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Refinancing continued

Over the past 18 months, the Naira has plunged versus the dollar, devaluing by over 375%. Whilst this may have negated some of the benefits expected from the refinancing, it will allow Savannah to match the currency of the borrowing structure with the currency in which revenues are received in Nigeria. Prior to this, Savannah was forced to hold its Naira revenue receipts in local currency as, due to the lack of FX liquidity, Savannah was unable to access US dollars to service the Accugas US$ facility. It also means that if the Naira:US$ exchange rate continues to decline, the US$ value of this Naira debt on Savannah’s balance sheet will reduce. At the same time, because the Company’s gas contracts are denominated in US$, it means Savannah’s Naira revenues remain locked to the US$, so if there is a decline in the NGN:US$ FX rate, the amount of Naira revenue that the Company receives will increase, whilst the Naira debt remains flat.

Continued

Refinancing

Management continues to progress the refinancing of its US$371m Accugas Term Debt Facility, which currently has a maturity date of 31 December 2025, into a multi-tranche Naira facility. In January 2024, Accugas signed an agreement with a consortium of five Nigerian banks to provide a new NGN340bn (US$210m) transitional term facility. This was progressively drawn down in 2024 to repay some of the existing Accugas US$ facility. This is the first step towards Savannah’s refinancing plan, which will align the currencies of its existing principal revenue streams with its debt service obligations and will significantly reduce its foreign exchange exposure. As at 31 December 2024 NGN332bn had been drawn down (leaving a balance of US$212.3m under the US$ Accugas facility) and the NGN340bn facility is now likely to have been fully drawn. We expect Savannah will seek to expand the facility to enable the full repayment of the USD-denominated Accugas facility in 1H25. Savannah continues to advance plans for a potential long-dated domestic bond issuance to ultimately replace the transitional term facility. It is intended that the average tenor of the debt will be extended beyond 2030, which is more aligned with the cash flow from its long-term gas sales contracts and, with the cash sweep structure removed, the available free cash flow from the Accugas business will increase.

Continued

Nigerian value creation

Savannah has a strong and proven track record of delivering value in Nigeria following its acquisition of Seven Energy in 2017. Since the announcement of the Company’s decision to acquire its Nigerian business in 2017, Savannah has more than doubled its number of customers. Savannah is now contracted to supply gas to enable c20% of Nigeria’s thermal power generation capacity (up from 10% at the time of the acquisition). Since 2017, total revenues have increased from US$140m to US$259m in FY24, a 9% CAGR, while cash collections have increased 129% since 2017 to US$248.4m in FY24. Adjusted EBITDA has increased at an average CAGR of 12% from US$80m in 2017 to US$180m in FY24, with the Company’s Adjusted EBITDA margin increasing to 70%. Operating plus administrative costs have reduced 41% since 2017 to US$8.9/boe (2017: US$15.1/boe). Over the same period, 2P reserves have increased 38% to 80.2mmboe (2017: 57.9mmboe).

Continued

Nigeria performing well

As demonstrated in the Company’s recent trading update, Savannah’s core business in Nigeria continues to perform well operationally. FY24 production of 23.1kboepd (88% gas), was broadly in line with FY23 (23.6kboepd). During 2024 YTD, three gas contracts have been agreed and extended for a total of up to 105MMscf/d. Total income was c36% higher compared with FY23 at US$393.6m (FY23: US$289.8m). The substantial increase is due principally to other operating income of US$134.9m (2023: US$28.9m), which relates to the re-billing of foreign exchange losses incurred by Accugas as it converted historic Naira cash received into US dollars. Total revenue during the period was broadly flat YoY at US$258.7m (FY23: US$260.9m) but came in ahead of guidance at “more than $245m”. Savannah continues to benefit from over US$3.4bn of contracted future gas revenues in Accugas, with price escalation clauses tied to US consumer price inflation.

Cash collections for FY24 were a record US$248.5m (FY23 US$206m). As at 31 December 2024, cash balances stood at US$32.6m (YE23: US$107.0m), with the reduction due principally to the devaluation on Naira-denominated cash. Net debt at 31 December 2024 was US$634.0m, an increase of c34% from YE23 (US$473.7m). While gross debt has increased 15% YoY at US$666m (31 December 2023: US$581m), the payment of interest (30 June 2024: US$101m) plus other liabilities has reduced cash, resulting in a higher net debt figure. Also contributing to Savannah’s higher net debt figure is the devaluation of Naira-denominated cash balances as discussed above. It is worth noting that of the debt facility entered into with Exxon Mobil to finance the acquisition of the Chad and Cameroon assets, of which US$134.6m is outstanding, only up to a maximum of US$36m is recourse to the Company. In aggregate, only 6% of gross debt at YE24 (US$666m) was recourse to Savannah Energy PLC.

Continued

Valuation update

Savannah has appointed McDaniel & Associates to prepare updated competent persons reports for the oil and gas assets of the Group. These are expected to be published alongside the 2024 annual results in early June 2025. In the meantime, the Company has updated its internal management estimates of the potential PV10 value at an asset level basis for its Nigeria and Niger assets. In aggregate, management value the assets at US$1,526m or £0.69/share (on a fully diluted basis).

Continued

Financing to lay foundations for growth

Savannah has successfully raised £30.6m via a subscription and has agreed terms for a new US$200m hydrocarbon asset acquisition facility with Blacksea – both of which are expected to lay a strong foundation for the delivery of the Company’s 2025-2030 organic and inorganic growth plans. The £30.6m fundraising will enable the potential acceleration of key business development opportunities under consideration, allow the Company to repay and/or acquire up to US$21m of subsidiary company debt and for general corporate purposes. Certain of the Company’s Directors have acquired in aggregate c130m shares and will hold in aggregate 10.85% of the Company’s enlarged issued share capital. Savannah Energy Oil & Gas, a subsidiary of Savannah, established to acquire interests in upstream oil and gas assets, has agreed a US$200m debt facility with energy focused investment company Blacksea. The facility is available to Savannah to support potential future acquisitions of oil and gas assets and has a tenor of up to five years, with quarterly repayments commencing in February 2028. The loan bears interest at SOFR +7%. Blacksea was established as an investment and trading vehicle of Vitol Bahrain and Maddox DMCC in 2014. Blacksea was bought out by Maddox DMCC in 2019 and was then subject to a management buy-out in 2024. Today, Blacksea is a well-capitalised investment company seeking to provide long-term capital to high growth companies in the upstream oil and gas sector with whom long-term commodities trading relationships can be developed.

Continued

South Sudan update and restoration to trading

Savannah has now terminated existing discussions relating to the potential acquisition of the ex-PETRONAS assets in South Sudan, following which trading in the Company’s shares has been restored. Savannah may pursue an alternative transaction regarding the ex-PETRONAS assets, which would not constitute a reverse takeover under the AIM Rules, and the Company has held preliminary discussions with potential counterparties relating to this.

Continued

—Upcoming catalysts: In Nigeria, the SIPEC acquisition is expected to complete in 1Q25, paving the way for the commencement of an expansion programme, which is expected to increase production to 4.7kboepd within 18 months of completion of the acquisition. At Uquo, the gas compression project at the Uquo CPF is currently being commissioned, enabling Savannah, through its Accugas midstream subsidiary, to maintain gas production volumes in the years ahead. Further, the procurement process for the long-lead items required for a potential two-well drilling campaign at the Uquo Field in 2H25 is progressing. The potential two well programme includes a gas development well at Uquo NE that is expected to add up to 80MMscf/d of incremental production capacity and a potential additional exploration well at Uquo South, targeting an unrisked gross GIIP of 154Bcf of prospective resources. We expect Savannah will complete the refinancing of US dollar denominated US$212.3m (YE24) Accugas debt to Naira in 2025, aligning the Accugas debt facility with the currency in which gas revenues are received, thereby insulating Accugas from FX risk. Savannah’s receivables position at YE24 was US$539m, primarily consisting of amounts due from gas customers in Nigeria. We would expect delivering a further increase in the rate of cash collections in Nigeria to be a key focus area for the business in 2025 and beyond. The arbitral proceedings against the Government of the Republic of Chad continue to advance and are expected to be concluded no later than 1H/26. In aggregate, the claims are valued in excess of US$1bn. In Niger, Savannah continues to progress its flow-testing programme on the key R3 area fields. The Niger-Benin export pipeline is now fully operational, providing a clear route for crude to international markets. Significant additional longer-term growth potential exists in Niger through the 146 exploration targets identified within Savannah’s licence. The Power Division continues to make progress with up to 696MW of renewable energy projects in motion and the expected announcement of Savannah’s entry into additional power projects, including thermal power projects, putting the Company on target to meet its 2GW+ goal by the end of 2026. —Updated forecasts: We have published FY24E forecasts in line with Savannah’s recent trading update and we are also publishing FY25E forecasts. We forecast FY25E average gross daily production of 26.0kboepd (a 12% YoY increase). We estimate FY25YE cash and net debt at US$129m and US$651m, respectively. We reinstate our target price at 51.5p (on a fully diluted basis), a 96% premium to the suspension price.

Continued

Cavendish note as requested by Tier (sorry but cannot share note online as it has my email address all over it),

Value drivers across the portfolio

Savannah has successfully raised £30.6m and has agreed terms for a new US$200m hydrocarbon asset acquisition facility which combined are expected to lay the foundations for the delivery of Savannah’s 2025-2030 organic and inorganic growth plans. Savannah’s core business continues to perform strongly, with the Company benefitting from over US$3.4bn of contracted future gas revenues, at a weighted average contract life of 13 years and a 25-year reserve and resource life. We reinstate our target price following the Company’s resumption to trading on AIM at 51.5p (on a fully diluted basis), a 96% premium to the suspension price.

Continued

Chad/Cameroon arbitration is currently expected that these proceedings to be concluded no later than the first half of 2026.

As copied and pasted below:

"As previously disclosed in Savannah's 2023 Annual Report, our wholly owned subsidiary, Savannah Chad Inc ("SCI"), commenced arbitral proceedings in 2023 against the Government of the Republic of Chad and its instrumentalities in response to the March 2023 nationalisation of SCI's rights in the Doba fields in Chad, and other breaches of SCI's rights. Another wholly owned subsidiary, Savannah Midstream Investment Limited ("SMIL"), commenced arbitral proceedings in 2023 in relation to the nationalisation of its investment in Tchad Oil Transportation Company, the Chadian company which owns and operates the section of the Chad-Cameroon pipeline located in Chad. SMIL has also commenced arbitral and other legal proceedings for breaches of SMIL's rights in relation to Cameroon Oil Transportation Company ("COTCo"), the Cameroon company which owns and operates the section of the Chad-Cameroon pipeline located in Cameroon. We currently expect these arbitral proceedings to be concluded no later than the first half of 2026.

SCI and SMIL are claiming in excess of US$775 million (plus interest which is currently estimated at in excess of US$140million and costs) for the nationalisation of their rights and assets in Chad14. SMIL has a claim valued at approximately US$380 million (plus interest which is currently estimated at in excess of US$40 million and costs) for breaches of its rights in relation to COTCo15. Whilst the Government of the Republic of Chad has acknowledged SCI's and SMIL's right to compensation, no compensation has been paid or announced by the Government of the Republic of Chad to date. Savannah remains ready and willing to discuss with the Government of the Republic of Chad an amicable solution to the disputes. However, in the absence of such discussions, the Group intends to vigorously pursue its rights in the arbitrations."

Investor Presentation Webcast

An investor presentation webcast will be held at 2:00 p.m. (GMT) on Tuesday 4 March 2025, where CEO Andrew Knott will be presenting, as well as hosting a Q&A session. If you are a shareholder or professional investor and wish to register for the webcast and/or submit questions, please click this link and complete the registration form hxxps://www.savannah-energy.com/investor-presentation-webcast/. Registration must be completed and questions submitted by 11.30 a.m. on Tuesday 4 March 2025. Once registered, a link will be sent to you via email shortly before the scheduled start time of the webcast.

Https://www.savannah-energy.com/investor-presentation-webcast/

Jungmana, couldn't agree more with your comments.

Remember Advance Energy very well with a supposed infill drill at 90% cos , turned out to be a duster.

Anyways good luck to all here, hope it comes good...

This year's interim results date is early, when compared to last year's interim results, with hopefully something to talk about.

Interim results for the six months ended 31 December 2024 on Tuesday, 11 March 2025.

...

Last year's (2004) interim results:

interim results for the six months ended 31 December 2023 on 28 March 2024.

Tintin,

As posted by Darrel on another forum,

"It’s just stating if any shares were issued through the share option scheme,only a very small amount of shares so probably just options that have been issued to staff"

Thank you BRV for putting in your time and effort in transcribing the presentation, very much appreciated 👍

Looking back at any relevant information in regards to the upcoming MOU-5 drill into the Jurassic carbonate section and found the following (post release of the Guercif ITR):

Phase 1 rigless testing update RNS 20.02.24.

"The ongoing geochemical characterisation by APT of the interpreted Jurassic section penetrated in MOU-4 is encouraging as preliminary thermal maturity studies indicate the section is mature for thermogenic gas generation and with some potential for condensate too".

https://www.lse.co.uk/rns/PRD/phase-1-rigless-testing-update-z1sbyy740kkwoad.html

Tonight's presentation now on YouTube:

https://youtu.be/W9bpAhjwyu4?si=HLAEAPen0GjGqIsf

That was quite a factual and no stone unturned presentation, I found it very informative and reassuring as an actual investor.

Donalb,

Slight correction if I may,

It's page 14 and near top right of graphic.