Savannah Energy PLC, the British independent energy company focused around the delivery of projects that matter, has announced its unaudited half-year results for the six months ended 30 June 2024.

The H1 2024 Unaudited Results showed a strong financial performance, with the company’s total income increasing by 40% to US$233.4 million, compared to US$167.6 million in H1 2023. This comprises total revenues of US$123.5 million and other operating income of US$109.9 million.
Its operating profit also stood at US$152.3 million, 130% higher than H1 2023 (US$66.2 million), with adjusted EBITDA of US$91.6 million, compared to US$108.2 million in H1 2023. This excludes other operating income which when included shows a 47% increase year-on-year to US$201.5 million, compared to US$137.1 million in H1 2023.

The report also shows that the company’s operating expenses plus administrative expenses came up to US$75 million, and capital expenditure of up to US$50 million.
In terms of operations, its average gross daily production in Nigeria for the period stood at 24.4 Kboepd, representing an increase of 3% compared to FY 2023 (23.6 Kboepd).

The report also shows that company’s renewable energy projects in motion at period-end rose to 696 MW. A strong believer in Africa’s transition to renewable energy, Savannah which aims to become one of the largest renewable energy development companies in Africa over the next two years with a rapidly growing pipeline of solar, wind, and hydro power projects is targeting a portfolio of up to 1 GW+ of renewable energy projects in motion by end 2024 and up to 2 GW+ by end 2026.

Andrew Knott, CEO of Savannah Energy, responding to the report noted: “I am pleased to report our results for the first six months of 2024, as well as the wider progress we are making developing our business. Key highlights in H1 included the delivery of US$233m of Total Income1 and the announcement of our planned acquisition of SINOPEC’s upstream assets in Nigeria. Alongside this, we are pleased to report strong progress in the development of our renewable energy business, particularly relating to our planned projects in Niger and Cameroon. Looking forward we expect to make a series of announcements around our entry into further renewable energy projects prior to year-end.

“We remain 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.”

Operational Review

Nigeria
During 2024 YTD, Savannah’s subsidiary, Accugas Limited agreed and extended three gas contracts for a total of up to 105 MMscfpd. These include the extension of the agreement with First Independent Power Limited (“FIPL”) in January 2024 for an additional 12-month period, whereby Accugas is supplying FIPL’s FIPL Afam, Eleme and Trans Amadi power stations with up to 65 MMscfpd of gas; a new 24-month agreement signed in July 2024 with Ibom Power Company Limited, owner of the Ibom power station, to supply up to 30 MMscfpd of gas, following the expiration of the previous 10-year agreement; extension of the agreement with Central Horizon Gas Company Limited (“CHGC”) was signed in August 2024 for an additional 12-month period, whereby Accugas is supplying CHGC with up to 10 MMscfpd of gas.

The company also continues to make progress on the US$45 million compression project at the Uquo Central Processing Facility (“CPF”), and project remains on budget and on track to be completed during 2024. The company is also currently working on a proposed further development programme for the Uquo field which is expected to see additional wells drilled in 2025 and 2026.

SIPEC Acquisition
In March 2024, Savannah announced the proposed acquisition (via two separate transactions) of 100% of SIPEC for a total consideration of US$61.5 million. SIPEC’s principal asset is the 49% non-operated interest in Stubb Creek. A subsidiary of Savannah, Universal Energy Resources Limited, is the 51% owner and operator. The company expects this to be completed in Q4 2024. The transaction consideration is expected to be funded through a new senior debt facility arranged by Standard Bank of South Africa Limited and the existing cash resources of the Company.

As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. Savannah’s Reserve and Resource base is expected to increase by approximately 46 MMboe following completion of the SIPEC Acquisition. SIPEC oil production is estimated at an average of 1.4 Kbopd for 2024. Following completion of the SIPEC Acquisition, Savannah plans to implement a de-bottlenecking programme at the Stubb Creek processing facilities. It is anticipated that within 12 months of completion of the acquisition, this will lead to Stubb Creek gross production increasing by 135% to approximately 4.7 Kbopd. Importantly, the SIPEC Acquisition also secures significant additional feedstock gas available for sale to its Accugas subsidiary, underpinning Savannah’s long-term ambition to be the gas supplier of choice in Nigeria.

Government of Niger. A sanctioning decision on these projects is expected in 2025, with first power in 2027.
Cameroon
Substantial progress has been made on the Bini a Warak Hybrid Hydroelectric and Solar Project in Cameroon, following the approval of the optimisation and proposed redesign of the project given by the Minister of Water and Energy. The redesigned project, involving the construction of a hydroelectric dam on the Bini River in the northern Adamawa region of Cameroon, now incorporates photovoltaic solar, raising its installed power generation capacity from up to 75 MW to up to 95 MW. Savannah continues to progress the project towards an anticipated project sanction in 2026, with first power targeted in the 2028 to 2029 window.

South Sudan
Savannah remains in active discussions regarding a potential transaction in South Sudan. A further update is expected to be made in early November.
Chad Arbitration Update
As previously disclosed in Savannah’s 2023 Annual Report, 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. Its other 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.
Savannah expects 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.
Sustainability
Savannah published its Task Force on Climate-Related Financial Disclosures 2023 disclosure report and its maiden disclosure report in accordance with its chosen 13 United Nations Sustainable Development Goals in June 2024. It continues to progress its 2024 sustainability performance measurement and reporting in line with its sustainability strategy.