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Savannah Energy beats FY23 guidance, advances renewables portfolio

09:24, 7th June 2024
Victor Parker
Vox Newswire

Savannah Energy (SAVEFollow | SAVE, an Africa-focused oil and gas company, announced its audited results for the year ended December 31, 2023 (FY23).

Savannah reported average gross daily production of 23.6 Kboepd, broadly in line with FY22 production on a like-for-like basis. The company had 696 MW of renewable energy projects in motion at year-end, targeting a portfolio of 1 GW by end of 2024, and 2 GW by end of 2026.

Savannah met or exceeded its financial guidance for FY23, with total revenues of US$261m (11% ahead of guidance), and operating expenses of US$68.8m (8% below guidance). Capex was US$13m compared to guidance of 'up to US$30m'. The average realised sales price was US$4.51/Mscfe, a 9% increase on FY22.

The group signed a 10-year agreement with Amalgamated Oil Company Nigeria to purchase up to 20 MMscfpd of gas for onward sale to its gas customers. SAVE also said its US$45m compression project in Nigeria remained on track, with front-end engineering design and associated order of long lead items completed in Q4 2023, and project completion expected in H2 2024.

In terms of sustainability targets, Savannah published its first disclosure reports in accordance with the TCFD and SASB standards in FY23. Post-period, SAVE also published its first disclosure reports in accordance with the Global Reporting Initiative and the UN Sustainable Development Goals. The company maintained a low carbon intensity metric of 10.7 kg CO2e/boe in FY23, 45% lower than the Supermajor average of 19.4 kg CO2e/boe. Total contributions to host nations were US$52m.


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Robust performance from Savannah in FY23, with revenues, costs and capex exceeding guidance as the company's core business continued to perform strongly. At the same time, SAVE continued to expand and diversify its portfolio, advancing two significant hydrocarbon acquisitions in South Sudan and Nigeria (PETRONAS and SIPEC), as well as its renewables portfolio.

Savannah continued to increase its footprint in Nigeria, with gas sold to 9 customers during the period, and a number of new and extended sales agreements signed totalling 101 MMscfpd. Furthermore, a 10-year deal was signed with Amalgamated Oil Company Nigeria for up to 20 MMscfpd of gas for SAVE's customers, providing a commercial route for the 3rd party stranded resource.

The strong sales momentum in Nigeria continued post-period, with a 12-month contract extension signed in January 2024 with FIPL to supply up to 65 MMscfpd to its FIPL Afam, Eleme, and Trans Amadi power stations. To further grow its gas production in Nigeria, SAVE is advancing a US$45m compression project, expected to complete in H2 2024.

As mentioned, a deal was signed in March 2024 to acquire 100% of SIPEC, whose main asset is a 49% interest in the Stubb Creek field in Nigeria, consolidating SAVE's interest in the asset. SAVE plans to double production from the field to 4.7 Kbopd within 12 months via a de-bottlenecking programme. SAVE is also in the process of acquiring PETRONAS' assets in South Sudan, which yielded 149 Kbopd in 2023.

Notably, Savannah's ambitious energy diversification strategy is advancing at pace with 696 MW of renewable projects in motion throughout Africa. The company continues to move toward its near-term target of 1 GW of renewable projects in motion by end of 2024, and 2 GW by end of 2026. From its hydrocarbon business, SAVE maintained low carbon emissions in FY23 of 10.7 kg CO2e/boe, 45% lower than the Supermajor average.

Savannah maintained ambitious guidance for FY24, expecting total revenues in excess of US$245m, operating and administrative expenses of up to US$75m, and capital expenditure of up to US$50m.

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