WTI $103.79 +$1.60, Brent $108.33 +$1.53, Diff -$4.54 +49c, NG $6.96 +2c, UKNG 200.0p +21.5p
Oil rallied again yesterday as the EU said that it might actually be thinking about and embargo on Russian oil. Interestingly there was a modest warning for the US that suggested rather ironically that a total block might raise oil prices and therefore US gasoline prices. Talk about never being on the winning side…
Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa, is pleased to announce that Accugas Limited, the Company’s 80% indirectly owned subsidiary, has signed an addendum to its existing interruptible gas sales agreement (“IGSA”) with First Independent Power Limited (“FIPL”), originally signed on 28 January 2020.
Accugas currently supplies up to 35 MMscfpd of gas to FIPL’s Afam power plant. Under the terms of the addendum, FIPL will be able to increase the quantity of gas purchased from Accugas to up to 65 MMscfpd so as to also supply the Trans Amadi and Eleme power plants, in addition to its Afam power plant. FIPL’s power plants have a total generation capacity of 391 MW, with the Trans Amadi and Eleme plants having generation capacities of 136MW and 75 MW, respectively. All three plants are located in Rivers State.
FIPL is an affiliate company of the Sahara Group, a leading international energy and infrastructure conglomerate with operations in over 42 countries across Africa, the Middle East, Europe and Asia.
Andrew Knott, CEO of Savannah Energy, said:
“Accugas has recorded growth in Total Revenues1 from gas sales for each of the last five years, with a realised CAGR of 15%. New contracts, such as this morning’s announcement provide the basis for us to continue this growth into the future and we look forward to continue working with the Sahara Group on this and potentially other projects in the future.”
Kola Adesina, Group Managing Director, Sahara Power Group, said:
“At Sahara, we believe that with Savannah we have a partnership that works, and we are delighted to see that our beliefs are becoming a reality. Through this Addendum, we aim to secure the reliable supply of gas to FIPL power plants, thereby improving the health of the Nigerian Electricity Supply Industry and as always, bringing energy to life for the everyday person whose interest we serve intentionally.”
Savannah continue to deliver the goods with an almost doubling of their gas supply agreement with FIPL, extending their coverage to a total of three of FIPL’s power stations in Nigeria. This is undoubtedly testament to the reliability of Accugas’ supply of non-associated gas, since the commencement of its gas deliveries to FIPL’s Afam power station at the beginning of November last year.
With the addressable market in country substantial and with a first class relationship with Sahara Power Group, the largest privately owned vertically integrated power company in Sub-Saharan Africa and part of the larger Sahara Group conglomerate, Savannah remains well placed to take advantage of the infrastructure in Nigerian power markets with its reliable gas sales.
1 Total Revenues are defined as the total amount of invoiced sales during the period. This number is seen by management as more accurately reflecting the underlying cash generation capacity of the business as opposed to Revenue recognised in the Consolidated Statement of Comprehensive Income. A detailed explanation of the impact of IFRS 15 revenue recognition rules on our Consolidated Statement of Comprehensive Income is provided in the Financial Review section on page 56 of our 2020 Annual Report.
I attended the IOG presentation to private investors on Wednesday evening and it was most impressive. Having got to first production at Phase 1 in such a timeframe, especially given the bumps in the road is laudable. With its first cheque in the bank IOG can now move forward with its portfolio of assets in the Southern North Sea and it has many plans including short term wells to be drilled.
The company talked about hedging where the plan is only to do what is strictly needed and to pay down debt so that one day in the future a dividend or buy-back can be considered. With that exciting portfolio to get stuck into, the outlook for IOG looks good especially if you take into account that it is now a key supplier of low carbon domestic gas in a market which will be a huge net buyer for years to come.
It is a big weekend of sport out there fans.
The last day of the jumps season at Sandown where all the prizes will be dished out.
In the rugby Prem the top teams are playing each other, the Tigers are at the Stoop and Sarries host the Chiefs on Sunday.
The F1 season continues with the Emilia Romagna GP at Imola in Italy. It’s one of three sprint weekends but right now its raining out there.
Boxing sees Tyson Fury taking on Dillian White at Wembley Stadium in London with Fury the hot favourite.
And in the footie its a weekend of derbies and historic clashes starting with the Gooners hosting the Red Devils, the Noisy Neighbours entertain the Hornets at the Emptihad whilst another derby sees Spurs going to the Bees.
On Sunday there are three derbies, the so-called South Coast Riviera battle between the Seagulls and the Saints, in London the Hammers visit Stamford Bridge and on Merseyside the Toffees are at fortress Anfield.