Savannah has announced that the Zomo-1 exploration well in the R3 portion of the R3/R4 PSC area in the Agadem Rift Basin in SE Niger is its 5th consecutive oil discovery. The well encountered 5.4m of net oil bearing reservoir sandstones in the E1 reservoir unit within the primary Eocene Sokor Alternances objective. Additional pay is thought to exist but will require further technical evaluation to confirm, either way this is a perfectly good stand alone discovery.
Yet again the well reached TD (20 days) and completion (28 days) in good time, beating expectations of 22 and 30-35 days respectively. This well concludes the 2018 drilling programme and the Amdigh-1 well test will occur in December 2018 as expected.
The company has commissioned PSDM processing of the R3 East 3D seismic dataset to give enhanced definition of the oil pay zones at the crests of each of the discoveries and significantly assist in “field scale” evaluations and associated development well planning. This includes enhancing the 3D imaging of the A’s yet undrilled deeper Cretaceous aged Yogou and Donga exploration targets. To add to this the company has recently received an additional 400km of 2D seismic data on the R3 Central area and expects to conclude this process shortly.
With this 5th consecutive discovery enabling the company to proceed towards the EPS scheduled for 2019 and the associated revenue stream that it will bring there are clearly exciting times ahead for Savannah. The large multi-well drilling programme will be exciting for shareholders as so far the company has only touched the tip of its potential, CEO Andrew Knott states that ‘the discoveries have served to demonstrate the world class potential of our wider PSC areas where we have identified 120 potential drilling targets which we expect to high grade for inclusion in future drilling campaigns ‘.
With such potential in Niger, along with the exciting developments in the Seven Energy transaction which is in the process of completing, Savannah is set well for 2019 and beyond. It has a unique combination of production and development in Nigeria including the Accugas stake, whilst in Niger it has exploration and the EPS to bring imminent and rapidly increasing revenue. The shares are significantly undervalued on any timescale, see the blog website for interview with Andrew Knott.