Savannah Energy (SAVE) , an Africa-focused oil and gas company, announced unaudited half-year results for the 6 months ended June 30 2023 (H1 2023).
Savannah reported total revenues of US$138.7m, an 8% increase from last year. Adjusted EBITDA likewise increased 8% to US$108.2m and adjusted EBITDA margin remained high at 78%. Operating and administrative expenses increased to US$27.4m from US$24.5m a year ago.
Savannah swung into a post-tax profit of US$46.8m from a US$20.5m loss in H1 2022. Net debt at period-end was US$443.4m from US$404.9m in H1 2022, with leverage broadly the same at 1.9x.
The energy company reiterated its full-year revenue guidance of "greater than US$235m". Operating and administrative expenses guidance was also maintained at "up to US$75m", and total capex guidance was reduced from "up to US$60m" to "up to US$30m", reflecting the rephasing of certain planned capital projects in Nigeria.
Operationally, Savannah achieved average gross daily production of 25.3 Kboepd from its Nigerian operations, a 12% increase year-on-year. Gas production from the Uquo field increased 15% to 138.5 MMscfpd on high demand.
During the period, Savannah sold gas to 8 principal customers, with several new and extended contracts agreed. Among these were an agreement with Amalgamated Oil Company Nigeria to purchase up to 20 MMscfpd over the next 10 years, a new gas sales agreement with Shell Nigeria Gas, and a contract extension with Shell Petroleum Development Company of Nigeria.
Momentum continued post-period with contract extensions signed with Central Horizon Gas Company, First Independent Power, and Notore Chemical Industries for a total of up to 85 MMscfpd.
On the renewables front, Savannah had up to 676 MW of renewable energy projects in motion at period-end while targeting 1 GW+ by mid-2024.
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Strong results from Savannah in H1 across the board, with a 12% increase in average daily production in Nigeria, and 8% increase in both total revenues and adjusted EBITDA. The energy company remains on track to meet its full-year revenue target of US$235m with a now halved capex of US$30m.
Notably, Savannah's ambitious energy diversification strategy is advancing at pace with 676 MW of renewable projects in motion. This includes agreements signed during the period for up to an 75 MW Bini a Warak Hydroelectric Project in Cameroon and the development of two proposed solar PV power plants in Niger with combined capacity of up to 200 MW.
Savannah's inaugural renewable project for 250 MW of wind generation at Parc Eolien de la Tarkam, Niger also made significant progress in H1 2023. All key studies required to achieve project sanction were either completed or materially advanced. Overall, Savannah continues to move toward its near-term target of having 1 GW+ of renewable projects in motion, expected to be reached in mid-2024.
Savannah also moved closer in H1 to completing the acquisition of PETRONAS International's energy business in South Sudan, intending to publish an AIM admission document before December 15 2023. In Niger, Savannah remains committed to the 35 MMstb (Gross 2C Resources) R3 East oil development in South East Niger, though progress was slowed by the recent closing of the Benin-Niger border, with a further update expected in Q4 2023.
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