WTI (Nov) $90.42 +$1.04, Brent (Dec)* $98.16 +$1.66, Diff -$7.74 -$5.47.

USNG (Nov) $3.03 +2c, UKNG (Nov) 184.5p +9.43p, TTF (Nov) €72.885 +€3.76.

*Denotes expiry of November contact.

Oil price

Oil is up again today with WTI showing a gain of $1.26 and the new brent contract up $2.05 at over $100 again.

To some this might seem odd as overnight G Sachs have said that more oil is coming out of the Gulf than before the conflict started at 23m+ barrels a day. So why over $100, why is the IEA about to release more strategic stocks, what about the risks of ship to ship transfers and insurance costs up and surely the Houthi rebels haven’t just slunk away? Just asking for a friend G Sucks…

The EIA inventory stats showed that the teenage scribblers, like those at Goldmans are even more clueless than the rest of us, crude built by 922/- b’s when the whisper was for a draw but more interesting were the products, no surprise there then as gasoline drew by 1.684m b’s and of course distillates drew by 2.251m. 

Opec+ meet at the weekend but I remain confident that there will be no changes to quotas this time round. 

Savannah Energy

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, is pleased to provide the following trading update for the eight months to 31 August 2026. All figures are unaudited.

Highlights

  • The Uquo South exploration well has been completed. Gas has been discovered in most of the targeted reservoirs and the gas discovery is expected to be fully evaluated following the upcoming well testing and evaluation programme;
  • The production expansion programme underway at Stubb Creek has delivered a 33% year-on-year increase in average gross daily production to 3.9 Kbopd for 8M 2026 (8M 2025: 2.9 Kbopd), with average production in July and August 2026 in excess of 5.0 Kbopd;
  • Group average gross daily production was 16.9 Kboepd for 8M 2026 (FY 2025: 18.8 Kboepd).1 With Uquo 13 on stream since August 2026, average gross daily production is expected to be approximately 20 Kboepd for the remainder of the year, with FY 2026 average gross daily production anticipated to be in the range of 18-20 Kboepd, depending on customer demand, and including further upside potential from the Uquo South well;
  • 8M 2026 cash collections increased 12% year-on-year to US$253.3 million (8M 2025: US$225.8 million); 
  • 8M 2026 Revenue increased 19% year-on-year to US$197.5 million (8M 2025: US$165.6 million);
  • As at 31 August 2026, cash balances totalled US$62.8 million (31 December 2025: US$42.7 million) and net debt stood at US$701.3 million (31 December 2025: US$658.8 million);
  • Trade Receivables balance as at 31 August 2026 was US$428.7 million, a 16% reduction on year-end 2025 (31 December 2025: US$508.5 million);
  • The Company continues to engage with the Government of Niger in relation to the R1234 PSC and the forward work programme; and
  • The Company continues to progress its portfolio of large-scale wind, solar and hydroelectric projects.

Andrew Knott, CEO of Savannah, said:

“I am pleased with the continued progress we have made during 2026, as we remain focused on delivering against the nine core focus areas we set out for the business at the start of 2025.

In Nigeria, our Stubb Creek production expansion programme continues to deliver strongly, with average gross daily production increasing by 33% year-on-year to 3.9 Kbopd for the first eight months of 2026 and average production in both July and August exceeding 5.0 Kbopd. The programme as a whole is targeting annual average gross production of up to 4.7 Kbopd.

We have successfully completed the Uquo South exploration well this month. Gas has been discovered in most of the targeted reservoirs, with the potential resource implications to be assessed following the upcoming well testing and evaluation programme. With Uquo 13 on stream since August, having been successfully tested up to 50 MMscfpd, we expect Group average gross daily production to be approximately 20 Kboepd for the remainder of the year, including further upside potential from Uquo South.

We also continue to make good financial progress, with cash collections increasing by 12% year-on-year to US$253.3 million and Revenue increasing by 19% to US$197.5 million for the first eight months of 2026. Additionally, our Trade Receivables balance has reduced by 16% since year-end 2025 to US$428.7 million, while our cash balance has increased to US$62.8 million.

We remain focused on driving further operational and financial progress across the Group during the remainder of the year.”

This looks like a good trading update, in particular at the top where the CEO notes the excellent operational performance at Stubb Creek where the production expansion programme ‘continues to deliver strongly’ with average gross daily oil production increasing by 33% year-on-year to 3.9 Kbopd for the first 8 months of this year and exceeding 5.0 Kbopd in both July and August. It is also worth noting the hedging policy which leaves 80% of forecast oil production for the next 12 months with unlimited upside potential. 

The Uquo South exploration well was completed in the period and the gas discovery is being evaluated after gas was found in most of the targeted reservoirs which will be assessed for potential resource implications following the upcoming well testing and evaluation programme. 

Uquo 13 has been onstream since August and average gross daily production for the remainder of the year is expected to be c. 20 Kboepd with full year guidance unchanged at 18-20 Kboepd including further upside potential from Uquo south. 

Savannah is making good financial progress with 8 month cash collections increasing by 12% to $253.3m and 8 month revenue up by 19% at $197.5m. This sees Savannah’s Trade Receivables balance down by 16% since the year end 2025 at $428.7m and cash balances are $62.8m up on the 2025 year end figure. 

Upcoming potential catalysts include the outcome of the arbitrations guided to Q4 of this year and the continuing focus on a further pay-down of Nigeria receivables. The audited full year 2025 accounts and the half year 2026 accounts are expected to be published in October at which point the shares will return from suspension and trading will be resumed.

Operational Update

Drilling of the Uquo 13 development well commenced in early April 2026 and was successfully completed at the end of May 2026. The well was subsequently tied back to the Uquo CPF, achieved first gas in July 2026 and has been on stream since August 2026, having been successfully tested up to 50 MMscfpd.

The Uquo South exploration well, which was spudded in early August 2026, has been completed this month. Gas has been discovered in most of the targeted reservoirs through pressure measurements, fluid sampling and logging, with the potential resource implications of the discovery to be assessed following the upcoming well testing and evaluation programme. The well was targeting an unrisked gross GIIP of 131 Bscf and, subject to the results of the well testing programme, has the potential to provide incremental gas resources within the Uquo licence area.

Following completion of the SIPEC Acquisition in March last year, the Stubb Creek expansion programme continues to progress well, already delivering a 33% year-on-year increase in average gross daily production to 3.9 Kbopd in 8M 2026. The full programme, expected to take up to 24 months, is anticipated to raise annual gross production to as much as 4.7 Kbopd. The Front-End Engineering and Design phase of the expansion programme has been completed, while we are planning the execution phase, with the expected signing of an Engineering, Procurement and Construction contract by the end of 2026. In parallel, early works have been fast-tracked to support an accelerated production ramp-up ahead of the broader expansion programme, with average production in July and August 2026 in excess of 5.0 Kbopd.

Average gross daily production was 16.9 Kboepd for 8M 2026 (FY 2025: 18.8 Kboepd), of which 76% was gas (FY 2025: 83%)1. With Uquo 13 now contributing to production, gross daily output is expected to be average approximately 20 Kboepd for the remainder of the year, including potential additional upside from the Uquo South exploration well. Savannah expects FY 2026 average gross daily production to be in the range of 18-20 Kboepd, subject to customer demand.

The Company continues to engage with the Government of Niger in relation to the R1234 PSC and the forward work programme. These discussions are aimed at resolving disputed issues arising under this contract and notably cover the contractual and operational framework for recommencing activity, including the treatment of periods during which operations have been materially constrained. The Company continues to reserve its rights under the R1234 PSC and is seeking to agree a mutually acceptable basis with the Government for future operations. Work will only recommence on these assets if, and when, the Company reaches such a satisfactory agreement with the Government. For FY 2024, Savannah had a carrying value of the R1234 PSC Area in its accounts of approximately US$175m and the carrying value of this asset is being assessed according to the relevant accounting standards as part of the finalisation of the FY 2025 accounts.

We continue to seek to progress our portfolio of renewable projects.

Financial Update (unaudited)

8M 2026 Performance Highlights

8M 2026 cash collections increased by 12% year-on-year to US$253.3 million (8M 2025: US$225.8 million), while 8M 2026 Revenue rose by 19% year-on-year to US$197.5 million (8M 2025: US$165.6 million).

As at 31 August 2026 cash balances were US$62.8 million (31 December 2025: US$42.7 million) and net debt stood at US$701.3 million (31 December 2025: US$658.8 million). Gross debt as at 31 August 2026 was US$764.1 million, of which only US$56.3 million (7%) was recourse to the Company, with the balance sitting within subsidiary companies on a non-recourse basis.

The Trade Receivables balance as at 31 August was US$428.7 million, a 16% reduction on year-end 2025 (31 December 2025: US$508.5 million). This relates primarily to amounts due under various gas sales agreements in Nigeria. Delivering an increase in cash collections in Nigeria remains a key focus area for the business.

Hedging

Savannah implements a rolling hedging programme for Stubb Creek oil production to ensure appropriate levels of cash flow in periods of oil price weakness. This strategy is primarily achieved through purchasing put options together with some limited volumes of collars where appropriate. Savannah does not utilise swaps or other fixed price instruments.

For H2 2026, Savannah has hedged 325,000 bbls of production using put options with a weighted average strike price of US$52/bbl and a further 215,000 bbls of production with collars with a weighted average floor price of US$59/bbl and weighted average ceiling price of US$83/bbl. Over 80% of the forecast oil production for the next 12 months has unlimited oil price upside and the remainder has a ceiling price broadly in line with the current average forecast oil price for the period.

Arbitration Update

Our wholly owned subsidiary, SCI, commenced arbitral proceedings in 2023 against the Government of the Republic of Chad 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, SMIL, commenced arbitral proceedings in 2023 in relation to the nationalisation of its investment in TOTCo, 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 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 in Q4 2026.

SCI and SMIL are claiming in excess of US$775 million (plus interest, which is currently estimated at in excess of US$215 million, and costs) for the nationalisation of their rights and assets in Chad.2 SMIL has a claim valued at approximately US$330 million (plus interest, which is currently estimated at in excess of US$67 million, and costs) for breaches of its rights in relation to COTCo.3 Whilst the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation, no compensation has been paid 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, SCI and SMIL intend to vigorously pursue their rights in the arbitration proceedings.

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 agreement.4 SCI is defending the claims vigorously. We currently expect these arbitral proceedings to be concluded in 2027.

Capital Allocation

As stated in the Company’s update on 25 August 2026, Savannah’s capital allocation policy remains unchanged. The Company intends to allocate any excess capital to its highest risk-adjusted return investment opportunities, assessed against the potential to return capital to shareholders. In this context, the Company has authority, granted by shareholders at the Annual General Meeting held on 1 June 2026, to purchase up to 313,288,589 Ordinary Shares and may undertake share buybacks opportunistically, subject to the Company being in an open period and not being in possession of inside information, and having regard to corporate liquidity and prevailing market conditions.

Financial Reporting Update

The Company advises that its audited FY 2025 Financial Statements and Annual Report, and its unaudited Half-Year Results for the six months ended 30 June 2026 are expected to be released during October 2026. As a result of the delayed publications, and pursuant to the requirements of AIM Rules 18 and 19, the Company’s shares will remain suspended from trading on AIM until, inter alia, both sets of accounts are published.

AIM Quotation Review Update

As previously announced on 22 October 2025, the Board initiated a review of the appropriateness of Savannah’s admission to trading on AIM and the potential alternative options available to the Company, including alternative listing venues or structures (the “Review”). The Review remains ongoing and no decision has been taken by the Board in relation to its outcome. A further announcement will be made as and when appropriate.

Serica Energy

Serica has announced the completion of the acquisition of a portfolio of Southern North Sea assets from Spirit Energy Limited and certain affiliates, strengthening Serica’s production base and reserves.

A net payment of £33 million ($43 million) has been paid to Spirit Energy, consisting of the upfront consideration of £57 million ($75 million), reduced by the interim post-tax cashflows calculated in accordance with the terms of the SPA between the effective economic date of 1 January 2025 and the 1 October 2026 completion date.

The Transaction delivers an immediate and meaningful contribution to Serica’s production, through the addition of around 10,000 boepd, and near-term cash generation. Free cash flow from the Acquired Assets is forecast to exceed $200 million by the end of 2028, more than double the expectation at the time of announcement in December 2025, due primarily to a stronger gas price outlook, a robust production outlook, and rephasing of some interim period production and cash flows into the post-completion period. 

The Acquired Assets comprise a material Southern North Sea gas portfolio totalling 18.7 mmboe of 2P reserves, and 2C resources of 3.4 mmboe, as at the Transaction effective economic date of 1 January 2025[1].

The Transaction adds a 15% non-operated working interest in the Cygnus field, one of the largest producing gas fields on the UK Continental Shelf; a 25% non-operated working interest in the Clipper South gas field; operated positions across various assets in the Greater Markham Area (‘GMA’); and further operated and non-operated interests in gas fields across the Southern North Sea. The seller is retaining decommissioning liabilities on the operated assets, expected to constitute over 75% of the total estimated decommissioning liability, which further supports the attractive risk-adjusted economics of the Transaction.

Going forward, production from the Acquired Assets will be reported as Serica’s Southern North Sea Hub.

Chris Cox, Serica’s CEO, stated:

“We are delighted to complete this acquisition of high-quality assets which materially boost our production and reserves while increasing our commodity weighting towards gas. This is an excellent transaction for Serica: it is immediately cash generative, strengthens our position in the UK gas market and adds a significant new Southern North Sea hub to our portfolio. With forecast free cash flow from the acquired assets expected to exceed $200 million by the end of 2028, the value case has strengthened materially since announcement. We are excited to welcome our new colleagues in Hoofddorp in the Netherlands and Aberdeen to Serica and to move quickly into integration, as we continue to build a stronger, resilient, and cash-generative North Sea business.”

Serica announces the formal completion of the Spirit deal which sees them acquire a great portfolio of Southern North Sea gas assets to be named the Serica Southern North Sea Hub. The cost of $43m is less than expected, the initial $75m has been reduced by the interim cash flows as the effective date and the overall effect is to make the deal cost a very attractive $3.95 per 2P barrel. 

The deal is highly cash generative from day 1 and will generate in excess of $200m by the end of next year, that makes this such a great deal which is extremely accretive from day 1. 

Serica remains a Bucket List favourite and at 255p is still at a discount to my target price of 400p which is by no means an over optimistic rating.