WTI (Apr) $82.72 +$1.68, Brent (May) $86.89 +$1.55, Diff -$4.17 -13c.

USNG (Apr) $1.70 +4c, UKNG (Apr) 74.2p +4.21p, TTF (Apr) €28.7 +€0.24.

Oil price

Oil has bounced as CERA Week in Houston, the pre-eminent conference in the entire oil and gas calendar sees speakers from all over the industry. And at the moment, from what little I can glean the message is unchanged, the need for fossil fuels has never been stronger and should be respected.

Savannah Energy

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, announces that it has signed separate Share Purchase Agreements with Sinopec International Petroleum Exploration and Production Corporation and Jagal Ventures Limited  to acquire 100% of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited.

Savannah also announces that it has today published an updated Competent Persons Report (“CPR”), compiled by CGG Services (UK) Ltd, covering its assets in Nigeria.

SIPEC Acquisition 

SIPEC’s principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field, located in Akwa Ibom State, Nigeria. An affiliate of Savannah, Universal Energy Resources Limited, is the 51% owner and operator. 

The SIPC SPA will see Savannah Energy SC Limited  acquire a 75% equity interest in SIPEC for cash consideration of US$52 million, payable on completion and subject to customary adjustments for a transaction of this nature from 1 September 2023. The Jagal SPA will see Savannah Energy SC Limited acquire a 25% equity interest in SIPEC for cash consideration of US$7.5 million (without adjustment), payable on completion, plus US$2 million in deferred cash consideration payable in eight equal quarterly instalments post-completion. The transaction consideration is expected to be funded through a new bank debt facility arranged by The Standard Bank of South Africa Limited and the existing cash resources of the Company. Completion under each of the SPAs is subject to the parties’ satisfaction of customary conditions precedent, including certain regulatory approvals, as well as a mechanism ensuring that completion under both SPAs occurs simultaneously.

As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. SIPEC oil production is estimated at an average for 2024 of 1.4 Kbopd. Savannah’s Reserve and Resource base will increase by approximately 46 MMboe following completion of the SIPEC Acquisition.

It is anticipated that, within 12 months following completion of the SIPEC Acquisition, Stubb Creek gross production should increase by approximately 2.7 Kbopd to approximately 4.7 Kbopd through implementation of a de-bottlenecking programme.

The SIPEC Acquisition will secure significant additional feedstock gas available for sale to Savannah’s 80% owned Nigerian gas processing and distribution subsidiary, Accugas Limited. At present, Accugas has eight principal gas customers, including large thermal power stations, such as Calabar Generation Company Limited, as well as key industrial players, such as Lafarge Africa PLC and the Central Horizon Gas Company Limited. With a weighted average remaining contract life of 14 years, Savannah’s natural gas supplies are a critical enabler of the Nigerian economy and currently support approximately 20% of Nigeria’s thermal power generation.

Since Savannah announced its intention to acquire Accugas in late 2017: (i) volumes of gas transported; (ii) the number of significant customers served; and (iii) the Company’s contribution to thermal power generation in Nigeria have each more than doubled.

The following information in relation to the SIPEC Acquisition is included in accordance with the disclosure requirements of Schedule Four to the AIM Rules for Companies:

For the financial year ended 31 December 2022, SIPEC audited accounts show income after tax of US$27.8 million (excluding exceptional income of US$42.3 million) and total assets of US$136.5 million.

Nigeria CPR Summary

The Nigerian CPR has been published by CGG and is available to download on the Company’s website (https://wp-savannah-2020.s3.eu-west-2.amazonaws.com/media/2024/03/Nigeria-Competent-Persons-Report-18-March-2024.pdf). A summary of the gross reserves and contingent resources associated with the Uquo and Stubb Creek fields, in accordance with the 2018 Petroleum Resource Management System, is set out in the table below. For an explanation of the defined and technical terms in this announcement, readers should refer to the updated Nigeria CPR.

Summary of Nigeria Gross Reserves and Contingent Resources as per the Updated Nigeria CPR

Gross 2P Reserves


Gross 2C Resources


Oil & Condensate (MMstb)



Stubb Creek




Gas (Bscf)




Stubb Creek


Total (MMboe)



All Reserves presented above are as at 1 January 2024.

Andrew Knott, CEO, Savannah Energy, said:

“Savannah remains committed to growing our core business in Nigeria through a combination of both value accretive acquisitions and organic projects. This is reflected in this morning’s announcement of the SIPEC Acquisition. The base case acquisition has been priced in line with our expected returns criteria, with the identified upside cases (the oil de-bottlenecking and new gas sales to Accugas projects) hoped to add significant value to the Stubb Creek field over time.

I would like to take the opportunity to thank the members of our team who have worked diligently on this transaction to make it happen. Thank you all.”

This acquisition is very smart indeed, getting 100% of the rest of Sinopec Nigeria comes with a number of bonuses. Savannah buys a 75% interest in SIPEC from Sinopec and 25% from Jagal for a 49% interest in the Stubb Creek field which makes a good fit with the other 51% owned by UER, a Savannah affiliate and operator. 

They will pay $52m and $7.5m respectively and the transaction should complete on the 1st September. As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. Also SIPEC oil production is estimated at an average for 2024 of 1.4 Kbopd. Savannah’s Reserve and Resource base will increase by approximately 46 MMboe following completion of the SIPEC Acquisition.

There’s more, it is anticipated that, within 12 months following completion of the SIPEC Acquisition, Stubb Creek gross production should increase by approximately 2.7 Kbopd to approximately 4.7 Kbopd through implementation of a de-bottlenecking programme.

Another added financial advantage comes through the significant additional feedstock gas available for sale to Accugas, 80% owned by Savannah and who sell to eight principal gas customers across Nigeria where they have a weighted average contract life of 14 years. Savannah supply some 20% of Nigeria’s thermal power generation. 

My conclusion is that for $61.5m the deal adds material 2P reserves and 2P resources made more valuable by their application by providing feedstock and offsetting declines at Uquo. The deal is accretive and at C. $7.50/ bbl very cheap given the current price deck. 

Diversified Energy Company

Diversified has announced its final audited results for the year ended December 31, 2023. Additionally, the Company is pleased to announce that it has entered into a conditional agreement with Oaktree Capital Management, L.P.  for the strategic acquisition of working interests in certain assets operated in the Central Region.  Further, the Company also announces a revised capital allocation framework designed to strengthen the balance sheet and provide sustainable shareholder returns.

FY 2023 Final Results: Operating and Financial Highlights

•     Record average net daily production: 821 MMcfepd (137 MBoepd)

◦     December exit rate of 775 MMcfepd(a) (129.2 MBoepd)

◦     Peer-leading consolidated corporate production decline rate of ~10%(b)

•      Year end 2023 reserves of 3.8 Tcfe (642 MMBoe; PV10 of $3.2 billion(c))

•     Net income of $760 million, inclusive of $688 million tax-effected, non-cash unsettled derivative fair value adjustments

•     Adjusted EBITDA of $543 million(d) generating Free Cash Flow of $219 million(e)

•     Adjusted EBITDA Margin of 52%(f)

•     Total Revenue, inclusive of hedges, grew 2% to $1 billion(g), net of $178 million in commodity cash hedge receipts that supplemented Total Revenue of $868 million

•     Year-end liquidity of $139 million(h) and Leverage (Net Debt-to-Adjusted EBITDA) of 2.3x(i)

•     Commenced trading on the New York Stock Exchange

•     Recommending a final quarterly dividend of $0.29 per share

2023 Sustainability Highlights

•     Achieved 2030 Scope 1 methane intensity goal (-50% from 2020) seven years ahead of schedule

◦     33% reduction in Scope 1 methane intensity to 0.8 MT CO2e/MMcfe from 1.2 in 2022

◦     NGSI(j) Methane Emissions Intensity 0.11% CO2e/MMcfe vs. 0.21% in 2022

•     Won ESG Report of the Year from ESG Awards 2023

•     Awarded OGMP 2.0’s Gold Standard for emissions reporting for the second consecutive year

•     Increased MSCI sustainability rating to AA leadership status

•     The Company anticipates issuing its 2023 Sustainability Report in April 2024 

Highly Synergistic and Accretive Acquisition of Oaktree Interest

Key Acquisition Highlights

•     Consolidates working interest in existing DEC operated wells in the Central Region by adding ~510 Bcfe of PDP reserves at an attractive value of approximately a PV17 of PDP reserves (PV10 value of $462 million)(k)

•      Estimated gross purchase price of $410 million (approximately $386 million net, including customary purchase price adjustments)

•     Favorable per unit cost benefit resulting from no additional G&A Expense

•     Offsets natural declines with expected 122 MMcfepd in additional production (~80% Natural Gas)

◦     Provides a ~15% increase in overall Company production

•     Provides robust cash flow with 2024 Adjusted EBITDA of $126 million(l)

◦     Represents ~3.1x 2024 Adjusted EBITDA multiple

•     Increases Diversified’s exposure to favorable Gulf Coast pricing and takeaway capacity

•     Creates opportunity to layer additional hedges into a stronger commodity price environment

Acquisition Details

The Acquisition represents a continuation of Diversified’s successful multi-year track record of strategic asset purchases, whereby the Company will acquire Oaktree’s proportionate interest in the previously announced Indigo, Tanos III, East Texas, and Tapstone acquisitions for an estimated gross purchase price of $410 million (approximately $386 million net), which includes the assumption of approximately $120 million in amortizing notes and a hedge book with a positive mark-to-market of approximately $70 million. Diversified’s average working interest in the Assets will increase by approximately 100% as a result of the Transaction, highlighting the Company’s emphasis on efficient operation of high ownership interest assets to maximize cash returns for the life of the acquired assets.

The Assets include wells currently operated by Diversified throughout the Central Region and are expected to add production of 122 MMcfepd (80% natural gas), representing an increase of 15% as compared to Diversified’s previously announced 2023 average daily production. With an advantageous production-to-reserves ratio for the Assets of 11x, the Company’s corporate decline rate remains unchanged at approximately 10% per year.

As part of the Acquisition, Diversified will acquire certain hedging contracts from Oaktree that will provide ongoing protection despite the recent downturn in the gas market at volumes consistent with the Company’s overall hedging strategy while also maintaining strong long-term cash upside potential from the Assets.

Consideration for the Acquisition gross purchase price of $410 million (approximately $386 million net) is subject to customary purchase price adjustments and is expected to be satisfied through existing and expanded liquidity, the assumption of Oaktree’s proportionate debt of approximately $120 million associated with the ABS VI amortizing note, and approximately $90 million in deferred cash payments to Oaktree.(m)  Additional liquidity for the Acquisition may be generated from non-core asset sales and the potential issuance of a private placement preferred instrument. The Company does not plan to issue common equity as part of the Acquisition. The Acquisition  has an effective date of November 1, 2023.

The Path Forward- FOCUS FIVE

In the year ahead, the Company is taking a renewed focus on the principles on which Diversified was founded: investing in strategic, accretive acquisitions, delivering greater operational efficiencies, taking proactive steps to ensure the sustainability of assets, keeping costs low and de-leveraging the balance sheet – all while returning value to shareholders.

Diversified has set in motion its “Focus Five”  in order to demonstrate meaningful expansion of free cash flow generation while growing the company in a disciplined manner. That plan consists of the following core objectives:

•     Optimized cash flow generation

•     Cost structure optimization

•     Financial and operational flexibility

•     Sustainability innovation 

•     Scale through accretive growth

Updated Capital Allocation Framework

Since first initiated in 2017, Diversified has delivered more than $800 million in cash returns to the Company’s stockholders, including approximately $700 million in cash dividends, along with approximately $110 million in share repurchases, and the Board remains committed to maintaining a sustainable and competitive shareholder return policy. 

The Company has undertaken a reassessment of its capital allocation strategy to weigh the intrinsic value of the current share price level against the historical practice of returning capital through dividends. The  Board and executive management team have jointly evaluated a number of potential scenarios to align the dividend level with expected future capital allocation needs, peer trends, current commodity prices, and current equity market dynamics.

The result of this assessment is the Board’s realignment of capital allocation and is designed to best position the Company to create long-term shareholder value through the balanced combination of:

•     Systematic debt reduction

•     Fixed per-share dividend

•     Strategic share repurchases

•     Accretive strategic acquisitions

In conjunction with the asset acquisition and following the Company’s capital allocation policy review, the Board has set the new quarterly dividend to $0.29 per share which equates to $1.16 per year. This fixed quarterly dividend payment will be sustainable for at least three years and maintains a top quartile pro forma yield1, among FTSE350 and higher than a majority of US listed peers, while providing the Company financial flexibility to reallocate approximately $110 million annually of capital towards the other elements within the updated capital allocation framework. When combined with our planned debt reduction through amortization of approximately $200 million in 2024, the capital allocation framework will allow for an opportunity to meaningfully reduce leverage and remain within the Company’s stated target leverage range of 2.0x to 2.5x. In addition, the Company will have increased flexibility to conduct a strategic and regimented share repurchase program, while also providing for the opportunity to make accretive acquisitions. The updated capital allocation framework will take effect with the recommended final dividend for 2023, payable in June 2024.

1 Estimated pro forma dividend yield relative to FTSE 350 constituents and US listed peers as of  February 12, 2024. 

CEO Rusty Hutson, Jr. commented:

“We finished the year with strong financial, operational, and sustainability results, which reflect the continued execution and success of our business strategy and the contributions of our teams. Despite headwinds in the natural gas market, Diversified grew annual adjusted EBITDA by approximately 8%, increased margins by approximately 6%, and generated $219 million in free cash flow. From a capital allocation perspective, we reduced our outstanding debt by approximately 15% since our interim results while returning $180 million in capital to shareholders in 2023 through dividends and strategic share repurchases. The highly accretive transaction announced today increases our Central Region opportunities and reinforces our commitment to a highly disciplined growth strategy.

“The gas market is sending a clear signal today; there is too much supply in the marketplace. Producers have already started to respond with reduced activity levels and production guidance. We believe Diversified is one of the best-positioned operators to take advantage of this lower commodity price marketplace. We are highly hedged in 2024, and our production base has one of the lowest decline profiles in the gas industry.

As we navigate the path forward in this commodity price environment, we are going on offense to be more opportunistic in our strategic approach with a strengthened balance sheet and to capitalize on any periods of near-term weakness. These times have historically provided extreme valuation disconnects where disciplined businesses have been afforded the ability to meaningfully grow production. We have initiated our Focus Five objectives, which I believe will help to further differentiate the Company from its peers in unlocking corporate value throughout 2024 and into the future.  

“Upon rigorous assessment, we are recalibrating our fixed dividend payout to align with current equity market dynamics, peer trends, prevailing commodity prices, and expected future capital allocations. We understand the importance of this decision to our shareholders and do not take the decision lightly. By focusing our capital allocation on a fixed dividend level that is competitive with the industry and the market at large, we are prioritizing the acceleration of our balance sheet de-leveraging, with over $200 million in debt repayments during 2024, creating financial flexibility and a strong foundation to maximize long-term value creation for our shareholder base.

“Diversified’s differentiated stewardship business model will thrive amid the backdrop of rising global energy demand, consolidation in the U.S. energy markets, and enhanced expectations for sustainably produced energy. Thanks to our approach – focused on acquiring, improving, and retiring existing, long-life U.S. energy assets, honed through two decades of field experience – Diversified is the Right Company at the Right Time to responsibly manage gas and oil production in a manner that’s consistent with environmental stewardship and our focus on being a solutions-based business.”

So, I see this announcement as full of promise, it is cornerstoned by a first class set of results, includes a transformational acquisition with funding options, recalibrates the dividend which the market had pushed to unacceptable levels and with the option of seeing more shareholders from the USA as the Russell 2000 creates significant new investors.

As for the results I see record production numbers, EBITDA up 8% an excellent performance despite unfavourable natural gas prices in which margins were kept at over 50%, over 6% up and a high free cash flow whilst also reducing debt. 

The acquisition from Oaktree consolidates the company’s interests whilst neatly replacing the decline in production, adds to liquidity and will be funded either from existing resources, asset sales and the company has alluded to a potential private placement of an instrument to an individual private investor. 

Coming to the recalibration of the final dividend which is ‘in line with market dynamics’ but more importantly it deleverages the balance sheet, pays down debt and enables buy-backs whilst creating value. On the call Rusty Hutson said that the 30% yield was a millstone around the neck, especially when trying to fix meetings with stateside investors who worry about such things. 

The buy-back is likely to be a regimented, long term programme rather than one-off event which should help the treasury and see inbound investment. This brings me to US investors and DEC, there is little doubt that since they have had the chance there has been buying interest from investors and whilst numbers are not in yet the number is noticeable. 

With the regular June rebases, the Russell 2000 opens and shuts, it is clear that DEC has easily met the criteria for inclusion for entry this summer which encourages a number of potential investors to buy the shares. It may be retail investors direct or via tracker funds or ETF’s that will also trade the index itself and need to include all stocks therein. 

There are so many interesting features of the RNS and I have tried to point out the key parts of why DEC is still an excellent investment. Even after this recalibrating, the yield should be very worth having, I think that it will be around 11% for at least three years and that is based on an unchanged dividend, outwith buy-backs there might be more.

DEC management are best in market grade, are building production, making accreting asset purchases and even sales if the prices are deemed to be attractive. And even in the call Rusty did say that with the ‘mostly public mergers’ going on at the moment that leads to spin-offs of assets and ‘good assets too’ which may lead to opportunities. 

Not afraid to restructure but the fundamentals remain, strong production, industry beating margins and dominant free cash flows. This company is still going places and these results prove that in every way.


Consolidates working interest in existing DEC operated wells in the Central Region by adding ~510 Bcfe of PDP reserves at an attractive value of approximately a PV17 of PDP reserves (PV10 value of $462 million)(k)

•      Estimated gross purchase price of $410 million (approximately $386 million net, including customary purchase price adjustments)

•     Favorable per unit cost benefit resulting from no additional G&A Expense

•     Offsets natural declines with expected 122 MMcfepd in additional production (~80% Natural Gas)

◦     Provides a ~15% increase in overall Company production

•     Provides robust cash flow with 2024 Adjusted EBITDA of $126 million(l)

◦     Represents ~3.1x 2024 Adjusted EBITDA multiple

•     Increases Diversified’s exposure to favorable Gulf Coast pricing and takeaway capacity

Angus Energy

It is my pleasure to present you with the Annual Report of Angus Energy plc  with its subsidiary undertakings for the year ended 30 September 2023.

The Company has enjoyed a full year of steady gas production. Operationally the team have been extremely busy with the successful completion and commissioning of the B7 well along with the installation of the permanent flowline.

Another milestone was achieved post year-end with the successful closing of the £20m senior secured loan facility provided by Trafigura PTE Ltd, with the funds used to restructure the Company’s existing debt and provide funds for future development projects. To that end we will no doubt have another busy year ahead. The team have completed a structural re mapping of the Saltfleetby subsurface which will enable the development of a detailed geological model to identify new drilling targets. Geologically the Saltfleetby gas field also has great gas storage potential.

Energy security is high on the Governments agenda, and we will continue to work with all stakeholders to assess the viability of storage opportunities either now or at the end of field life. The Company will focus on resuming production from its oil assets.

Financial and Statutory Information

Revenue from oil and gas production during the year is £28.208m (2022: £3.142m) on production of a gross 31,750 bbls of oil and 25,228,853 Therms of natural gas (2022: 1,378 bbls of oil and 1,273,994 therms of natural gas). This was the result of production from the Saltfleetby Gas Field.

The Group recorded a profit of £117.810m, which included a derivative profit of £136.966m in relation to the derivative instrument and an impairment of £3.717m. EBITDA for the period was £17.002m (2022: loss of £0.869m). The Group recorded an Operating profit of £4.794m and adjusted for the derivative financial instrument profit, realized derivative costs and finance costs during the period, resulted in an adjusted operating loss of £19.156m (2022: loss of £1.638m). The derivative profit is based on future production and calculated using forward gas prices as at 30 September 2023. The derivative will be realised to a profit or loss when the payments under the derivative instruments become due (see note 25).

The Company has continued to make a conscious effort to cut costs at both corporate and operational levels while still maintaining a high level of professionalism and operatorship. In line with starting gas production the administrative costs have increased by £0.287m to £2.906m (2022: £2.619m).


With gas production at Saltfleetby increasing the Company looks forward to positive cashflows for the year ahead. 

The Board will focus on maximising the potential from our existing portfolio, including its storage potential and accelerate its evaluation of new projects to complement production from Saltfleetby.   

Patrick Clanwilliam


18 March 2024

This has been a good, long awaited performance by Angus with profits of £117.810m net, long awaited as this is the debut full year from Saltfleetby. With 2P reserves of a short 5m barrels and net debt of  £14.7m the actual numbers change with the complicated derivatives used during the year.  

The new executive management have done a great job and the extensive numbers in the annual report are a tribute to their application last year. I look forward to watching the shares this year as they channel the value of Saltfleetby.