Savannah Petroleum - Re: SAVP Stream Log - Savannah Energy A financial and...

Savannah Energy A financial and operational update from SAVE this morning and they announce that FY cash collections from their Nigeria assets were $168.8m and from the beginning of their ownership to date in 2020 $96m. They are already seeing significant deleveraging with $40m of the restructured debt paid down by 31/3/20. AIIM acquired a 20% interest in SUGL and Accugas in return for $54m in cash giving an implied combined valuation of $270m of those assets, most impressive. Average daily gross production increased by 25% during SAVE’s ownership to 19.6 koepd (15.7) which includes a 34% increase in Uquo gas production from 77 MMscfd to 103.8 MMscfd with a peak daily rate of 164 MMscfd. They have also announced a new GSA, the first in five years, with FIPL for their Afam power plant, in addition successful transfers of operatorship of both the Uquo Central Processing Facility and the FUN Manifold crude gathering station, from Frontier Oil Limited to Savannah. As previously announced and based on the CPR prepared by CGG and published on 11 December 2019, net asset-level free cash flow generation, on a maintenance adjusted take-or-pay basis, by the Nigerian Assets, assessed to be an average of c.$130m p.a. 2020–2023. In Niger the company issue an updated CPR for those assets by CGG, they give 35 MMstb of gross 2C resources for R3 East discoveries with an additional 90 MMstb of gross unrisked prospective, in best case, with tie-in distance of R3 East facilities. In the CGG report, a subset of 11 prospects and leads from the extensive exploration portfolio comprising 146 prospects and leads are given unrisked prospective best case of 360 MMstb. Savannah plans to deliver the development of the R3 East and continue to progress with the installation of the EPS within 12 months, market conditions and finance permitting. The R4 area previously relinquished will now be combined with units R1/R2 PSC area the thus retaining the full acreage position previously covered by the R1/R2 PSC and the R3/R4 PSC. Andrew Knott, CEO is clearly pleased, ‘In Nigeria, we are responsible for the provision of gas supplies to providers of over 10% of the country’s current power generation capacity, a responsibility we take very seriously . In this time of global uncertainty, it has been widely reported in the local press that many companies have struggled to supply gas-for-power in recent months, which has led to significant power outages in country. In stark contrast Savannah … has increased our gas production levels by 34% since completing the acquisition of the Nigerian Assets. We continue to expect to increase production levels further during the course of this year as we add new customers, such as FIPL who we announced earlier this year.’ Overall this is exceptional progress by Savannah and give significant optimism for the future.