also signed an agreement with a development partner whereby an approximate 150 MW wind farm project would be developed on a 70:30 basis (in Savannah’s favour), potentially further expanding the Company’s geographical footprint in West Africa. This project has completed the key technical and environmental studies and has made substantial progress in negotiating the project’s power purchase agreement. Savannah’s commitments to invest will start upon signature of a power purchase agreement for the project, the timing of which is yet to be agreed with the country’s Government and considered in the context of its wider power sector development plans, which we understand to currently be under review.

The Group has performed in line with expectations YTD and guidance for the full year is reconfirmed.

Total Income for 10M 2024 is US$320.3 million (10M 2023: US$231.0 million), comprising Total Revenues of US$207.7 million (10M 2023: US$202.1 million) and Other operating income of US$112.6 million (10M 2023: US$28.9 million). Other operating income primarily relates to the re-billing of foreign exchange losses incurred through the conversion of Naira paid invoices into US dollars.

Cash collections for 10M 2024 were US$239.8 million (10M 2023: US$189.2 million). As at 31 October 2024, cash balances stood at US$53.4 million (31 December 2023: US$107.0 million) and net debt at US$568.7 million (31 December 2023: US$473.7 million).

Adjusted EBITDA including Other operating income was US$257.3 million (10M 2023: US$170.8 million).

In January 2024, a new NGN 340 billion four year-term transitional facility was signed by Accugas with a consortium of five Nigerian banks. Year to date, NGN 279 billion of this facility has been drawn down, with the resulting funds being converted to US$, which, along with cash held, has been used to partially prepay the existing Accugas US$ facility. It is expected that the NGN transitional facility will be fully drawn by end of 2024 and that a balance of approximately US$225 million will remain outstanding at that point under the Accugas US$ facility.

As contemplated in the documentation for the transitional facility, we have requested an increase in the facility to enable the remaining outstanding US$ balance to be converted into Naira, allowing the remainder of the Accugas US$ facility to be fully repaid within H1 2025. This process, when complete, will align Accugas’ debt facility with the currency in which gas revenues are received.

We also continue to advance plans for a potential long-dated domestic bond issuance to ultimately replace the NGN transitional facility.

As previously disclosed in Savannah’s 2023 Annual Report, our wholly owned subsidiary, Savannah Chad Inc (“SCI”), has commenced arbitral proceedings against the Government of the Republic of Chad and its instrumentalities in response to the March 2023 nationalisation of SCI’s rights in the Doba fields in Chad, and other breaches of SCI’s rights. Another wholly owned subsidiary, Savannah Midstream Investment Limited (“SMIL”), has commenced arbitral proceedings in relation to the nationalisation of its investment in Tchad Oil Transportation Company, the Chadian company which owns and operates the section of the Chad-Cameroon pipeline located in Chad. SMIL has also commenced arbitral and other legal proceedings for breaches of SMIL’s rights in relation to Cameroon Oil Transportation Company (“COTCo”), the Cameroon company which owns and operates the section of the Chad-Cameroon pipeline located in Cameroon.

We expect the arbitral proceedings to be concluded in the second half of 2025. SCI and SMIL are claiming in excess of US$840 million for the nationalisation of their rights and assets in Chad, and SMIL has a claim valued at approximately US$380 million for breaches of its rights in relation to COTCo. Whilst the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation, no compensation has been paid or announced by the Government of the Republic of Chad to date.

Savannah remains ready and willing to discuss with the Government of the Republic of Chad an amicable solution to the disputes. However, in the absence of such discussions, the Group intends to vigorously pursue its rights in the arbitrations.

As previously announced, Savannah continues discussions with the various stakeholders around an alternative transaction structure in relation to the proposed acquisition of the ex-PETRONAS assets in South Sudan. Savannah management believe that any transaction which would ultimately be completed would be on significantly different terms to that envisioned when the transaction was initially announced in December 2022 with the likely involvement of multiple acquiring parties. We continue to believe that a transaction could be potentially accretive to the Company and expect to provide a further update on progress made by mid to late December 2024.

The assets themselves are estimated to have produced an average of 81 Kbopd on a gross basis in 2024 to end October, reduced from approximately 150 Kbopd in FY 2023, given the prolonged downtime experienced by the Bashayer Pipeline Company (“BAPCO”) pipeline, which exports a significant portion of the country’s oil production.