Oil price, Savannah, UJO, NTOG, Predator. And finally…

WTI (Apr) $68.37 -$1.39, Brent (May) $71.62 -$1.56, Diff -$3.25 +20c.

USNG (Apr) $4.12 +19c, UKNG (Apr) 107.77p -3.09p, TTF (Apr) €43.545 -€3.205.

Oil price

Crude oil took another hit as Opec confirmed fears that they would increase output in April by 138/- b/d in order to ‘make up’ for loss of Iranian crude as sanctions hit, of course…They clearly, like everyone else don’t  have a clue about what’s going on.

And it’s having a direct effect, Aramco gave guidance in its statement for dividends of $85.4bn for this year after $124.2bn last year, even as a Saudi that’s a big hit.

Oh and tariffs start today, Governor Trudeau is speaking as I write…

Savannah Energy

Following its announcement on 3 March 2025, Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, announces the completion of a fundraising (the “Fundraising”) by way of a subscription of new ordinary shares of £0.001 each (“Ordinary Shares”) to raise approximately £30.6 million, in aggregate, at a price per Ordinary Share of 7 pence. As also previously announced on 3 March 2025, the listing of the suspension and restoration to trading on AIM of the Company’s existing Ordinary Shares has become effective at 7.30 a.m. this morning.

Andrew Knott, CEO of Savannah Energy, said:

“This morning, we are announcing a series of primary and secondary transactions in our shares. These transactions have seen existing institutional shareholders, the Company’s Board and management team, and other new long-term growth orientated investors make significant new investments in our Company. Together with the earlier announced signature of a new US$200m hydrocarbon asset acquisition debt facility, these transactions lay a strong foundation for the delivery of our 2025 – 2030 organic and inorganic growth plans.

I would like to express my gratitude to our existing and new shareholders and lenders for their support and I look forward to updating everyone as we progress the delivery of our focus projects throughout the year.”

So, Savannah returns with a new $200m acquisition facility which should pay down the debt and lay the foundation for inorganic growth. I think that how CEO Andrew Knott has described the focus areas for Savannah’s near term progress most aptly describes where the business is scheduled to go this year.

So, a focus on further increasing the rate of cash collections in Nigeria is to be expected along with completion of the refinancing of the principal . The completion of the ‘SIPEC’ acquisition has been expected imminently and that will be the start of the Stubb Creek expansion project. 

The Chad/Cameroon arbitration process continues with the hearings for each of the two main arbitrations scheduled for later this year at the ICC in Paris and decisions due in Q4 2025 and Q1 2026 for each. Operationally the wells on the Uquo gas field are of significant importance in terms of safety and success, and as the key clients add up safe volumes are paramount this asset has doubled production and is still growing. Add to that the ‘potential advancement’ of the R3 East development in Niger also carries considerable importance. 

The final focus areas are as one might expect, relate to the power sector business model where the company already has c. 700MW of wind, hydro and solar projects in motion and with plans to expand into potential thermal power projects too.

Finally, the last focus area is that they expect to deliver ‘further transformational acquisitions’ which will be backed by the new $200m facility, expect these to happen more quickly than previous ones and ‘hopefully’ won’t lead to long periods of suspension. 

Savannah is in a strong position, gas sales are strong and in a stable pricing regime with built in growth, the step up in oil sales from the SIPEC acquisition and planned expansion programme will add to cash flow which is strong and robust. Each subsidiary has responsibility for its own debt and ‘pays its own way’ keeping the PLC relatively free of debt. All in all having listened to the Webcast I remain confident that the outlook is positive and with a great deal of upside. 

Highlights

·      The Company has completed the Fundraising, via a subscription (in more than one tranche) for 437,112,466 new Ordinary Shares by, inter alia, long-term growth orientated strategic investors and a Director of the Company and other long term growth orientated investors raising, in aggregate, approximately £30.6 million before expenses (the “Subscription”);

·      The Company is aware of a series of secondary trades in the Company’s shares that have happened or are imminently to happen (the “Secondary Sale Process”) (together with the Subscription, the “Transactions”); and

·      As part of the Transactions and the exercise of previously awarded share options, certain of the Company’s Directors have acquired, or are imminently due to acquire, in aggregate, 129,963,910 million Ordinary Shares and will hold, in aggregate, 10.85% of the Company’s enlarged issued share capital.

Investor Presentation 

A new investor presentation will be available on the Company’s website shortly.

Details of the Subscription, including Director participation in it, and the Secondary Sale Process

As noted above, the Company announces the completion of the Fundraising to raise, in aggregate, gross proceeds of approximately £30.6 million (before expenses), with such funds expected to be paid to the Company in accordance with the terms of the respective subscription letters entered into, through a subscription of, in aggregate, 437,112,466 new Ordinary Shares (the “Subscription Shares”) to institutional and other investors, including CEO, Andrew Knott, at a price of 7 pence per share. In aggregate, 298,134,852 Subscription Shares will be issued shortly after this announcement and, in aggregate, 138,977,614 Subscription Shares will be issued in due course and by not later than 4 September 2025.

The following table illustrates the effect of Director participation in the Subscription and the Secondary Sale Process. Additionally, as also noted below, certain Directors have exercised share options previously awarded to them under various share options plans. Sir Stephen O’Brien and David Clarkson have each exercised 142,857 share options over new Ordinary Shares, previously awarded under the 2020 Officers Plan. Andrew Knott and Nick Beattie have exercised 2,200,000 and 187,500 share options respectively over existing Ordinary Shares held in the Employee Benefit Trust (“EBT”), previously awarded under the 2020 Officers Plan. Additionally, Nick Beattie has exercised 2,322,678 share options over existing Ordinary Shares held in the EBT, previously awarded under the Employee Plan 2021.

Note: The above table assumes no other changes in the Company’s share capital or holdings of Directors between now and the point of the completion of the Subscription.

* Comprises options exercised over new Ordinary Shares and existing Ordinary Shares held in the EBT, as detailed above.

** Subscription Shares to be acquired by Andrew Knott by not later than 4 September 2025.

*** Includes the issue of 25,598,929 Subscription Shares to Andrew Knott and 113,378,685 Subscription Shares to the New Investor (as defined below) by not later than 4 September 2025.

**** Reported mistakenly as a marginally higher figure in the Company’s 2023 Annual Report, now been corrected.

The FCA notifications, made in accordance with the requirements of MAR, are appended below.

Pursuant to the terms of the Subscription, one of the new subscribing shareholders (the “New Investor”) has committed to subscribe for 113,378,685 Subscription Shares at the Subscription Price by not later than 4 September 2025. Andrew Knott’s subscription for 25,598,929 Subscription Shares pursuant to the Subscription was a condition imposed by two of the investors participating in the Subscription, in connection with their participation. Mr Knott agreed to participate in the Subscription through his wholly owned investment vehicle Lothian Capital Partners 6 Limited, which has agreed to subscribe on similar terms to the New Investor. Allotment, and admission to trading on AIM, of the Subscription Shares due to the New Investor and Andrew Knott will occur following payment of the Subscription considerations due by each of the respective parties and by not later than 4 September 2025. All other participants in the Subscription will be settling their respective Subscription Considerations due at the time of issue of their Subscription Shares.

Reasons for the Fundraising and Use of Proceeds

The Company is conducting the Fundraising to enable it to execute its strategy of delivering Projects that Matter in Africa. The Board believes that this Fundraising is being conducted at the appropriate time and that it will enable strategic investment in the Company by long-term growth orientated investors. The net proceeds will be used to assist with meeting the objectives of the Company overall, with the current intention being to apply the proceeds as follows:

·      Enable the potential acceleration of key business development opportunities under consideration;

·      To repay and/or acquire approximately US$21 million of subsidiary company debt; and

·      General corporate purposes.

Admission, Total Voting Rights, Options and Warrants  

Application has been made to the London Stock Exchange for admission of the 298,134,852 Subscription Shares and the 285,714 new Ordinary Shares issued in respect of the exercise of options by Directors Sir Stephen O’Brien and David Clarkson, to trading on AIM (“Admission”). Application has also been made for the 6,095,726 new Ordinary Shares that were issued as noted in the Company’s 21 April 2023 RNS, which were not admitted to trading on AIM at the time due to the Company’s then suspension from trading. It is expected that Admission will become effective at 8.00 a.m. on or around 6 March 2025 or such later date as may be agreed.

Following Admission of the above 298,420,567 new Ordinary Shares, the Company will have 1,610,615,112 Ordinary Shares in issue. The Company does not hold any Ordinary Shares in treasury and accordingly this will be the total number of voting rights in the Company and may be used by Shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA’s Disclosure Rules and the Transparency Rules.

Application for the admission to trading on AIM of the 138,977,614 Subscription Shares to be issued to Andrew Knott and the New Investor will be made in due course, following payment of the consideration due by each of the respective parties, by not later than 4 September 2025.

In addition to the Ordinary Shares in issue, the Company continues to have in place agreements related to 101,113,992 warrants¹ and 22,645,634 options² granted to certain Directors, which are over unissued Ordinary Shares. Further details on these instruments and the holders are detailed in the below notes and in the Company’s 2023 Annual Report.

Yesterday’s RNS

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, announces an intention to complete a fundraising (the “Fundraising”) by way of a subscription of new ordinary shares of £0.001 each (“Ordinary Shares”) to raise up to £30.6 million and that the lifting of the suspension and restoration to trading on AIM of the Company’s existing Ordinary Shares will become effective at 7.30 a.m. on Tuesday 4 March 2025. The Company also provides the following financial and operational update.

Andrew Knott, CEO of Savannah Energy, said:

“Today we are announcing our intention to undertake a Fundraising by way of a subscription of new Ordinary Shares. We are also providing a comprehensive operational and financial update, including announcing that a new US$200m hydrocarbon asset acquisition facility has been signed. All of which is expected to lay a strong foundation for the delivery of our 2025 – 2030 organic and inorganic growth plans.

This is an exciting time for Savannah. Our core Nigerian business remains extremely robust: as at end 2024 we had US$3.4bn of contracted future revenues in our gas business with a weighted average contract life of 13 years and a 25-year reserve and resource life. This business has seen double-digit compound annual Adjusted EBITDA¹ and cash collections growth over the course of the past eight years.

There are nine key focus areas in our business over the course of the next 12 months: (1) delivering a further increase in our rate of cash collections in Nigeria²; (2) completion of the refinancing of our principal Nigerian debt facilities; (3) completion of the planned acquisition of 100% of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (the “SIPEC Acquisition”); (4) commencement of the Stubb Creek expansion project; (5) the advancement of our Chad/Cameroon arbitration processes³; (6) the commencement of the safe and successful drilling of our Uquo development and exploration wells; (7) the potential advancement of our R3 East development in Niger⁴; (8) the refinement of our power sector business model; and (9) the delivery of further transformational acquisitions.

Given our planned activity levels this year, our capital allocation policy remains unchanged: we intend to allocate our excess capital to our highest risk-adjusted return investment opportunities, assessing doing so against the potential to make distributions to shareholders. We will continue to review our approach to capital allocation as the business develops.

Lastly, I would like to express my gratitude to our shareholders and lenders for their support, as well as to our incredibly passionate and dedicated employees for the contributions they have made to our Company’s successes achieved to date. I look forward to updating our shareholders as we progress on the delivery of our focus projects throughout the year. Thank you all.”

Highlights

Funding

·      Intention to complete a Fundraising by way of a subscription of new Ordinary Shares to raise, in aggregate, approximately £30.6 million before expenses;

·      US$200 million acquisition debt facility signed with energy-focused investment company Blacksea W.L.L (“Blacksea”) providing access to potential funding for future hydrocarbon asset acquisitions⁵.; and

·      US$60 million reserve-based lending (“RBL”) facility signed in October 2024 with The Standard Bank of South Africa Limited and Stanbic IBTC Bank Limited to fund the SIPEC Acquisition, as previously announced on 3 December 2024.

Operational

·      Average gross daily production of 23.1 Kboepd for FY 2024, broadly in line with the prior year (FY 2023: 23.6 Kboepd), of which 88% was gas (FY 2023: 91%)⁶;

·      Commissioning of the US$45 million compression project at the Uquo Central Processing Facility (“CPF”) is now well underway and completion of this project is expected to enable the Company to maintain gas production levels over the medium and long-term;

·      Three gas contracts with customers agreed and extended in FY 2024 for a total of up to 105 MMscfpd (17.5 Kboepd);

·      Procurement process of long lead equipment progressing in Nigeria in preparation for a potential two-well drilling campaign on the Uquo Field in H2 2025, with an additional gas development well expected to add up to 80 MMscfpd of supplemental production capacity and a potential exploration well targeting an Unrisked Gross gas initially in place (“GIIP”) of 154 Bscf (25.7 MMboe) of incremental gas resources;

·      Progress continues on the planned SIPEC Acquisition with completion anticipated in the first half of March 2025. Following completion of the SIPEC Acquisition, we intend to commence an up to 18-month expansion programme which is anticipated to increase Stubb Creek Field gross production from an average of 2.7 Kbopd in 2024 to approximately 4.7 Kbopd;

·      Continuing to seek to progress the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, subject to satisfactory stakeholder agreements being entered into;

·      Up to 696 MW of renewable energy projects currently in motion, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hydroelectric project in Cameroon; and

·      Savannah is actively reviewing opportunities in both the thermal and renewable power sectors. The Company is in the process of refining our power sector business model and associated targets to reflect this and expect to provide updates on this process throughout the course of 2025.

Financial (unaudited)

·      FY 2024 Total Income⁷ of US$393.6 million (FY 2023: US$289.8 million), comprising Total Revenues⁸ of US$258.7 million (FY 2023: US$260.9 million) and Other operating income⁹ of US$134.9 million (FY 2023: US$28.9 million);

·      FY 2024 record cash collections of US$248.5 million (FY2023: US$206 million). As at 31 December 2024, cash balances were US$32.6 million (31 December 2023: US$107.0 million) and net debt stood at US$634.0 million (31 December 2023: US$473.7 million). Gross debt as at 31 December 2024 was US$666.5 million of which US$625.5 million (94%) is non-recourse to PLC; and

·      FY 2024 Total Revenues⁸ were ahead of the previously issued financial guidance of ‘greater than US$245 million’, while FY 2024 financial guidance is reiterated for Operating expenses plus administrative expenses¹⁰ at ‘up to US$75 million’. We expect FY 2024 capital expenditure to come in lower than planned (previously guided at ‘up to US$50 million’) due to the phasing of spend.

Update on Proposed South Sudan Transaction and Restoration to Trading on AIM

Further to the Company’s announcement on 20 December 2024, the Company has continued to progress an alternative transaction in respect of the acquisition of the ex-PETRONAS assets in South Sudan (the “Potential Transaction”) and, as such, the Company’s shares have remained suspended from trading on AIM. The Company has now terminated existing discussions relating to the Potential Transaction and, therefore, the lifting of the suspension and restoration to trading on AIM of the Company’s existing Ordinary Shares is expected to become effective at 7.30 a.m. on Tuesday 4 March 2025. However, the Company reserves the right to pursue a new version of the Potential Transaction which would not constitute a Reverse Takeover under the AIM Rules. The Company has held preliminary discussions with potential counterparties relating to such a potential variation.

Reasons for the Potential Fundraising and Use of Proceeds

The Company is intending to conduct a Fundraising to enable it to execute its strategy of delivering Projects that Matter in Africa. The Board believes that this Fundraising is being conducted at the appropriate time and that it will enable strategic investment in the Company by long-term growth orientated investors. The net proceeds will be used to assist with meeting the objectives of the Company overall, with the current intention being to apply the proceeds as follows:

·      Enable the potential acceleration of key business development opportunities under consideration;

·      To repay and/or acquire up to approximately US$21 million of subsidiary company debt; and

·      General corporate purposes.

The Company is aware that Andrew Knott, Director and CEO, and Blacksea intend to participate in the Fundraising, alongside several other participants, with a staged share admission process to be followed based on timing of funds received by the Company from certain of the subscribers. The Company is also aware that there will likely be an imminent substantial series of secondary trades in the Company’s shares, which certain directors intend to purchase shares in (the “Secondary Sale Process”). The issue price of the new Ordinary Shares comprising the proposed Fundraising will be equal to the price per Ordinary Share determined in the Secondary Sale Process. Additionally, certain directors intend to exercise share options previously awarded to them under various share option plans. Further details will be provided in the Company’s next announcement.

New Debt Financing

Savannah Energy Oil & Gas Limited (the “Borrower”), a subsidiary of the Company established to acquire interests in upstream oil and gas assets, has signed a US$200 million debt facility with energy-focused investment company Blacksea (the “Facility”)⁵.

The Facility is available to the Borrower 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 Facility is secured on the assets of the Borrower together with any new assets acquired using funds drawn under the Facility. It is a condition of utilisation of the Facility that Savannah and the lender and/or an affiliate of the lender enter into an offtake contract in respect of the production associated with the assets being acquired. The loan bears interest at SOFR¹¹ + 7%.

Valuation Update

The Company has appointed McDaniel & Associates to prepare updated competent person’s reports for the oil and gas assets of the Group. These reports are anticipated to be finalised and published alongside the Company’s FY 2024 annual report and accounts, which are expected to be released in early June 2025.

In the meantime, the Company has updated its internal management estimates of the potential PV10 value (on an unrisked basis) at an asset-level basis for its Nigeria and Niger assets. This is summarised in the following table:

*Asset values based on Savannah’s 80% share of Accugas and Uquo gas.

Principal differences to the Accugas, Uquo and Stubb Creek valuation cases relate to the differing value estimation dates, alongside certain changes to operational work programme assumptions and cost structure. The R3 East development plan has been comprehensively re-worked since the last published Niger CPR of December 2021, with a plateau production rate of around 10 Kbopd now assumed (previously 5 Kbopd)¹³.

Operational update

Hydrocarbons Division

Nigeria Existing Business

Average gross daily production was 23.1 Kboepd for FY 2024, broadly in line with the prior year (FY 2023: 23.6 Kboepd), of which 88% was gas (FY 2023: 91%)⁵;

Commissioning of the US$45 million compression project at the Uquo CPF is now well underway and completion of this project will enable us to maintain our gas production levels over the medium and long-term.

We are currently progressing the procurement process of long lead equipment in Nigeria in preparation for a potential two-well drilling campaign on the Uquo Field in H2 2025. The Uquo NE well (“Uquo NE”), is forecast to provide gas volumes of 60-80 MMscfpd to supplement the production capacity of our current Uquo well stock. An additional exploration well in the Uquo field (“Uquo South”) is also currently under consideration, which may be drilled back-to-back with the Uquo NE well. Uquo South is a well targeting an Unrisked Gross GIIP of 154 Bscf of incremental prospective gas resources on the Uquo licence area.

Conversion of Uquo Marginal Field and Stubb Creek Marginal Field to New 20-Year Petroleum Mining Leases

The Uquo Marginal Field and the Stubb Creek Marginal Field have been converted to new 20-year Petroleum Mining Leases, both effective 1 December 2023, in accordance with the Republic of Nigeria’s Petroleum Industry Act 2021.

Niger

We are continuing to seek to progress the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger. The Niger-Benin oil export pipeline, now fully operational, provides a potential route to international markets for crude oil produced from the R1234 contract area of our subsidiary, Savannah Energy Niger SA, with 90 Kbopd reportedly being transported from the China National Petroleum Corporation-operated Agadem PSC area.

Subject to satisfactory stakeholder agreements being entered into, Savannah Energy Niger SA may commence a four-well testing programme on the Amdigh-1, Eridal-1, Bushiya-1 and Kunama-1 discovery wells in 2025, with certain of the required long lead item equipment having already arrived in country. We are at the pre-contract award stage of the programme and our initial internal estimate of the total cost of the well test programme is approximately US$14.5 million (this will be subject to change as programme progresses and contracts are awarded). Assuming a successful well test programme, we would look to accelerate plans to commence commercial oil production from the R3 East Area and intend to incorporate the data acquired into our field development plan.

Power Division

In 2025 we expect to further refine our Power Division business model, the remit of which has now been expanded to include thermal as well as renewable energy projects. We continue to progress our existing portfolio of up to 696 MW of wind, solar and hydroelectric projects, with our principal focus projects being on the up to 250 MW Parc Eolien de la Tarka project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon.  

As a highly indicative rule of thumb, Savannah believes that African renewable energy projects generate un-risked NPV10s of up to US$0.5 million per MW (wind) / up to US$1.8 million per MW (hydro) / up to US$0.3 million per MW (solar) of nominal capacity at the time of commencement of operation. It should also be noted that it is not expected that all of the projects currently being progressed in the portfolio funnel will reach financial close. However, our project funnel should be viewed as dynamic, and we would expect to replace projects which do not progress to financial close with other new projects in an organic manner over time.

FY 2024 Unaudited Financial Review

The Group has performed in line with expectations.

Highlights

FY 2024 Total Income⁶ was US$393.6 million (FY 2023: US$289.8 million), comprising Total Revenues⁷ of US$258.7 million (FY 2023: US$260.9 million) and Other operating income of US$134.9 million⁹ (FY 2023: US$28.9 million).

FY 2024 cash collections were a record US$248.5 million (FY 2023: US$206.0 million). As at 31 December 2024, cash balances were US$32.6 million (31 December 2023: US$107.0 million) and net debt stood at US$634.0 million (31 December 2023: US$473.7 million). It should be noted that only 6% of outstanding debt as at 31 December 2024 is recourse to Savannah, with the balance sitting within subsidiary companies on a non-recourse basis. The Trade Receivables balance at year-end 2024 was US$538.9 million (31 December 2023: US$389.9 million) and this relates primarily to amounts due under various gas sales agreements in Nigeria.

Debt Facilities

In January 2024, a new NGN 340 billion four year-term facility was signed by Accugas with a consortium of five Nigerian banks (the “Transitional Facility”). As at 31 December 2024, NGN 332 billion of this facility had been drawn down, with the resulting funds being converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility, leaving a balance as at 31 December 2024 of approximately US$212.3 million.

As contemplated in the Transitional Facility agreement, we have requested an increase in the facility to enable the remaining outstanding US$ balance to be converted into Naira, allowing the remainder of the Accugas US$ Facility to be fully repaid within H1 2025. This process, when complete, will align Accugas’ debt facility with the currency in which gas revenues are received.

Arbitration Update

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.

SCI is involved in further arbitral proceedings in which designates of Société des Hydrocarbures du Tchad allege breaches by SCI of the Doba fields joint operating agreement¹⁶. SCI is defending the claims vigorously.  We currently expect these arbitral proceedings to be concluded no later than Q3 2026.

Business Development

Nigeria Proposed SIPEC Acquisition

In March 2024, we announced the proposed acquisition (via two separate transactions) of 100% of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (“SIPEC”) for a total consideration of US$61.5 million. SIPEC’s principal asset is the 49% non-operated interest in Stubb Creek. A subsidiary of Savannah, Universal Energy Resources Limited, is the 51% owner and operator. All regulatory consents for the SIPEC Acquisition have been obtained, including consent from the Honourable Minister of State, Petroleum Resources, which is conditional upon payment of ministerial consent and processing fees and other usual conditions for a transaction of this nature. Completion is anticipated in the first half of March 2025.

The SIPEC Acquisition will be funded from the US$60 million RBL Facility provided by The Standard Bank of South Africa Limited and Stanbic IBTC Bank Limited. The availability under the RBL Facility is US$60 million.

As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. Following completion of the SIPEC Acquisition, Savannah’s reserve and resource base is, therefore, expected to increase by approximately 46 MMboe from 158 MMboe to 204 MMboe (on a pro-forma basis as at 1 January 2024).

Following completion of the SIPEC Acquisition, we plan an up to 18-month expansion programme to increase the processing capacity of the Stubb Creek facilities. It is anticipated that this will lead to Stubb Creek gross production increasing from an average of 2.7 Kbopd in 2024 to approximately 4.7 Kbopd. Importantly, the SIPEC Acquisition also secures significant additional feedstock gas available for sale to our Accugas subsidiary.

AIIM Assets

Savannah has held discussions with its private equity partner Africa Infrastructure Investment Partners (“AIIM”) in relation to Savannah potentially acquiring AIIM’s 20% interest in the Accugas and SEUGL businesses. This discussion is based on the formula originally negotiated with them at the time of the initial acquisition and detailed in the respective shareholder agreements. The parties have agreed to make a decision in relation to any such transaction in March 2025. It is currently both Savannah and AIIM’s view that a transaction is unlikely to be agreed based on the formula¹⁷. AIIM would, therefore, continue to be an active partner in the Accugas and SEUGL businesses going forward.

Future M&A Activity

The Company continues to view M&A as a core source of potential future value creation for the business. Savannah takes a long-term approach to business development, which we believe is critical given the industry and jurisdictions in which we operate. M&A deals, particularly for energy assets, can frequently take more than four years from initial discussion to a successful conclusion, with only a small percentage of initial conversations resulting in a completed deal. Strategically, the Board and management team of Savannah, therefore, believe that it is critical to maintain a funnelled approach to business development, pursuing a large portfolio of potential deal opportunities in parallel, which are progressed through the deal maturation cycle and systematically evaluated based upon the deal’s structure and risk adjusted returns, as well as the fit with the Company’s execution capacity.

The African energy sector offers attractive M&A market dynamics, with, for example, large divestment programmes planned by major and national oil companies in the hydrocarbons sector and by private equity firms in the power sector. Active portfolio management through M&A and divestment transactions shift assets to those owners best positioned to maximise their value at that stage of the asset life cycle. Savannah is a potential partner of choice in these deals, given our strong regional relationships, operational experience, access to financing, and more efficient operational costs and corporate structure.

Throughout 2023 and 2024, Savannah’s shares remained suspended from trading on AIM in accordance with AIM Rule 14, as we pursued an acquisition that would have constituted a reverse takeover. We believe that such transactions can act as critical enablers of value accretive growth for ambitious high growth companies such as Savannah and should, therefore, be actively encouraged by the regulatory regime. However, the risk of potentially lengthy share suspension periods can act as a disincentive for companies to pursue such transactions. In our view consideration should, therefore, be given to potential amendments to the rules governing reverse takeovers, particularly in respect of suspension requirements, with a view to enhancing the AIM market’s attractiveness as a growth-focused exchange, while maintaining a suitable level of investor protection. This position is consistent with the UK Government’s well publicised pro-business growth agenda. Savannah intends to work with our advisers and other stakeholders to encourage the relevant decision makers to consider potential changes accordingly.

Union Jack Oil

Union Jack has announced, further to the RNS dated 25 February 2025, a positive update on the testing of the Moccasin 1-13 well, located in Pottawatomie County, Oklahoma, USA. Union Jack holds a 45% working interest in this well.  Reach Oil & Gas Company Inc, the Operator, holds the remaining 55% working interest.

•     The primary objective, the 1st Wilcox formation was perforated, tested and confirmed as a significant oil producer, free flowing under natural pressure, with no formation water present and minimal associated gas

•     Initial open hole average flow rate over several test periods and a number of days was recorded at 25.88 barrels of oil per hour equating to 621 barrels of oil per day

•     Moccasin is currently being evaluated under highly restricted flow using various choke sizes and has produced over 140 barrels per day of light crude oil with an API of 32 degrees, under a 13/64 choke (approximately 0.2 of an inch). During this evaluation phase, Moccasin will be further restricted with a smaller choke to monitor pressure to determine the production rate for maximum ultimate oil recovery

•     The installation of permanent production facilities, comprising oil storage tanks, separator and flowlines is complete and oil sales have commenced

•     Moccasin confirms the trapping of hydrocarbons in multiple zones within the structure

•     Two other zones, the Red Fork and the Bartlesville Sandstones to be perforated and evaluated in due course

•     Moccasin drill and completion costs have already been funded from the Company’s cash resources

Moccasin, now declared a commercial discovery, was drilled to a Total Depth of 5,690 feet to test a dip and fault closed structure, mapped from 3D seismic, downthrown on the west side of the Wilzetta fault.

Moccasin was an untested structural prospect with secondary targets in the Pennsylvanian Sands. The Moccasin structure is a compressive feature, associated with the regional Wilzetta Fault. This strike-slip fault was active through the Ordovician to early Carboniferous periods and is responsible for several large oil accumulations. The Woodford Shale, the main source for light oil across the region is present within the Moccasin structure and between the primary reservoir targets.

David Bramhill, Executive Chairman of Union Jack, commented: 

“The flow rates currently being seen from Moccasin, subject to further testing, are expected to provide material revenues to Union Jack going forward, adding to the financial contributions from the Andrews Field and the S&M well, part of our Rogers secondary recovery project, where a modicum of gas is now being produced and sold to market and the consistent monthly income from the Company`s Mineral royalty portfolio.

“Union Jack and Reach are currently planning to test a further 3D seismic supported structure which appears very similar to the Moccasin feature. Details of this potentially high-impact well, planned to be drilled in Q2 2025 and funded from the Company’s existing cash resources will be announced when confirmed.

“We are of course delighted at this success at Moccasin which has opened a raft of new and compelling opportunities for the Company in Oklahoma.”

Coming fast on the back of the initial news from the Moccasin well last week we now have even better news, current flow rates are ‘expected to provide material revenues to Union Jack going forward’. And going forward there is much to be optimistic about, the partners have another look-alike 3D supported structure to be drilled in the next quarter and like the rest, all paid for from ample existing resources.

Add to that the financial contributions from the Andrews Field and the S&M well as described above, part of the Rogers secondary recovery project and you get ‘consistent monthly income’ which pays tribute to the policy of investing the significant Wressle revenues in the USA.

Credit where credit is due and whilst the share price in no way reflects the significant value being created in the USA at the moment but as and when it does, as night follows day, that value will be reflected to those wise enough to be shareholders.

Miles Newman, Chairman of Reach, commented: 

“We are very pleased with the rates and pressure of the Moccasin well.

“It’s excellent to see all the hard geological, geophysical and data gathering over the years bear fruit.

“We are looking forward to building our successful partnership with Union Jack further.”

NTOG

Nostra Terra has announced a successful fundraise supported by institutional investors, Directors and Management, existing shareholders and new investors.

The Company has raised £500,000 (before expenses) through a subscription and placing of 2,173,913,043 new ordinary shares (the “Fundraise Shares”) at a price of 0.023p per share (the “Placing Price”) (the “Fundraise”).

Paul Welch, Nostra Terra’s Chief Executive Officer, said:

“I am pleased to announce that we have successfully completed a further £500,000 fundraise for the progression of our major operational program at the Pine Mills licence in East Texas. With three of the five workovers now completed, and production currently averaging ca.90 bopd over the last 5 days, this additional raise will enable us to finish the workover program, with production anticipated to reach ca. 110 bopd once this is done. Pine Mills continues to be a high-margin asset with considerable organic growth potential and today’s funding news enables us to realise further value from the acreage.

“In closing, I would like to thank our new and existing shareholders for their support with this Fundraise. We have ambitious plans for this business, both organic and inorganic, and we look forward to sharing further updates with all our stakeholders in due course.”

After a period of operational clean up which is showing decent signs of success NTOG is moving to stage two and having cleared up the debt and Augean stables that he inherited, a fund raise is possible in which new and existing shareholders have participated. I am aware that he has found supportive investors and this raise will enhance that process.

I did have a small concern that Paul Welch was finding NTOG a struggle and after I managed to get a very useful chat with him recently I think I was right but that he has now turned the corner. Whilst the company is still very small it has the ability to make deals, maybe in the US, maybe in South America or Africa but what you can’t argue with is that the shares are ‘dirt cheap’ and with an ambitious newish CEO offers a potentially exciting ride…

Predator Oil & Gas

Predator has announced the commencement of drilling operations on 3 March 2025 in its Guercif licence onshore Morocco at the MOU-5 well site.

Drilling operations will continue during March until all of the Company’s pre-drill potential reservoir intervals have been penetrated.

No further announcements will be made until wireline logging has been successfully completed and the results have been fully interpreted following an independent petrophysical analysis.

Nor further words needed from me, all will be revealed…

And finally…

Last night Forest completed their journey to the FA Cup QF’s by beating the unfortunate Tractor Boys 5-4 on pens.

Tonight in the Champions League the Gooners are at PSG whilst Villa go to Club Brugge.