SAVP.L Share News (SAVP)

LONDON (Alliance News) - Savannah Petroleum PLC on Thursday said its pretax loss narrowed in 2015 after costs relating to its initial public offering did not repeat in 2015, as it said it expects operations to recommence at its Agadem Rift Basin asset base later this year.

The Niger-focused oil and gas company, which does not generate any revenue, reported a USD7.3 million pretax loss in 2015, narrower than the USD14.7 million loss posted a year earlier. The company floated on AIM in August 2014.

Operating expenses grew slightly to USD7.0 million, from USD6.8 million in 2014, although finance costs fell to USD250,000 from the USD7.9 million a year earlier. The 2014 finance costs had been mainly comprised of non-recurring IPO costs which did not repeat.

Savannah Petroleum said it successfully completed its first ground operation in Niger during the year, from which it acquired 36,949 kilometeres of full tensor gradiometry data, both on time and on budget. Its focus remained on its Agadem Rift Basin assets, which are located in South East Niger, during the year, and said an independent assessment increased R1/R2 best estimate gross risked prospective oil resources from 573 million barrels to 1,191 million barrels.

Savannah Petroleum added that its core focus is expected to remain on the Agadem Rift Basin assets throughout 2016, adding that it expects to be in a position to report on both its resource base and its "view of the emerging play types in the Agadem Rift Basin" around mid-year.

Operational activity is expected to recommence in the second half, the company added.

"There is an abundance of robust and high quality assets available for acquisition, often at prices substantially lower than our view of their intrinsic value. We are therefore considering new venture opportunities, but will only do so to the extent they do not compromise the value creation potential of our Agadem Rift Basin asset base," said Chief Executive Andrew Knott.

Shares in Savannah Petroleum have been suspended since January, when the company entered into a non-binding heads of terms agreement regarding a potential reverse takeover. No further information was given.

Savannah Petroleum said further updates relating to this transaction will be provided over the course of the next month.

By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland

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