During the six-month review period, Savannah reported an operating profit of $152.3 million, marking a significant increase of 130 percent compared to H1 2023, which recorded $66.2 million.
Adjusted EBITDA, excluding other operating income, experienced a slight decline to $91.6 million from $108.2 million in H1 2023. However, when including other operating income, it demonstrates a substantial year-on-year growth of 47 percent, reaching $201.5 million.
The company’s total income surged by 40 percent to $233.4 million, up from $167.6 million in H1 2023. This total includes revenues of $123.5 million and other operating income of $109.9 million, the latter reflecting the billing of foreign exchange (FX) losses incurred by its Nigerian subsidiary, Accugas Limited, during the conversion of Naira cash 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's average daily production in Nigeria increased by 3 percent to 24.4 Kboepd, with its midstream subsidiary, Accugas Limited, providing gas that supports approximately 20 percent of the nation’s thermal power generation capacity.
Additionally, the company reported advancements in its renewable energy initiatives across Africa.
Savannah Energy has also effectively managed its costs, as evidenced by stable production costs of $1.1/Mscfe, consistent with H1 2023. This stability is attributed to the measures implemented to reduce central costs during the period.
The report outlines the latest developments regarding Savannah’s operations in Nigeria, highlighting the robust and steady performance of its Nigerian business.
Savannah has achieved a 3 percent rise in average gross daily production in Nigeria, reaching 24.4 Kboepd, up from 23.6 Kboepd in FY 2023. During this period, its subsidiary, Accugas, solidified its position as a market leader by negotiating and extending three gas contracts totaling up to 105 MMscfpd.
In January, Accugas renewed its contract with First Independent Power Limited for an additional year, allowing it to continue supplying gas to the FIPL Afam, Eleme, and Trans Amadi power stations at a rate of up to 65 MMscfpd.
In July, Accugas entered into a new 24-month agreement with Ibom Power Company Limited, which operates the Ibom power station, to provide up to 30 MMscfpd of gas, succeeding a previous 10-year contract.
A month later, Accugas extended its contract with Central Horizon Gas Company Limited for another year, ensuring the supply of up to 10 MMscfpd of gas.
Savannah is poised to expand its hydrocarbon assets in Nigeria, having announced in March the signing of Share Purchase Agreements with Sinopec International Petroleum Exploration and Production Corporation and Jagal Ventures Limited to acquire 100 percent of the outstanding shares of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
SIPEC holds a 49 percent non-operated interest in the Stubb Creek oil and gas field in Akwa Ibom State, Nigeria, where Savannah’s affiliate, Universal Energy Resources Limited, is the 51 percent owner and operator.
The company expects that within 12 months of completing the acquisition, gross production at Stubb Creek will rise by approximately 2.7 Kbopd, reaching around 4.7 Kbopd, through the implementation of a de-bottlenecking program.
The company is on track to finalize its $45 million gas compression initiative at the Uquo Gas Central Processing Facility, which will enable Accugas to maintain dependable gas supplies for its customers for many years ahead.
This system features two parallel trains, each with a capacity of 160 MMscfpd, and is engineered to enhance gas export pressure. Additionally, the company is actively developing a proposed expansion program for the Uquo field, which anticipates the drilling of more wells 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 launching its Renewable Energy Division in 2021, Savannah has demonstrated a strong commitment to renewable energy initiatives in Africa, complementing its hydrocarbon operations. According to its H1 2024 report, the company’s renewable energy projects in progress have increased to 696 MW.
Firmly believing in Africa’s shift towards renewable energy, Savannah aims to become one of the continent's leading renewable energy development firms within the next two years. The company is rapidly expanding its portfolio of hydro, wind, and solar projects, with a goal of achieving over 1 GW of renewable energy projects in progress by the end of 2024 and exceeding 2 GW by the end of 2026.
Furthermore, Savannah emphasized in its report its ongoing commitment to the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, reflecting its dedication to advancing significant projects in the country and other regions where it operates across the continent.
The Niger-Benin oil export pipeline is now fully operational and offers a reliable pathway to international markets for crude oil sourced from the R1234 contract area. Savannah reports ongoing advancements in its planned four-well testing program and is currently mobilizing the necessary long lead item equipment into the country.
As highlighted in the half-year report, the company is also making notable progress in Cameroon, with the Bini a Warak Hybrid Hydroelectric and Solar Project on track. This follows the approval of the project's optimization and proposed redesign by the country's Minister of Water and Energy.