Savannah Energy sees 34% boost in gas production at Niger assets
(AIM:SAVE ) said it has increased its gas production levels by 34% since it wrapped up its acquisition of Nigerian oil and gas company Seven Energy last November.
The energy firm said it expects these levels to increase further during the year as it attracts new customers such as First Independent Power Limited which it gained earlier this year.
During its ownership period of its Niger assets, Savannah has seen its average gross production figure climb 25% higher to 19.6 Kboepd compared to 15.7 Kboepd for the corresponding 2018-19 period.
Specifically, this includes a 34% increase in Uquo gas production while the company reached a Q1 peak daily production rate in February 2020
The group reported total cash collections from its Nigerian Assets for FY2019 of US$168.8m while cash collections to date since the start of the ownership period were at US$96m.
These cashflows have enabled it to achieve a significant deleveraging during its ownership period with $40m restructured debt taken on as part of the acquisition paid down by 31 March 2020.
As of 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.US$130m p.a.
Shares in Savannah Energy were trading 3.75% higher at 8.3p this afternoon.
Meanwhile, the group published a new CPR this morning confirming the robust commerciality of its planned early production system as well as the wider potential of its Niger asset base.
“The robust economics and growth potential of the R3 East area and our wider Niger asset portfolio should be clear for all to see,” said Andrew Knott, CEO of Savannah Energy.
Savannah said the report has shown a continued recognition of the low technical risk profile of the Alternances as well as the significant upside that other exploration plays could offer.
“Our large seismically identified portfolio of 146 prospects and leads serves to again demonstrate the strong future 'running room' the assets have,” the statement added.
The group said it hopes to return to an operational phase in Niger at some point this year if economic conditions permit it.
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