Savannah Energy (SAVE ), an Africa-focused oil and gas company, issued a financial and operational update for Q1 2023. The company reported total revenues for Q1 2023 of US$147.6m, up 26% year-on-year, comprising US$71m from Nigerian operations (up 29% year-on-year) and Chad upstream revenues of US$76.6m. Savannah's cash balance stood at US$217.3m with net debt of US$412.2m.
It reported average gross daily production of 54.9 Kboepd in Q1 2023, compared to 21.6 Kboepd in Q1 2022. Excluding Chad production, Q1 2023 average gross daily production LFL was 25.9 Kboepd, a 20% increase compared to Q1 2022.
Of the total 54.9 Kboepd, 43% was gas, including a 22% increase in production from the Uquo gas field in Nigeria compared to Q1 2022 (from 19.4 Kboepd to 23.7 Kboepd).
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Savannah's aggressive expansion is beginning to bear fruit, with oil and renewable energy projects in Niger rapidly advancing, and COTCo in Cameroon delivering a steady cash flow. The acquisition of Petronas in South Sudan is also advancing at a rapid pace, and a new series of utility-scale renewable projects are planned for Q2 and Q3 2023.
In Cameroon, Savannah acquired a 41% indirect interest in COTCo from ExxonMobil on 9 December 2022. COTCo owns and operates the 903km Cameroon oil export pipeline and the Kome Kribi 1 FSO unit. In Q1 2023, COTCo transported on average 128.8 Kbopd of crude oil with a total of 11 liftings conducted.
In Niger, Savannah advanced plans for the Early Production Scheme on the approx. 35 MMstb of Gross 2C Resources R3 East oil development. A well test programme is expected in Q4 2023 after which Savannah expects to issue a comprehensive field development plan with first oil targeted for 2024.
In Nigeria, Savannah sold gas to 7 customers in Q1 2023, including Calabar Electricity Generation, Lafarge Africa, Ibom Power, First Independent Power, Central Horizon Gas, TransAfam Power, and Notore Chemical Industries. In order to keep up with demand, Savannah is advancing the US$45m compression project at the Uquo CPF. Design work commenced in Q1 2023 and is scheduled for completion in Q4 2023.
In Chad, the government nationalised Savannah Chad's upstream production assets and Savannah's 40% interest in Tchad Oil Transportation Company (TOTCo). The nationalisations will not affect Savannah's aforementioned 41% 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 nationalisations.
In South Sudan, Savannah continues to advance its reverse takeover of Petronas International's entire oil and gas business in the country. An AIM admission document is expected in H1 2023.
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.
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