Savannah Energy Plc, the British independent energy company focused around activities in Nigeria and Niger, has announced its unaudited preliminary results for the 2019 financial year, which include approximately six weeks of operations in Nigeria, following the successful acquisition of Nigerian assets in November 2019, together with a financial and operational update for the first half of 2020.
The company recorded full year 2019 maiden revenues of $17.8m comprising $16.9m of gas sales and $0.9m of liquids sales. Production from the company’s Nigerian Assets for 2019 rose 32% to 17.2 Kboepd from 13.0 Kboepd in 2018.
Speaking about the financial results, Andrew Knott, CEO of Savannah Energy, said, “2019 was a pivotal year for our Company. We completed the Nigerian Asset acquisition in November 2019, which transformed Savannah into a highly cash flow generative full cycle energy company. Since acquiring the Nigerian Assets, we have made significant strides in terms of operational and financial progress, as seen with the strong production figures and robust cash collections in H1 2020, further strengthened our leadership team and stand poised to capitalise on the numerous opportunities that our asset portfolio in Nigeria and Niger presents us with.’’
In the first half of 2020, cash collections from the Nigerian Assets stood at $82.1m compared to $55.3m within the same period in 2019. Average gross daily production, of which 89% was gas, increased 18% during the first half of 2020 to 21.3 Kboepd compared to 18.1 Kboepd in 2018.
Savannah Energy’s operations in Nigeria have seen it make significant contribution to power supply in the country. Accugas’ customers achieved an all-time record peak contribution of 11.5% of Nigeria’s electricity generation or 486MW on 23 May 2020, with the contributed electricity being exclusively generated from Accugas sales gas.
As announced on 31 January 2020, Accugas entered into the first new gas sales agreement for the business in over five years with First Independent Power Limited (“FIPL”), an affiliate company of the Sahara Group, for the provision of gas to the FIPL Afam power plant (“FIPL Afam”). Accugas is in the process of working with FIPL to validate the third-party infrastructure required to enable the commencement of gas sales under this contract.
Although the company recorded a loss after tax of $96.9m in 2019, a result which includes just over six weeks of revenues and operational costs from the Nigerian Assets, the half year 2020 financial report shows group cash balance of $54m as at 30 June 2020.
Adjusted EBITDA for 2019 stood at US$1.8m as compared to a negative EBITDA of US$13.4m in 2018 and pro-forma adjusted EBITDA for 2019 stood at US$91.6m.
“This is an exciting time for our business. In Nigeria, via Accugas, Savannah currently supplies more than 10% of Nigeria’s power sector. We generated strong cash collections in-country, of US$82.1m in H1 2020 and remain on track to sign further gas sales agreements in 2020. In Niger, we aim to implement an EPS on R3 East for near term first production and cash flow within the next 18 months, subject to market conditions and financing, and consider future drilling in our bank of 146 exploration targets over the course of the coming years,” Knott said.