Savannah Energy Plc first half (H1) 2024 unaudited results showed a robust financial and operating performance as the company extends its footprint on the energy landscape in Africa.
In the review six months period, Savannah’s operating profit stood at $152.3 million, 130 percent higher than H1 2023 ($66.2 million).
Adjusted EBITDA, which excludes other operating income, decreasing slightly to $91.6 million, compared to $108.2 million in H1 2023, but when included, it shows a 47 percent year-on-year increase to $201.5million.
Posting robust financial performance, the company’s total income increased by 40 percent to $233.4 million, compared to total income of $167.6 million in H1 2023.
This comprised total revenues of $123.5 million and other operating income of $109.9 million, the latter associated with the billing of foreign exchange (FX) losses incurred by its Nigerian subsidiary, Accugas Limited, as it converted the Naira cash it received into US dollars.
“I am pleased to report our results for the first six months of 2024, as well as the wider progress we are making developing our business.
“Key highlights in H1 included the delivery of $233million of Total Income1 and the announcement of our planned acquisition of SINOPEC’s upstream assets in Nigeria”, said Andrew Knott, Chief Executive Officer, Savannah Energy.
Savannah Energy average daily production in Nigeria rose 3 percent to 24.4 Kboepd, where its midstream subsidiary, Accugas Limited, supplies gas enabling circa 20 percent of the country’s thermal power generation capacity.
The company also highlighted progress around its ambitions for its renewable energy division across Africa.
Savannah also appears to have managed its costs very well. For instance, on a unit of production basis, the report shows that its costs remained stable at $1.1/Mscfe, the same as in H1 2023. This is mainly due to the steps that the company took to reduce central costs over the period.
The report provides update on Savannah’s operations in Nigeria, with its Nigerian business continuing to deliver a strong and consistent operating performance.
In addition to posting a 3 percent increase in average gross daily production in Nigeria to 24.4 Kboepd, compared to FY 2023 (23.6 Kboepd), Savannah’s subsidiary, Accugas, consolidated its market leadership during the period, agreeing and extending three gas contracts for a total of up to 105 MMscfpd.
In January this year, Accugas renewed its agreement with First Independent Power Limited for an additional 12-month period. The renewal enables Accugas to continue to supply the FIPL Afam, Eleme, and Trans Amadi power stations with up to 65 MMscfpd of gas.
In July, Accugas also signed a new 24-month agreement with Ibom Power Company Limited, owner of the Ibom power station, to supply up to 30 MMscfpd of gas, following the expiration of the previous 10-year agreement.
A month later, it extended its agreement with Central Horizon Gas Company Limited for an additional 12-month period, whereby Accugas will supply CHGC with up to 10 MMscfpd of gas.
Savannah looks set to increase its hydrocarbon assets in country, announcing in March this year that it has signed separate Share Purchase Agreements with Sinopec International Petroleum Exploration and Production Corporation and Jagal Ventures Limited to acquire 100 percent of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
SIPEC’s principal asset is a 49 percent non-operated interest in the Stubb Creek oil and gas field, located in Akwa Ibom State, Nigeria. An affiliate of Savannah, Universal Energy Resources Limited, is the 51 percent owner and operator.
The company anticipates that, within 12 months following completion of the acquisition, Stubb Creek gross production should increase by approximately 2.7 Kbopd to approximately 4.7 Kbopd through implementation of a de-bottlenecking programme.
The company is also set to complete work on its $45 million gas compression project at its Uquo gas Central Processing Facility that will allow Accugas to continue to provide reliable gas supplies to customers for years to come.
The system comprises two parallel trains with a capacity of 160 MMscfpd each and is designed to increase the gas export pressure. The company is also currently working on a proposed further development programme for the Uquo field which is expected to see additional wells drilled in 2025 and 2026.
“Alongside this, we are pleased to report strong progress in the development of our renewable energy business, particularly relating to our planned projects in Niger and Cameroon.
“Looking forward we expect to make a series of announcements around our entry into further renewable energy projects prior to year-end. We remain unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND renewable energy sectors,” Andrew Knott further said.
Since the establishment of its Renewable Energy Division in 2021, Savannah has always shown clear ambitions for renewable energy in Africa, complementing its hydrocarbon assets. Its H1 2024 report shows that the company’s renewable energy projects in motion at period-end has risen to 696 MW.
A strong believer in Africa’s transition to renewable energy, Savannah’s target is to become one of the largest renewable energy development companies in Africa over the next two years with a rapidly growing pipeline of hydro, wind and solar power projects, targeting a portfolio of up to 1 GW+ of renewable energy projects in motion by end 2024 and up to 2 GW+ by end 2026.
Savannah also stated in the report that it remains committed to the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, as part of its determination to continue to deliver on projects that matter in the country and other markets where it operates on the continent.
The Niger-Benin oil export pipeline which is now fully operational continues to provide a clear route to international markets for crude oil produced from its R1234 contract area. Savannah says that it continues to progress its planned four well testing programme and is in the process of mobilising the required long lead item equipment into country.
According to the half year report, the company also continues to make significant impact in Cameroon with the Bini a Warak Hybrid Hydroelectric and Solar Project well on schedule, following the approval of the optimisation and proposed redesign of the project given by the country’s Water and Energy minister.
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