30 September 2024
Savannah Energy PLC
("Savannah" or "the
Company")
2024 Half-Year Results
Savannah Energy PLC, the British
independent energy company focused around the delivery of
Projects that
Matter, is pleased to announce its unaudited half-year
results for the six months ended 30 June 2024.
Andrew Knott, CEO of
Savannah Energy, said:
"I am pleased to report our results for the first six months
of 2024, as well as the wider progress we are making developing our
business. Key highlights in H1 included the delivery of US$233m of
Total Income1 and the announcement of our planned
acquisition of SINOPEC's upstream assets in Nigeria. Alongside
this, we are pleased to report strong progress in the development
of our renewable energy business, particularly relating to our
planned projects in Niger and Cameroon. Looking forward we expect
to make a series of announcements around our entry into further
renewable energy projects prior to year-end. We remain
unequivocally an "AND" company, seeking to deliver strong
performance both for the short AND long term across multiple
fronts, and pursuing growth opportunities in both the hydrocarbon
AND renewable energy sectors."
Highlights
· Average gross
daily production of 24.4 Kboepd, a 3% increase compared to FY2023
(23.6 Kboepd);
· Up
to 696 MW of renewable energy projects in motion at period-end, and
targeting a portfolio of up to 1 GW+ of renewable energy projects
in motion by end 2024 and up to 2 GW+ by end 2026;
· Three contracts with customers agreed and extended in the
year-to-date for a total of up to 105 MMscfpd;
· Strong financial performance reported in the
period:
o Total Income1
increased by 40% to US$233.4 million (H1 2023: US$167.6 million), comprising Total
Revenues2 of US$123.5 million and Other operating income
of US$109.9 million;
o Operating profit of US$152.3
million, 130% higher than H1 2023 (US$66.2 million); and
o Adjusted EBITDA3
of US$91.6 million (H1 2023: US$108.2 million). This excludes Other
operating income which when included shows a 47% increase
year-on-year to US$201.5 million (H1 2023: US$137.1
million).
· Agreements signed to consolidate our interest in Stubb Creek
through the acquisition of 100% of Sinopec International Petroleum
Exploration and Production Company Nigeria Limited ("SIPEC") for a
total consideration of US$61.5 million (the "SIPEC Acquisition").
Completion of the SIPEC Acquisition is anticipated in Q4 2024, with
plans in place to more than double oil production to approximately
4.7 Kbopd within 12 months of completion;
· US$45 million compression project in Nigeria remains
on-budget and on-track for completion during 2024, enabling us to
maintain and grow our gas production levels over the long-term;
and
· Naira denominated debt facility signed with a consortium of
five Nigerian banks. This is being progressively drawn down, with
the resulting funds being converted to US$ to repay the existing
Accugas US$ Facility.
2024 Guidance
· Guidance is reiterated at:
o Total Revenues2 'greater than US$245
million';
o Operating expenses plus administrative expenses4
'up to US$75 million'; and
o Capital expenditure 'up to US$50 million'.
For further information, please
refer to the Company's website www.savannah-energy.com or
contact:
Savannah Energy
+44 (0) 20 3817 9844
Andrew Knott, CEO
Nick Beattie, CFO
Sally Marshak, Head of IR &
Communications
Strand Hanson Limited (Nominated
Adviser)
+44 (0) 20 7409 3494
James Spinney
Ritchie Balmer
Rob Patrick
Cavendish Capital Markets Ltd (Joint
Broker)
+44 (0) 20 7220 0500
Derrick Lee
Tim Redfern
Panmure Liberum Limited (Joint
Broker)
+44 (0) 20 3100 2000
Scott Mathieson
Kieron Hodgson
James Sinclair-Ford
Camarco
+44 (0) 20 3757 4983
Billy Clegg
Owen Roberts
Violet Wilson
This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018, as
amended.
About
Savannah:
Savannah Energy PLC is a British
independent energy company focused around the delivery of
Projects that
Matter in Africa.
Operational Review
Nigeria
Average gross daily production was
24.4 Kboepd an increase of 3% compared to FY 2023 (23.6
Kboepd).
During 2024 YTD, three gas
contracts have been agreed and extended for a total of up to 105
MMscfpd, including:
· An
extension of the agreement with First Independent Power Limited
("FIPL") was signed in January 2024 for an additional 12-month
period, whereby Accugas is supplying FIPL's FIPL Afam, Eleme and
Trans Amadi power stations with up to 65 MMscfpd of gas;
· A
new 24-month agreement was signed in July 2024 with Ibom Power
Company Limited, owner of the Ibom power station, to supply up to
30 MMscfpd of gas. This follows the expiration of the previous
10-year agreement; and
· An
extension of the agreement with Central Horizon Gas Company Limited
("CHGC") was signed in August 2024 for an additional 12-month
period, whereby Accugas is supplying CHGC with up to 10 MMscfpd of
gas.
Progress continues on the US$45
million compression project at the Uquo Central Processing Facility
("CPF"). In H1 2024, we completed the detailed engineering work,
the procurement of all long lead items and the site preparation,
piling and civil works. All remaining site installation works,
including structural works, electrical and instrumentation, piping
and mechanical works, and the compressor package installation
itself, are nearing completion and pre-commissioning activities are
underway.
The compression project remains on
budget and on track to be completed during 2024. The remaining
steps to it becoming operational include the finalisation of site
installation activities, mechanical works, and pre-commissioning
and commissioning activities, together with the receipt of
regulatory approval.
Post-period end in August 2024, we
successfully completed an annual maintenance programme at the CPF,
which involved a 10-day shutdown of the plant. This was also used
as an opportunity to tie in the new compression system.
We are currently working on a
proposed further development programme for the Uquo field which is
expected to see additional wells drilled in 2025 and
2026.
SIPEC
Acquisition
In March 2024, we announced the
proposed acquisition (via two separate transactions) of 100% of
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. We currently expect completion to
occur in Q4 2024. The transaction consideration is expected to be
funded through a new senior debt facility arranged by Standard Bank
of South Africa Limited and the existing cash resources of the
Company.
As at year end 2023, SIPEC had an
estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C
Contingent gas resources. Savannah's Reserve and Resource base is
expected to increase by approximately 46 MMboe following completion
of the SIPEC Acquisition. SIPEC oil production is estimated at an
average of 1.4 Kbopd for 2024. Following completion of the SIPEC
Acquisition, we plan to implement a de-bottlenecking programme at
the Stubb Creek processing facilities. It is anticipated that
within 12 months of completion of the acquisition, this will lead
to Stubb Creek gross production increasing by 135% to approximately
4.7 Kbopd. Importantly, the SIPEC Acquisition also secures
significant additional feedstock gas available for sale to our
Accugas subsidiary, underpinning Savannah's long-term ambition to
be the gas supplier of choice in Nigeria.
Niger
Savannah remains committed to 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 clear route to international markets for crude oil
produced from our R1234 contract area. We continue to progress our
planned four well testing programme and are in the process of
mobilising the required long lead item equipment into
country.
Located in the Tahoua Region of
southern Niger, Savannah's Parc Eolien de la Tarka wind farm
project is anticipated to be the country's first wind farm and
the largest in West Africa, with a total
power generation capacity of up to 250 MW. We have signed agreements with two leading international
Development Finance Institutions (the International Finance
Corporation, the private sector arm of the World Bank, and the US
International Development Finance Corporation, the U.S. government's development
finance institution)
to fund approximately two-thirds of the
pre-construction development costs of the project.
The project made significant
progress in H1 2024 with all key studies
now either complete or at an advanced stage. We submitted our
Environmental and Social Impact Assessment ("ESIA") scoping report
to the Government of Niger and have been continuing to progress the
ongoing ESIA field work additional studies required for the
submission of the full ESIA report, expected in 2025. As part of
the ESIA studies, Savannah is currently performing a land survey of
the wind farm area. We have partnered with the Department of
Geography of the Abdou Moumouni University of Niamey, where
Savannah has enabled a cartography and software training programme
for a cohort of its students, before deploying them under
supervision on the Tarka site. This has provided local students
with a material and exciting learning experience, while involving
them in a transformational energy project for their
country.
We hosted a site visit in August
2024 for Niger's Minister of Energy where we provided the Minister,
Governor of Tahoua, local officials and community representatives
with a presentation on the project and a tour of the wind farm
site. During the Minister's visit we detailed our plans for the
project and outlined its transformative potential for Niger and its
people. The Minister confirmed that the Parc Eolien de la Tarka
wind farm project is on the Ministry of Energy's list of priority
projects.
Parc Eolien de la Tarka is
expected to produce up to 800 GWh of electricity per year,
representing approximately 22% of Niger's annual electricity
demand, based on the country's projected energy demand in 2026. The
construction phase is expected to create over 500 jobs, while the
project has the potential to reduce the cost of electricity for
Nigeriens and avoid an estimated 450,000 tonnes of CO2
emissions annually.
We also continue to progress the
two photovoltaic solar power plants expected to be located within
20 km of the cities of Maradi and Zinder. In H1 2024, we presented
the preliminary commercial and technical proposals to the
Government of Niger. A sanctioning decision on these projects is
expected in 2025, with first power in 2027.
Cameroon
Substantial progress has been made
on the Bini a Warak Hybrid Hydroelectric and Solar Project in
Cameroon, following the approval of the optimisation and proposed
redesign of the project given by the Minister of Water and Energy.
The redesigned project, involving the construction of a
hydroelectric dam on the Bini River in the northern Adamawa region
of Cameroon, now incorporates photovoltaic solar, raising its
installed power generation capacity from up to 75 MW to up to 95
MW. We continue to progress the project towards an anticipated
project sanction in 2026, with first power targeted in the 2028 to
2029 window.
South Sudan
As separately announced today,
Savannah remains in active discussions regarding a potential
transaction in South Sudan. A further update is expected to be made
in early November.
Chad Arbitration Update
As previously disclosed in
Savannah's 2023 Annual Report, Savannah Chad Inc ("SCI"), has
commenced arbitral proceedings 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. Our other wholly owned
subsidiary, Savannah Midstream Investment Limited ("SMIL"), has
commenced arbitral proceedings 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 expect the arbitral proceedings
to be concluded in the second half of 2025. SCI and SMIL are
claiming in excess of US$840 million for the nationalisation of
their rights and assets in Chad, and SMIL has a claim valued at
approximately US$380 million for breaches of its rights in relation
to COTCo. Whilst the Government of the Republic of Chad has
acknowledged SCI's and SMIL's right to compensation, no
compensation has been paid or announced by the Government of the
Republic of Chad to date.
Savannah remains ready and willing
to discuss with the Government of the Republic of Chad an amicable
solution to the disputes. However, in the absence of such
discussions, the Group intends to vigorously pursue its rights in
the arbitrations.
Sustainability
We
published our Task Force on Climate-Related Financial Disclosures
2023 disclosure report and our maiden disclosure report in
accordance with our chosen 13 United Nations Sustainable
Development Goals in June 2024. We
continue to progress our 2024 sustainability performance
measurement and reporting in line with our sustainability
strategy.
Financial Review
The table below provides an
overview of our results for H1 2024 with a comparison for H1
2023:
Financial highlights
|
|
Six months
ended
30 June
2024
|
Six months
ended
30 June
2023*
|
|
Total Income1, US$
million
|
233.4
|
167.6
|
|
Adjusted EBITDA3, US$
million
|
91.6
|
108.2
|
|
Adjusted EBITDA3
including Other operating income, US$ million
|
201.5
|
137.1
|
|
Revenue, US$ million
|
114.8
|
123.7
|
|
Operating profit, US$
million
|
152.3
|
66.2
|
|
Operating margin, % (Operating
profit/ Total Income1)
|
65.3%
|
39.5%
|
|
Operating expenses plus
administrative expenses4, US$ million
|
27.5
|
25.1
|
|
Operating expenses plus
administrative expenses4, US$/Mscfe
|
1.1
|
1.1
|
* The prior year comparative has been restated
to conform with the presentation of "other operating income" in the
2023 annual report
Total Income1 is 40%
higher compared to previous period at US$233.4 million (H1 2023:
US$167.6 million) - this measures the total amount of invoiced
income for the period and captures both Total Revenues2
plus Other operating income. We believe this is the most
representative measure of the underlying income of the Group during
the period. The substantial increase is due principally to Other
operating income of US$109.9 million (H1 2023: US$28.9 million),
which relates to the re-billing of foreign exchange losses incurred
by Accugas as it converted historic Naira cash received into US
dollars. Total Revenues2 were slightly lower in the
period due to phasing of delivery of gas under certain contracted
GSAs and a different mix of customers supplied in the
period.
Operating profit was significantly
higher than H1 2023 at US$152.3 million (H1 2023: US$66.2 million),
driven again by the higher level of re-billing of realised foreign
exchange losses.
Adjusted EBITDA3 was
US$91.6 million (H1 2023: US$108.2 million), which excludes Other
operating income. When including this Other operating income,
Adjusted EBITDA3 would be US$201.5 million (H1 2023:
US$137.1 million). Adjusted EBITDA3 margin,
excluding Other operating income, is slightly lower at 74% (H1
2023: 78%), with this reduction largely due to an increase in
Operating expenses plus administrative expenses4 of 10%
compared to 2023. However, in H1 2023 certain costs, amounting to
US$6.9 million were recharged to operations in Cameroon which did
not re-occur in H1 2024. Excluding this recharge, underlying costs
decreased on a comparable basis.
Revenue
Revenue during the period of
US$114.8 million (H1 2023: US$123.7 million) was 7% lower than 2023
driven primarily by delivery of gas to a different mix of customers
compared to prior year.
As previously highlighted, it is
important to note the impact of take-or-pay accounting rules under
IFRS 15 on our Income Statement as regards to revenue recognition
for our gas sales agreements. The Revenue shown in the Condensed
Consolidated Statement of Comprehensive Income includes only the
gas, oil and condensate that has been delivered. The Total
Revenues2 of US$123.5 million (H1 2023: US$138.7
million) includes the volume of gas that customers are committed to
pay for under the take-or-pay terms of certain gas sales
agreements, which includes gas that has been delivered plus gas
invoiced but yet to be delivered, plus oil and condensate revenues.
The foreign exchange true-up invoices are also not reflected within
Revenue or Total Revenues2.
Savannah continues to benefit from
over US$3.4 billion of contracted future gas revenues in Accugas
with annual price escalation clauses tied to US consumer price
inflation.
Cost of Sales, administrative and other operating
expenses
Cost of sales amounted to US$34.7
million (H1 2023: US$35.5 million) which includes US$16.0 million
(H1 2023: US$14.9 million) for facility operating and maintenance
costs, US$2.6 million (H1 2023: US$2.7 million) royalty expenses
and US$16.1 million (H1 2023: US$17.8 million) depletion and
depreciation. Administrative and other operating expenses for the
period were US$15.9 million (H1 2023: US$14.3 million).
On a unit of production basis,
costs are stable at US$1.1/Mscfe (H1 2023:
US$1.1/Mscfe). Costs have been well managed during the period and
on an underlying basis are lower than in the prior period - during
H1 2023 there was approximately US$6.9 million of central costs
recharged to Cameroon operations which did not reoccur in H1
2024. The Company has taken steps to reduce central costs
which has kept costs stable on a unit of production
basis.
Transaction and other related
expenses of US$8.9 million (H1 2023: US$2.8 million) primarily
relate to legal expenses with respect to the ongoing arbitration
processes and the activity associated with the proposed
acquisitions in Nigeria and South Sudan.
Finance Costs
The 24% decrease in Finance costs
to US$39.3 million (H1 2023: US$51.8 million) is largely a result
of release of legacy non-cash related finance costs of US$9.6
million and a US$4.0 million reduction in other finance costs from
a lower unwind of the decommissioning provision discount. Interest
costs were broadly unchanged at US$42.1 million (H1 2023: US$41.4
million).
Foreign Exchange loss
Foreign exchange losses amounted
to US$67.6 million (H1 2023: US$82.9 million). Of this, US$49.9
million (H1 2023: US$54.7 million) are unrealised losses, mainly
due to movements in Naira monetary assets and liabilities,
specifically Naira cash balances, which occurred as a result of
further Naira devaluation from approximately NGN900:US$ at year-end
2023 to NGN1,470:US$ at 30 June 2024.
Realised losses were lower than
previous period at US$17.7 million (H1 2023: US$28.2 million).
Certain foreign exchange losses are recoverable through the true up
mechanism included in the GSA with our principal gas customer.
These amounts, when invoiced, are reported under Other operating
income - as noted above, in H1 2024 these amounted to US$109.9
million (H1 2023: US$28.9 million).
Cash flow
Operating cashflows before working
capital adjustments remained stable at US$166.3 million (H1 2023:
US$163.0 million).
Cash balances at 30 June 2024 were
US$42.9 million (31 December 2023: US$106.9 million) with the
reduction due principally to a US$60.2 million effect of
devaluation on Naira denominated cash and cash equivalent balances.
In addition, cash generated during the period was utilised towards
debt repayments and finance costs amounting to a combined US$106.8
million (H1 2023: US$102.9 million) partially offset by drawings
under the Accugas Naira transitional facility of US$39.0 million
(H1 2023: Nil).
Capital and exploration
expenditure for the period amounted to US$13.9 million (H1 2023:
US$4.2 million), the majority of which related to the Uquo
compression project.
Debt
Net debt at 30 June 2024 was
US$533.1 million an increase of 13% from year-end position (31
December 2023: US$473.7 million). Gross debt was reduced at
US$576.0 million (31 December 2023: US$580.7 million) and the
increase seen in net debt was primarily a result of the devaluation
of Naira denominated cash balances as discussed above. This has
resulted in leverage5 increasing from 2.6x to
3.2x.
It is worth noting the treatment
of the debt facility entered into to finance the acquisition of the
Chad and Cameroon Assets. Despite the Nationalisation there remains
an outstanding balance of US$126.7 million (31 December 2023:
US$119.3 million) - of this amount only up to a maximum of US$37.0
million is recourse to the Company with the remainder being fully
non-recourse. The only other debt within the Group which is
resource to the Company totals approximately US$11.9 million, with
all other borrowings on a non-recourse basis.
In H1 2024, a new NGN340 billion 4
year-term facility was signed by Accugas with a consortium of five
Nigerian banks. This facility is being progressively drawn down
with the resulting funds being converted to US$, which along with
cash held is used to repay the existing Accugas US$ Facility. This
process, when complete, will align Accugas' debt facility with the
currency in which gas revenues are received. Year to date NGN 196
billion has been drawn and we continue to also advance plans for a
potential long-dated domestic bond issuance to ultimately replace
the transitional facility.
Going Concern
The results have been presented on
a going concern basis. Details of the Group's assessment of going
concern for the period can be found in note 2.
Footnotes
1 Total Income is calculated as Total Revenues2 plus
Other operating income.
2 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 Condensed
Consolidated Statement of Comprehensive Income.
3 Adjusted EBITDA is calculated as profit or loss before
finance costs, investment revenue, foreign exchange gains or
losses, expected credit loss and other related adjustments, fair
value adjustments, gain on acquisition, share based payments,
taxes, transaction and other related expenses, depreciation,
depletion and amortisation and adjusted to include deferred revenue
and other invoiced amounts. Management believes that the
alternative performance measure of Adjusted EBITDA more accurately
reflects the cash-generating capacity of the business.
4 Group operating expenses plus administrative expenses are
defined as total cost of sales, administrative and other operating
expenses, excluding gas purchases, royalties, depletion,
depreciation and amortisation and transaction costs.
5 Leverage is defined as net debt/Adjusted EBITDA3.
For the 6-month period ended 30 June 2024, the Leverage calculation
is prepared on a rolling 12-month basis.
Condensed consolidated statement of
comprehensive income
for the six months ended 30 June
2024
|
|
|
Six months
ended
30 June
2024
US$'000
|
Six
months ended
30
June
2023
US$'000
|
|
|
Note
|
Unaudited
|
Unaudited
|
|
Continuing operations
|
|
|
|
|
Revenue
|
4a
|
114,788
|
123,728
|
|
Cost of sales
|
5
|
(34,695)
|
(35,464)
|
|
Gross profit
|
|
80,093
|
88,264
|
|
Other operating
income
|
4b
|
109,930
|
28,877
|
|
Administrative and other operating
expenses
|
|
(15,904)
|
(14,284)
|
|
Transaction and other related
expenses
|
6
|
(8,914)
|
(2,833)
|
|
Expected credit loss and other
related adjustments
|
12
|
(12,944)
|
(33,840)
|
|
Operating profit
|
6
|
152,261
|
66,184
|
|
Share of profit from
associates
|
|
-
|
3,580
|
|
Finance income
|
|
1,815
|
1,440
|
|
Finance costs
|
7
|
(39,271)
|
(51,752)
|
|
Fair value
through profit or loss
|
|
-
|
6,519
|
|
Foreign exchange loss
|
8
|
(67,592)
|
(82,893)
|
|
Profit/(loss) before tax
|
|
47,213
|
(56,922)
|
|
Current tax expense
|
9
|
(15,198)
|
(9,756)
|
|
Deferred tax
(expense)/credit
|
9
|
(11,662)
|
21,489
|
|
Total tax (expense)/credit
|
9
|
(26,860)
|
11,733
|
|
Profit/(loss) after tax
|
|
20,353
|
(45,189)
|
|
Discontinued operations
|
|
|
|
|
Profit after tax from discontinued
operations
|
19
|
-
|
91,962
|
|
Profit after tax and Total
comprehensive income from continuing and discontinued
operations
|
|
20,353
|
46,773
|
|
Total comprehensive
profit/(loss) attributable
to:
|
|
|
|
|
Owners of the Company
|
|
16,268
|
54,428
|
|
Non-controlling
interests
|
|
4,085
|
(7,655)
|
|
|
|
20,353
|
46,773
|
|
|
|
|
|
|
|
|
US cents
|
US
cents
|
|
Earnings/(loss) per share for continuing
operations
|
|
|
|
|
Basic
|
10
|
1.34
|
(3.09)
|
|
Diluted
|
10
|
1.28
|
(3.09)
|
|
Earnings per share including discontinued
operations
|
|
|
|
|
Basic
|
10
|
1.34
|
4.48
|
|
Diluted
|
10
|
1.28
|
4.26
|
Condensed consolidated statement of financial
position
as
at 30 June 2024
|
|
|
30 June
2024
|
31
December
2023
|
|
|
|
US$'000
|
US$'000
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and
equipment
|
11
|
465,958
|
476,144
|
|
Intangible assets
|
|
176,456
|
174,707
|
|
Financial investment
|
|
139,459
|
139,459
|
|
Deferred tax assets
|
|
215,656
|
227,318
|
|
Right-of-use assets
|
|
2,363
|
2,648
|
|
Restricted cash
|
|
29
|
29
|
Other non-current
receivables
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Inventory
|
|
7,148
|
7,143
|
|
Trade and other
receivables
|
12
|
442,301
|
370,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
Capital and reserves
|
|
|
|
|
Share capital
|
|
1,836
|
1,836
|
|
Share premium
|
|
126,824
|
126,824
|
|
Treasury shares
|
|
(136)
|
(136)
|
|
Other reserves
|
|
531
|
531
|
|
Share-based payment
reserve
|
|
15,732
|
14,717
|
|
|
|
|
|
|
Equity attributable to owners of
the Company
|
|
271,781
|
254,498
|
Non-controlling
interests
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
14
|
1,422
|
2,030
|
|
Borrowings
|
15
|
429,919
|
213,469
|
|
Lease liabilities
|
|
1,358
|
1,998
|
|
Provisions
|
|
50,134
|
49,256
|
|
|
|
|
|
Total non-current liabilities
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
14
|
98,613
|
108,000
|
|
Borrowings
|
15
|
146,124
|
367,199
|
|
Interest payable
|
17
|
100,926
|
136,090
|
|
Tax liabilities
|
|
16,795
|
6,384
|
|
Lease liabilities
|
|
2,295
|
2,798
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
|
|
Condensed consolidated statement of cash
flows
for
the six months ended 30 June 2024
|
|
|
Six months
ended
30 June
2024
|
Six
months ended
30 June
2023
|
|
|
|
US$'000
|
US$'000
|
|
|
Note
|
Unaudited
|
Unaudited
|
|
Cash flows from operating activities:
|
|
Profit/(loss) before tax from
continuing operations
|
|
47,213
|
(56,922)
|
|
Profit before tax from
discontinued operations
|
|
-
|
59,748
|
|
Adjustments for:
|
|
|
|
|
Depreciation
|
|
1,474
|
1,804
|
|
Depletion
|
|
16,126
|
17,832
|
|
Finance income
|
|
(1,598)
|
(1,350)
|
|
Finance costs
|
7
|
39,271
|
51,752
|
|
Share of profit from
associates
|
|
-
|
(4,155)
|
|
Fair value through profit or
loss
|
|
-
|
(6,519)
|
|
Unrealised foreign exchange
loss
|
8
|
49,875
|
54,689
|
|
Share-based payments
|
|
1,015
|
(74)
|
|
Expected credit loss and other
related adjustments
|
12
|
12,944
|
33,840
|
|
Chad Assets net
impairment
|
19
|
-
|
12,350
|
|
Operating cash flows before
movements in working capital
|
|
166,320
|
162,995
|
|
Increase in inventory
|
|
(5)
|
(1,521)
|
|
Increase in trade and other
receivables
|
|
(94,597)
|
(83,517)
|
|
Decrease in trade and other
payables
|
|
(1,604)
|
(54,209)
|
|
Increase in contract
liabilities
|
|
8,780
|
1,843
|
|
Income tax paid
|
|
(4,401)
|
(1,975)
|
|
Net cash generated from operating
activities
|
|
74,493
|
23,616
|
|
Cash flows from investing activities:
|
|
Interest received
|
|
134
|
668
|
|
Payments for property, plant and
equipment
|
|
(9,729)
|
(2,379)
|
|
Payments for exploration and
evaluation assets
|
|
(4,179)
|
(1,824)
|
|
Acquisition related
receipt
|
|
10,000
|
-
|
|
Proceeds from disposal
|
|
-
|
44,900
|
|
Loans and advances -
receipts
|
|
782
|
-
|
|
Loans and advances -
payments
|
|
(7,351)
|
(2,512)
|
|
Cash transferred from debt service
accounts
|
|
57,180
|
83,633
|
|
Lessor receipts
|
|
223
|
147
|
|
Net cash generated from investing
activities
|
|
47,060
|
122,633
|
|
Cash flows from financing activities:
|
|
Finance costs
|
|
(59,576)
|
(29,099)
|
|
Proceeds from issues of equity
shares, net of issue costs
|
|
-
|
2,013
|
|
Borrowing proceeds
|
17
|
39,018
|
-
|
|
Borrowing repayments
|
17
|
(47,236)
|
(73,783)
|
|
Lease payments
|
17
|
(467)
|
(484)
|
|
Net cash used in from financing activities
|
|
(68,261)
|
(101,353)
|
|
Net increase in cash and cash equivalents
|
|
53,292
|
44,896
|
|
Effect of exchange rate changes on
cash and cash equivalents
|
|
(60,172)
|
(66,493)
|
|
Cash and cash equivalents at beginning of
period
|
|
48,134
|
104,147
|
|
Cash and cash equivalents at end of period
|
13
|
41,254
|
82,550
|
|
Amounts held for debt service at end of
period
|
13
|
1,627
|
53,107
|
|
Cash at bank at end of period
|
13
|
42,881
|
135,657
|
Notes to the condensed consolidated interim
financial statements
1.
General
information
Savannah Energy PLC ("Savannah" or "the
Company") was incorporated in England and Wales on 3 July 2014. The
condensed consolidated financial statements of Savannah and its
subsidiaries (together the "Group") for the six months ended 30
June 2024 were approved and authorised for issuance by the board of
directors on
27 September 2024.
The Group's principal activities
are the exploration, development and production of natural gas and
crude oil and development of other energy related projects in
Africa.
The Company is domiciled in England for tax
purposes and its shares were listed on the Alternative Investment
Market ("AIM") of the London Stock Exchange on 1 August 2014.
The Company's registered address is 40 Bank
Street, London, E14 5NR.
2. Accounting
policies
Basis of Preparation
The condensed consolidated interim financial
statements included within this Interim
Report have been prepared in a form consistent with that
which will be adopted in the Company's annual accounts having
regard to the accounting standards applicable to such annual
accounts, and in accordance with the London Stock Exchange AIM
Rules for Companies. The provisions of IAS 34: Interim Financial
Reporting have not been applied.
The condensed consolidated interim financial
statements do not include all disclosures that would otherwise be
required in a complete set of financial statements and should be
read in conjunction with the Group's 2023 Annual Report and
Accounts 2023, for the year ended 31 December 2023 ("the Group's
2023 Annual Report"). The financial information for the six months
ended 30 June 2024 does not constitute statutory accounts within
the meaning of Section 434(3) of the Companies Act 2006 and is
unaudited.
The annual financial statements of Savannah
for the year ended 31 December 2023 were prepared in accordance
with UK-adopted international accounting standards in conformity
with the requirements of the Companies Act 2006. The Independent
Auditors' Report on the Group's 2023 Annual Report contained a
qualification opinion as described below, and as such contained a
statement under 498(2) or 498(3) of the Companies Act 2006.
The Group's statutory financial
statements for the
year ended 31 December 2023 have been filed with the Registrar of UK Companies.
All the Company's subsidiaries'
functional currency is US Dollars ("US$"), and the consolidated
financial statements are presented in US Dollars and all values are
rounded to the nearest thousand (US$'000), except when otherwise
stated.
The financial information presented
herein has been prepared in accordance with the accounting policies
used in preparing the Group's 2023 Annual Report. There are no
other new or amended standards or interpretations adopted from 1
January 2024 that have a significant impact on the interim
financial information.
As disclosed in the Group's 2023
Annual Report, the Republic of Chad nationalised the Group's
interests in its Chad subsidiaries Savannah Chad Inc ("SCI") and
Savannah Midstream Investment Limited ("SMIL"), (the "Chad Assets")
by way of a law passed on 31 March 2023 (the
"Nationalisation"). As a result of the Nationalisation, the
Group was unable to fully access all the underlying financial
information, nor have access to the relevant Chad-based employees
of the affected entities SCI and SMIL in order to prepare the
financial information: (i) for audit purposes to be consolidated
into the Group's financial statements for the year ended 31
December 2023, which were qualified in this respect; and (ii) for
the unaudited condensed consolidated interim financial statements
for the six months ended 30 June 2023.
Therefore, as at 31 March 2023 the activities
of the Chad Assets were considered as a discontinued operation, in
accordance with IFRS 5: Non-current Assets for Sale and
Discontinued Operations; and the net statement of financial
position associated with the Chad Assets was fully impaired such
that no balances remained in the consolidated statement of position
at subsequent reporting dates. In the six months ended 30 June
2024, no further transactions were recorded with this discontinued
operation and Note 20 sets out the position of any potential
contingent liabilities associated with the Chad Assets.
With respect to the Group's valuation of its
financial investment in Cameroon Oil Transportation Company
(COTCo), no further adjustment has been made as at 30 June 2024 -
more details of this financial investment is set out in the Group's
2023 Annual Report.
Going concern
The Group continues to trade
strongly throughout 2024 with cash collections from customers
amounting to US$148.6 million for the six months ended 30 June 2024
and a total cash balance of US$42.9 million at the reporting
date.
The Directors have reviewed the
Group's forecasted cash flows for the twelve months from the date
of publication of this Interim Report. When reviewing the forecasts
the Directors have considered the Group's current trading
performance and considered the potential impact from certain
sensitivities on the forecasted cash flows including changes in
commodity pricing, Naira currency rate movements and timing of cash
receipts from customers.
As a result, the Directors have
confidence in the Group's forecasts and have a reasonable
expectation that the Group will continue in operational existence
for the going concern assessment period and have therefore used the
going concern basis in preparing these interim
condensed financial statements.
3. Segmental reporting
For the purposes of resource allocation and
assessment of segment performance, the operations of the Group are
divided into four segments: three geographical locations and an
Unallocated segment. The current geographical segments are Nigeria,
Cameroon and Niger. All these geographical segments' principal
activities are exploration, development and extraction of oil and
gas. The Unallocated segment's principal activities are the
governance and financing of the Group, as well as undertaking
business development opportunities. Items not included within
Operating profit/(loss) are reviewed at a Group level and therefore
there is no segmental analysis for this information.
The following is an analysis of the
Group's continuing operations results by reportable segment for the
six months ended 30 June 2024:
|
|
Nigeria
|
Cameroon
|
Niger
|
Unallocated
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
Revenue
|
114,788
|
-
|
-
|
-
|
114,788
|
|
Cost of sales1
|
(34,639)
|
-
|
(10)
|
(46)
|
(34,695)
|
|
Gross profit
|
80,149
|
-
|
(10)
|
(46)
|
80,093
|
|
Other operating income
|
109,930
|
-
|
-
|
-
|
109,930
|
|
Administrative and other operating
expenses
|
(2,532)
|
-
|
(508)
|
(12,864)
|
(15,904)
|
|
Transaction and other related
expenses
|
(1,075)
|
-
|
-
|
(7,839)
|
(8,914)
|
|
Expected credit loss and other
related adjustments
|
(12,944)
|
-
|
-
|
-
|
(12,944)
|
|
Operating profit/(loss)
|
173,528
|
-
|
(518)
|
(20,749)
|
152,261
|
|
Finance income
|
|
|
|
|
1,815
|
|
Finance costs
|
|
|
|
|
(39,271)
|
|
Fair value through the profit or
loss
|
|
|
|
|
-
|
|
Foreign exchange loss
|
|
|
|
|
(67,592)
|
|
Profit before tax
|
|
|
|
|
47,213
|
|
|
|
|
|
|
|
|
Segment depreciation, depletion and
amortisation
|
16,128
|
-
|
114
|
1,358
|
17,600
|
|
Segment non-current assets
additions2
|
6,191
|
-
|
2,615
|
114
|
8,920
|
1. Refer to
Note 5 for items included within Cost of Sales.
2. Includes
Property, plant and equipment and Exploration and evaluation
assets.
3. Refer to
the Note 2, Accounting Policies - Basis of Preparation; Note 19,
Discontinued operations and Note 20, Contingent Liabilities, which
collectively sets out the Company's position with respect to the
Chad Assets.
The following is an analysis of the Group's
results by reportable segment for the six months ended 30 June
2023:
|
|
Nigeria
|
Cameroon
|
Niger
|
Unallocated
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
Revenue
|
123,728
|
-
|
-
|
-
|
123,728
|
|
Cost of sales1
|
(35,150)
|
-
|
(120)
|
(174)
|
(35,464)
|
|
Gross profit
|
88,578
|
-
|
(120)
|
(174)
|
88,264
|
|
Other operating income
|
28,877
|
-
|
-
|
-
|
28,877
|
|
Administrative and other operating
expenses
|
(3,748)
|
-
|
(107)
|
(10,429)
|
(14,284)
|
|
Transaction and other related
expenses
|
-
|
-
|
-
|
(2,833)
|
(2,833)
|
|
Expected credit loss and other
related adjustments
|
(33,840)
|
-
|
-
|
-
|
(33,840)
|
|
Operating profit/(loss)
|
79,867
|
-
|
(227)
|
(13,456)
|
66,184
|
|
Share of profit from
associates
|
|
|
|
|
3,580
|
|
Finance income
|
|
|
|
|
1,440
|
|
Finance costs
|
|
|
|
|
(51,752)
|
|
Fair value through the profit or
loss
|
|
|
|
|
6,517
|
|
Foreign exchange loss
|
|
|
|
|
(82,893)
|
|
Loss before tax
|
|
|
|
|
(56,922)
|
|
|
|
|
|
|
|
|
Segment depreciation, depletion and
amortisation
|
19,030
|
-
|
112
|
495
|
19,637
|
|
Segment non-current assets
additions2
|
2,816
|
-
|
3,211
|
29
|
6,056
|
1. Refer to
Note 5 for items included within Cost of Sales.
2. Includes
Third party investments, Property, plant and equipment, Exploration
and evaluation assets and Right-of-use assets.
3. Refer to
the Note 2, Accounting Policies - Basis of Preparation; Note 19,
Discontinued operations and Note 20, Contingent Liabilities, which
collectively sets out the Company's position with respect to the
Chad Assets.
4. Revenue
(a)
Revenue from contracts with customers
Set out below is the disaggregation of the
Group's revenue from contracts with customers:
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Gas sales
|
101,759
|
115,887
|
Oil and condensates
sales
|
13,029
|
7,841
|
Revenue from contracts with
customers
|
114,788
|
123,728
|
Gas sales represent gas deliveries made to the
Group's customers under gas sale agreements. The Group sells oil
and condensates at prevailing market prices.
(b) Other operating
income
Other operating income of US$109.9
million (2023: US$28.9 million) relates to the invoicing of foreign
exchange losses incurred on certain customer trade receivables that
are settled in a currency other than the invoiced currency and are
permitted to be invoiced to the relevant customer. The prior
period's comparative has been represented from Foreign exchange
losses to conform with the presentation in the financial statements
for the year ended 31 December 2023 and to more appropriately
reflect the nature of these transactions.
5. Cost of sales
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Depletion - oil and gas, and
infrastructure assets (Note 11)
|
16,126
|
17,832
|
Facility operation and maintenance
costs
|
15,975
|
14,928
|
Royalties
|
2,594
|
2,704
|
|
34,695
|
35,464
|
6. Operating
profit
Operating profit has
been arrived at
after charging:
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Staff costs
|
13,130
|
14,022
|
Depreciation - other assets (Note
11)
|
276
|
261
|
Depreciation - right-of-use
assets
|
485
|
522
|
Amortisation of
intangibles
|
713
|
1,021
|
Transaction and other related
expenses1
|
8,914
|
2,833
|
1.
Transaction and other related expenses primarily relate to the
Group's legal and other costs in relation to the Chad and Cameroon
arbitration processes, and acquisition related expenses relating to
the proposed acquisition of assets in South Sudan and
Nigeria.
7. Finance costs
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Interest on bank borrowings and
loan notes
|
42,061
|
41,350
|
Amortisation of balances measured
at amortised cost1
|
3,316
|
5,667
|
Unwinding of decommissioning
discount
|
542
|
2,119
|
Interest expense on lease
liabilities
|
85
|
136
|
Bank charges and other finance
costs
|
2,860
|
2,480
|
Reversal of prior period finance
costs
|
(9,593)
|
-
|
|
39,271
|
51,752
|
1. Includes
amounts due to unwinding of a discount on a long-term payable,
contract liabilities (Note 16) and amortisation of debt
fees.
8. Foreign exchange loss
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Realised loss
|
17,717
|
28,204
|
Unrealised loss
|
49,875
|
54,689
|
|
67,592
|
82,893
|
Realised foreign translation loss
mainly relates to the translation of Naira denominated transactions
into US Dollars. The comparative for Realised loss has been
represented in accordance with Note 4b. Unrealised loss relates to
the revaluation of monetary items held in currencies other than in
US Dollars.
9. Taxation
The tax expense/(credit) for the
Group is:
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Current tax
|
|
|
Adjustments in respect of prior
years
|
-
|
(42)
|
Current year
|
15,198
|
9,798
|
|
15,198
|
9,756
|
Deferred tax
|
|
|
Adjustments in respect of prior
years
|
1,118
|
(989)
|
Write down and reversal of previous
write downs of deferred tax assets
|
-
|
5,300
|
Origination and reversal of
temporary differences
|
10,544
|
(25,800)
|
|
11,662
|
(21,489)
|
Total tax expense/(credit) for the
period
|
26,860
|
(11,733)
|
Income tax expense is recognised
based on the actual results for the period and principally arises on Nigerian
profits.
10. Earnings/(loss) per share
Basic earnings per share amounts
are calculated by dividing the profit or loss for the period
attributable to owners of the Company by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share amounts
are calculated by dividing the profit or loss for the periods
attributable to owners of the Company by the weighted average
number of ordinary shares outstanding during the period, plus the
weighted average number of shares that would be issued on the
conversion of dilutive potential ordinary shares into ordinary
shares.
As there is a profit attributable
to the owners of the Company for the six months ended 30 June 2024,
the diluted weighted average number of shares has been calculated.
In the comparative period, the basic average number of shares was
used to calculate the diluted loss per share given there is a loss
attributable to the owners of the Company, meaning the diluted
weighted average number of shares reduces the loss per share.
Therefore, the basic weighted average number of shares was used to
calculate the diluted loss per share.
The weighted average number of
shares outstanding excludes treasury shares of 99,858,893 (30 June
2023: 99,858,893).
|
|
2024
|
2023
|
|
Unaudited
|
Unaudited
|
Six months ended 30
June
|
US$'000
|
US$'000
|
Profit/(loss) from continuing
operations
|
20,353
|
(45,189)
|
Profit/(loss) attributable to
owners of the Company1
|
16,268
|
(37,534)
|
Profit/(loss) attributable to
non-controlling interests
|
4,085
|
(7,655)
|
1.
The earnings per share calculation only takes into
account profit/(loss) attributed to owners of the
Company.
|
Number of shares
|
Number of
shares
|
Basic weighted average number of
shares
|
1,214,693,115
|
1,214,693,115
|
Add: employee share
options
|
59,887,307
|
63,727,684
|
Diluted weighted average number of
shares
|
1,274,580,422
|
1,278,420,799
|
|
US cents
|
US cents
|
Earnings/(loss) per share for
continuing operations
|
|
|
Basic profit/(loss) per
share
|
1.34
|
(3.09)
|
Diluted profit/(loss) per
share
|
1.28
|
(3.09)
|
23,853,457 options granted under
share option schemes are not included in the calculation of diluted
earnings per share because they are anti-dilutive for the six
months ended 30 June 2024 (30 June 2023: 23,853,457). These options
could potentially dilute basic earnings per share in the
future.
To calculate the EPS inclusive of
discontinued operations (Note 21), the weighted average number of
ordinary shares
for both the basic and diluted EPS
is as per the table above. The following table provides the
profit/(loss) amount in addition to the above used:
|
2024
|
2023
|
|
Unaudited
|
Unaudited
|
Six months ended 30
June
|
US$'000
|
US$'000
|
Profit for the period including
discontinued operations
|
|
|
Profit attributable to owners of the Company
|
16,268
|
54,428
|
|
US cents
|
US cents
|
Earnings per share including
discontinued operations
|
|
|
Basic profit per share
|
1.34
|
4.48
|
Diluted profit per
share
|
1.28
|
4.26
|
11. Property, plant and
equipment
|
|
Oil and gas assets
|
Infrastructure assets
|
Other assets
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Cost
|
|
|
|
|
|
Balance at 1 January 2023
(audited)
|
315,174
|
422,340
|
5,012
|
742,526
|
|
Additions
|
296
|
9,525
|
456
|
10,277
|
|
Disposals
|
-
|
-
|
(250)
|
(250)
|
|
Decommissioning remeasurement
adjustment
|
(287)
|
(1,699)
|
-
|
(1,986)
|
|
Transferred to discontinued
operations
|
(121,558)
|
-
|
-
|
(121,558)
|
|
Balance at 31 December 2023
(audited)
|
193,625
|
430,166
|
5,218
|
629,009
|
|
Additions
|
13
|
6,178
|
114
|
6,305
|
|
Disposals
|
-
|
-
|
(301)
|
(301)
|
|
Balance at 30 June 2024 (unaudited)
|
193,638
|
436,344
|
5,031
|
635,013
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
Balance at 1 January 2023
(audited)
|
(59,245)
|
(57,118)
|
(3,045)
|
(119,408)
|
|
Depletion and depreciation
charge
|
(20,097)
|
(14,722)
|
(504)
|
(35,323)
|
|
Disposals
|
-
|
-
|
250
|
250
|
|
Transferred to discontinued
operations
|
1,616
|
-
|
-
|
1,616
|
|
Balance at 31 December 2023
(audited)
|
(77,726)
|
(71,840)
|
(3,299)
|
(152,865)
|
|
Depletion and depreciation
charge
|
(9,207)
|
(6,919)
|
(276)
|
(16,402)
|
|
Disposals
|
-
|
-
|
212
|
212
|
|
Balance at 30 June 2024 (unaudited)
|
(86,933)
|
(78,759)
|
(3,363)
|
(169,055)
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
1 January 2023 (audited)
|
255,929
|
365,222
|
1,967
|
623,118
|
|
31 December 2023
(audited)
|
115,899
|
358,326
|
1,919
|
476,144
|
|
30
June 2024 (unaudited)
|
106,705
|
357,585
|
1,668
|
465,958
|
Upstream assets principally comprise
the well and field development costs relating to the Uquo and Stubb
Creek oil and gas fields in Nigeria. Infrastructure assets
principally comprise the Nigerian midstream assets associated with
the Group's network of gas transportation pipelines, oil and gas
processing facilities and gas receiving facilities. Other assets
include vehicles, office equipment and building improvements.
Decommissioning remeasurement adjustments reflect updated cost
estimates for the period/year.
Each year, management performs a
review of each CGU to identify potential impairment triggers.
During the six months ended 30 June 2024 and the year ended 31
December 2023, no such triggers were identified.
12. Trade and other receivables
|
30 June
2024
|
31 December
2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
Trade receivables
|
477,487
|
389,911
|
Receivables from a joint
arrangement
|
4,109
|
5,388
|
Other financial assets
|
5,788
|
5,829
|
|
487,384
|
401,128
|
Expected credit loss
|
(66,431)
|
(53,487)
|
|
420,953
|
347,641
|
Loans and advances
|
1,315
|
2,093
|
VAT receivable
|
1,645
|
1,100
|
Prepayments and other
receivables
|
18,388
|
20,023
|
|
442,301
|
370,857
|
The following has been recognised in
the Condensed statement of comprehensive income relating to
expected credit losses for the period:
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Provision for expected credit
losses
|
12,944
|
33,840
|
Expected credit loss and other
related adjustments
|
12,944
|
33,840
|
13. Cash at bank
|
30 June
2024
|
31 December
2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
Cash and cash
equivalents
|
41,254
|
48,134
|
Amounts held for debt
service
|
1,627
|
58,807
|
|
42,881
|
106,941
|
Cash and cash equivalents includes
US$0.4 million (31 December 2023: US$0.3 million) of cash
collateral on the Orabank revolving facility. The cash collateral
was at a value of XOF216.0 million (31 December 2023: XOF210.0
million).
Amounts held for debt service
represents Naira denominated cash balances which are held by the
Group for debt service, and this has been separately disclosed from
Cash and cash equivalents.
14. Trade and other payables
|
30 June
2024
|
31 December 2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
Trade payables
|
24,701
|
26,461
|
Accruals
|
25,328
|
29,273
|
VAT and WHT payable
|
17,271
|
16,601
|
Royalty and levies
|
6,821
|
6,815
|
Employee benefits
|
20
|
35
|
Financial liability
|
19,328
|
19,328
|
Other payables
|
5,144
|
9,487
|
Trade and other
payables
|
98,613
|
108,000
|
Other payables -
non-current
|
|
|
Employee benefits
|
1,422
|
2,030
|
|
1,422
|
2,030
|
|
100,035
|
110,030
|
The Directors consider that the
carrying amount of trade and other payables approximates to their
fair value.
15. Borrowings
|
30 June
2024
|
31 December 2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
Revolving credit
facility
|
8,888
|
11,376
|
Bank loans
|
334,945
|
345,849
|
Senior Secured Notes
|
88,033
|
86,626
|
Other loan notes
|
144,177
|
136,817
|
|
576,043
|
580,668
|
|
30 June
2024
|
31 December 2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
Current borrowings
|
146,124
|
367,199
|
Non-current borrowings
|
429,919
|
213,469
|
|
576,043
|
580,668
|
16. Contract liabilities
Contract liabilities represent the value of
gas supply commitment to the Group's customers for gas not taken
but invoiced under the terms of the contracts. The amount has been
analysed between current and non-current, based on the customers'
expected future usage gas delivery profile. This expected usage is
updated periodically with the customer.
|
30 June
2024
|
31 December 2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
Amount due for delivery within 12
months
|
14,677
|
17,654
|
Amount due for delivery after 12
months
|
360,765
|
346,490
|
|
375,442
|
364,144
|
|
30 June
2024
|
31 December 2023
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
As at 1 January
|
364,144
|
331,810
|
Additional contract
liabilities
|
15,793
|
48,378
|
Contract liabilities
utilised
|
(7,012)
|
(24,871)
|
Unwinding of discount on contract
liabilities
|
2,517
|
8,827
|
As at end of period
|
375,442
|
364,144
|
The unwinding of the discount on contract
liabilities relates to the fair value adjustments made under IFRS
3: Business Combinations following the acquisition of the Nigerian
assets and entities in 2019. The fair value adjustment was
calculated as the discounted, expected cost of the future
deliveries of gas volumes under the terms of customer take-or-pay
contracts. This discounted amount unwinds relative to an
apportioned amount of the contract liabilities volumes at the date
of acquisition that have subsequently been utilised.
17. Cash flow reconciliations
The changes in the Group's
liabilities arising from financing activities can be classified as
follows:
|
|
Borrowings
|
Interest payable
|
Lease liabilities
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
At 1 January 2024
(audited)
|
580,668
|
136,091
|
4,796
|
721,555
|
|
Cash flows
|
|
|
|
|
|
Proceeds
|
39,018
|
-
|
-
|
39,018
|
|
Repayment
|
(47,236)
|
(56,644)
|
(467)
|
(104,347)
|
|
|
(8,218)
|
(56,644)
|
(467)
|
(65,329)
|
|
Non-cash adjustments
|
|
|
|
|
|
Payment in kind adjustment/accretion of
interest
|
9,563
|
21,578
|
61
|
31,202
|
|
Net debt fees
|
(760)
|
-
|
-
|
(760)
|
|
Re-estimation of lease
liability
|
-
|
-
|
(773)
|
(773)
|
|
Foreign translation
|
(5,210)
|
(99)
|
36
|
(5,273)
|
|
Balance at 30 June 2024 (unaudited)
|
576,043
|
100,926
|
3,653
|
680,622
|
|
|
Borrowings
|
Interest payable
|
Lease liabilities
|
Total
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
At 1 January 2023
(audited)
|
645,789
|
105,600
|
5,079
|
756,468
|
|
Cash flows
|
|
|
|
|
|
Repayment
|
(73,783)
|
(28,545)
|
(484)
|
(102,812)
|
|
|
(73,783)
|
(28,545)
|
(484)
|
(102,812)
|
|
Non-cash adjustments
|
|
|
|
|
|
Payment in kind adjustment/accretion of
interest
|
9,723
|
32,694
|
136
|
42,553
|
|
Net debt fees
|
56
|
-
|
-
|
56
|
|
Borrowing fair value
adjustments
|
543
|
-
|
-
|
543
|
|
Working capital
movements
|
-
|
-
|
80
|
80
|
|
Foreign translation
|
(3,301)
|
(115)
|
140
|
(3,276)
|
|
Balance at 30 June 2023
(unaudited)
|
579,027
|
109,634
|
4,951
|
693,612
|
18. Capital commitments
At 30 June
2024, capital
commitments amounted to US$0.5 million (30
June 2023: US$6.6 million).
19. Discontinued Operations
As outlined in Note 2 Accounting
Policies - Basis of Preparation, the Group has classified all of
the activities associated with the Chad Assets as a discontinued
operation in accordance with IFRS 5. In the six months ended 30
June 2024, no further transactions were recorded within
discontinued operations.
Summarised in the table below for
the six months ended 30 June 2023 were the trading results from the
Chad Assets up to the date of the Nationalisation (31 March 2023),
together with a (total pre-tax) impairment loss of US$12.4 million
(excluding an associated tax credit reversal which amounted to
US$32.2 million).
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Revenue
|
-
|
76,560
|
Cost of sales
|
-
|
(4,452)
|
Gross profit
|
-
|
72,108
|
Administrative and other operating
expenses
|
-
|
(84)
|
Operating profit
|
-
|
72,024
|
Share of profit from
associates
|
-
|
575
|
Foreign translation
loss
|
-
|
(501)
|
Net impairment of SCI
|
-
|
(6,850)
|
Impairment of associate - Tchad Oil
Transportation Company (TOTCo)
|
-
|
(5,500)
|
Profit before tax
|
-
|
59,748
|
Tax credit
|
-
|
32,214
|
Net profit and total comprehensive
profit from discontinued operations
|
-
|
91,962
|
The net cash flows from the
discontinued operations are as follows:
|
2024
|
2023
|
|
US$'000
|
US$'000
|
Six months ended 30
June
|
Unaudited
|
Unaudited
|
Net cash generated from operating
activities
|
-
|
33,738
|
Net cash used in investing
activities
|
-
|
(10,441)
|
Net cash used in financing
activities
|
-
|
(16,779)
|
Net cash inflow
|
-
|
6,518
|
20.
Contingent
liabilities
As set out in Note 2, the impact
of the Nationalisation of the Chad Assets has resulted in the Group
not being able to determine liabilities within its subsidiary, SCI,
as to both type and quantum. The consequences of the
Nationalisation Law for SCI will be established by an arbitration
which SCI commenced during 2024 against the Republic of Chad. Based
upon the legal advice received and the Group's inability to
sufficiently identify and quantify, through any reasonable means,
the liabilities associated with SCI or the Chad Assets, the
Directors believe that these should be considered as contingent
liabilities in line with the requirements of IAS 37: Provisions,
Contingent Liabilities and Contingent Assets.
As reported in the Group's 2023
Annual Report there are conditions remaining to the completion of
the sale of the 10% interest in COTCo to Société Nationale Des
Hydrocarbures (SNH) and if the sale is completed it could result in
a tax liability. Given the uncertainty surrounding the completion,
the impact of the above arbitrations and the shareholder dispute,
it is not possible to properly assess if any tax liability will
arise.
21.
Events after the
reporting date
There are no events after the
reporting date other than those described within this
announcement.