LONDON (Alliance News) - Savannah Petroleum PLC on Wednesday said its pretax loss was substantially narrower in the first half of 2015 and said exploration work in Niger could begin within months if it can secure a partner.
The oil and gas company reported a USD3.0 million pretax loss in the first six months of 2015, significantly narrower than the USD14.7 million loss a year earlier. The cause of the narrower loss was a large reduction in finance costs to USD479,000 from USD7.9 million and operating costs to USD2.5 million from USD6.8 million.
Savannah's principal asset is the R1/R2 production sharing contract in Niger where it has drill-ready exploration targets and 37 exploration leads. A preliminary engineering study and economic models have been drawn up which show the project has a breakeven oil price of around USD43 per barrel.
Brent oil was trading at just over USD48 per barrel on Wednesday.
Savannah is now planning on conducting a seismic acquisition and tendering work for the R1/R2 and R3/R4 licence areas, which is expected to be completed in the fourth quarter of 2015. Well engineering work on its exploration prospects also is expected to be completed in the fourth quarter.
Savannah is anticipating receiving the environmental permits for the licence areas before the end of 2015, and said exploration activity will begin "in the coming months" subject to it finding a partner.
Savannah shares were down 1.2% to 31.25 pence per share on Wednesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
