TIDMSAVE
RNS Number : 2876J
Savannah Energy Plc
09 December 2022
9 December 2022
Savannah Energy PLC
("Savannah" or "the Company")
Completion of ExxonMobil Transaction in Chad & Cameroon,
Publication of Supplemental Admission Document
and Board Changes
Savannah Energy PLC, the British independent energy company
focused around the delivery of Projects that Matter in Africa , is
pleased to announce the completion of its acquisition of
ExxonMobil's entire upstream and midstream asset portfolio in Chad
and Cameroon, including operatorship of the upstream assets
(through the acquisition of the former operator, Esso Exploration
and Production Chad, Inc.) (the "ExxonMobil Transaction"). Savannah
is also pleased to announce the publication of a Supplemental
Admission Document (the "Document") in relation to the ExxonMobil
Transaction. Selected extracts from Part 1 of the Document Letter
from the Non-Executive Chair of Savannah are reproduced below.
Shareholders are however encouraged to read the Document in
full.
This announcement follows Savannah's 13 December 2021
announcement of the signing of a Share Purchase Agreement ("SPA")
with ExxonMobil, which has an economic effective date of 1 January
2021, and the publication of its 31 December 2021 Admission
Document containing details on, inter alia, the ExxonMobil
Transaction. The ExxonMobil Transaction constituted a reverse
takeover transaction pursuant to AIM Rule 14 and, accordingly, was
subject to, inter alia, shareholder approval which was granted on
24 January 2022. The ExxonMobil Transaction has now been
completed.
Re-admission of the share capital of the group as enlarged by
the ExxonMobil Transaction is scheduled to take place at 8.00 a.m.
on 13 December 2022.
Transaction Highlights
Following the completion of the ExxonMobil Transaction, Savannah
now owns a 40% interest in the Doba Oil Project and an effective c.
40% indirect interest in the Chad-Cameroon export transportation
system:
-- The Doba Oil Project comprises interests in seven producing
fields - Kome, Miandoum, Bolobo, Moundouli, Maikeri, Nya and Timbre
- with a combined gross 2P Reserve base of 142.3 MMbbls as at 1
October 2022 and expected 2022 gross production of 28.0 Kbopd;
and
-- The Chad-Cameroon export transportation system comprises a
1,081 km pipeline and the Kome Kribi 1 floating storage and
offloading facility, offshore Cameroon (along with all associated
facilities). The Chad/Cameroon pipeline is 30" in diameter with a
nameplate capacity of 250 Kbopd and an estimated pipeline
throughput in 2022 of 124 Kbopd, from more than 15 fields;
Strand Hanson Limited is acting as Financial & Nominated
Adviser to the Company in connection with the ExxonMobil
Transaction.
The Document is available to download from the Company's website
in accordance with AIM Rule 20:
www.savannah-energy.com
The Company's proposed acquisition of PETRONAS (E&P)
Overseas Ventures SDN. BHD.'s interests in the same assets in Chad
and Cameroon is not a condition of the ExxonMobil Transaction.
Andrew Knott, CEO of Savannah Energy, said:
"We are delighted to announce the completion of our US$407
million acquisition of ExxonMobil's upstream and midstream
businesses in Chad and Cameroon. I would like to warmly welcome our
new employees to the Savannah family and look forward to building
our in-country businesses with them as we embrace the multiple
growth opportunities available to us.
In Chad, our focus will immediately turn towards making the
investments we believe the Doba Oil Project needs to significantly
increase production volumes from current levels and the advancement
of our up to US$500m/500 MW of renewable power projects. We expect
our investments in these projects to provide significant increased
tax revenues and electricity access for the people of Chad. In
Cameroon, we hope to see the COTCo and TOTCo businesses grow
further over the course of the coming years through additional
third-party customer throughput volumes. We are also actively
considering investments in other opportunities to pursue Projects
that Matter in country.
Outside of Chad and Cameroon, we expect that, in the coming
months, we will further augment our corporate growth profile
through the announcement of additional hydrocarbon asset
acquisitions and the initiation of new utility-scale renewable
energy projects (in addition to our existing up to 750MW project
pipeline).
Lastly, I would like to the opportunity to express my gratitude
to all those who contributed to the successful completion of this
transaction and, in particular, our host country stakeholders, my
incredibly dedicated and passionate colleagues and the ExxonMobil
deal and in-country teams. Thank you all."
Re-Admission and Total Voting Rights
The Company's issued share capital currently comprises
1,306,098,819 ordinary shares. Application has been made to the
London Stock Exchange plc for re-admission of the Company's
1,306,098,819 ordinary shares to trading on AIM, which is expected
to take place at 8.00 a.m. on 13 December 2022.
As the Company does not hold any shares in treasury, this figure
of 1,306,098,819 Ordinary Shares may continue to be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency
Rules.
Board Appointments
Further to the Company's announcement of 7 June 2022, the
Company is pleased to announce that the proposed appointments of
Sarah Clark and Dr Djamila Ferdjani as Non-Executive Directors of
the Board will become effective on completion of the ExxonMobil
Transaction. The appointment of Sylvie Rucar has been delayed due
to personal reasons and is now anticipated to become effective
during early 2023.
Sarah Clark
Sarah was an elite level athlete for 18 years and is a former
British, European and Commonwealth champion in the sport of judo,
who competed at three Olympic Games for Great Britain. She is
currently CEO of Edinburgh, Judo one of the UK's largest, most
successful and fastest growing judo clubs catering for beginners to
Olympic medallists. Sarah currently serves as a Non-Executive
Director of JudoScotland (the governing body for judo in
Scotland).
Sarah has worked extensively in mentor, role model and
leadership positions with organisations such as the Dame Kelly
Holmes Trust, the Youth Sport Trust and the Winning Scotland
Foundation. In these roles, her focus has been to deliver personal
and group development programmes to young people from disadvantaged
backgrounds and communities. She has also worked extensively with
individuals and companies delivering programmes around the positive
learnings businesses can take from the elite level sport world.
Dr Djamila Ferdjani
Dr Ferdjani is a medical doctor, entrepreneur and social
activist. She founded the Pro-Santé Polyclinic in Niger, of which
she was President and CEO. Djamila formerly served as a technical
consultant to the Islamic Development Bank and as a Professor of
Health Prevention and Promotion at the African Development
University.
She is a founding Board member of Afrikajom (the leading Pan
African human rights focused think tank) and is the founder and
President of MedCom NGO (a Niger focused medical and educational
NGO). She is a former a member of the executive committee of the
Orange Niger Foundation. She regularly speaks at African focused
Human Rights events, including those organised by the World Bank,
Oxfam, Plan International, the G5 Sahel, The Open Society
Initiative for West Africa, the National Democratic Institute and
TEDx. Dr Ferdjani has been named by the United Nations Population
Fund as one of the 100 women leaders in Niger and by Facebook as
one of 19 African LeadHERs breaking boundaries in the fields of
media, entertainment, education and business.
Information required pursuant to paragraph (g) of Schedule Two
of the AIM Rules for Companies on Sarah Clark and Dr Djamila
Ferdjani is set out below.
Sarah Louise Clark, aged 44
Current Directorships/Partnerships Past Directorships/Partnerships
(last 5 years)
Peebles Sport Ltd JudoScotland
--------------------------------
Dr Djamila Ferdjani, aged 60
Current Directorships/Partnerships Past Directorships/Partnerships
(last 5 years)
NGO Medcom None
--------------------------------
Other than the information contained within this announcement,
there is no further information required to be disclosed pursuant
to paragraph (g) of Schedule Two of the AIM Rules for
Companies.
For further information, please refer to the Company's website
www.savannah-energy.com or contact:
+44 (0) 20 3817
Savannah Energy 9844
Andrew Knott, CEO
Nick Beattie, CFO
Sally Marshak, Head of IR & Communications
+44 (0) 20 7409
Strand Hanson (Nominated Adviser) 3494
James Spinney
Ritchie Balmer
R ob Patrick
finnCap Ltd (Joint Broker)
Christopher Raggett +44 (0) 20 7220
Tim Redfern 0500
Panmure Gordon (UK) Ltd (Joint Broker) +44 (0) 20 7886
John Prior 2500
Hugh Rich
J ames Sinclair-Ford
+44 (0) 203 757
Camarco 4980
Billy Clegg
Owen Roberts
Violet Wilson
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No. 596/2014, as it forms
part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended, and is disclosed in accordance
with the Company's obligations under Article 17 of those
Regulations.
About Savannah Energy:
Savannah Energy PLC is an AIM quoted British independent energy
company focused around the delivery of Projects that Matter in
Africa and is active in Cameroon, Chad, Niger and Nigeria.
Further information on Savannah Energy PLC can be found on the
Company's website: www.savannah-energy.com .
Selected extracts from Part 1: Letter from the Non-Executive
Chair of Savannah from the Document
1 Introduction
On 13 December 2021, the Company announced that it had entered
into an agreement to acquire ExxonMobil's interests in the Doba Oil
Project and the Chad-Cameroon ETS, which constituted a reverse
takeover transaction pursuant to Rule 14 of the AIM Rules. The
proposed transaction was approved by Shareholders on 24 January
2022.
The Company is pleased to confirm that completion of the Exxon
Acquisition took place on 9 December 2022. Consequently, the
Company's Existing Share Capital will be cancelled from trading on
AIM at 4.30 p.m. on 12 December 2022 and Re-Admission of the
Company's Existing Share Capital will take place at 8.00 a.m. on 13
December 2022.
The consideration payable by the Company in respect of the Exxon
Acquisition is being funded by a combination of the proceeds of the
drawdown on the Exxon Prepayment Facility and existing cash
resources.
The key terms of the Exxon Acquisition are summarised in Part 2
of the Document.
You should read the whole of the Document and the December 2021
Admission Document, and not just rely on the information contained
in the Document.
2 Update on the Exxon Acquisition
Following the publication of the December 2021 Admission
Document, the Company appointed a new senior management team in
Chad. This team has been working with ExxonMobil's transition team
and EEPCI to prepare for the transfer of the operated Chad/Cameroon
Assets to Savannah Chad.
The Company has also focused on preparing to deliver the
business support services currently provided by ExxonMobil
affiliates to TOTCo and COTCo via the ExxonMobil Services
Agreement.
Savannah's business support functions have engaged with local
teams on critical business processes in both Chad and Cameroon.
The ExxonMobil and Savannah IT teams have taken the necessary
actions in preparation for transitioning key business systems,
applications, and IT infrastructure from ExxonMobil to Savannah
whilst maintaining continuity of business operations, which will
take effect on or shortly following Completion.
During 2022, production rates at the Doba Oil Project have not
deviated materially from those disclosed in the Chad/Cameroon CPR
dated 17 December 2021.
3 Details of the Exxon Prepayment Facility
Savannah Energy Finance (as borrower), the Exxon Lender (as
lender) and EACMI (as marketing agent) entered into an up the
US$170 million Prepayment Facility Agreement to fund Completion of
the Exxon Acquisition in accordance with the Exxon SPA.
The key terms of the Exxon Prepayment Facility are set out in
paragraph 3.1 of Part 5 of the Document.
4 Status of PETRONAS Acquisition
Completion of the PETRONAS Acquisition is not a condition of the
Exxon Acquisition.
5 Company History and Events Arising since the publication of
the December 2021 Admission Document
Savannah is a leading, Africa-focused, British, independent
energy company quoted on AIM. The Company is the holding company of
the Existing Group and currently operates from offices in the UK
(London), Nigeria (Abuja, Lagos, and Uyo) and Niger (Niamey).
5.1 Nigeria
In Nigeria, the Company has a significant controlling interest
in a large-scale integrated gas production and distribution
business which is currently supplying gas to facilitate over 24 per
cent. of Nigeria's thermal power generation. The Company acquired
the Nigerian Assets in November 2019 (refer to the April 2020
Supplemental Admission Document for further information). The
Nigerian Assets comprise interests in two large-scale oil and gas
fields, the Uquo non-associated gas field and the Stubb Creek oil
and gas field, with net 2P Reserves and net 2C Resources, as
estimated by CGG in the 2021 Nigeria CPR, of 79.3 MMboe and 60.0
MMboe, respectively, and the Accugas Midstream Business, all of
which are located in South-East Nigeria.
Average gross daily production from the Nigerian assets in the
year-to-date period ended 31 October 2022 was 27.0 Kboepd, a 23 per
cent. increase from the average gross daily production of 21.9
Kboepd in the same period in 2021. Of the total average gross daily
production of 27.0 Kboepd in the year-to-date period, 90 per cent.
was gas, including a 27 per cent. increase in production from the
Uquo Gas Project compared to the same period last year, from 115.6
MMscfpd (19.3 Kboepd) to 146.4 MMscfpd (24.4 Kboepd).
The Company's cash collections from its Nigerian Assets for the
ten months ended 31 October 2022 amounted to US$156.8 million, an
increase of five per cent. on equivalent period in 2021 of US$149.2
million.
A new gas production well, Uquo-11, commenced production in
April 2022 and produced at an average rate of 80 MMscfpd up to 31
October 2022.
During 2022, the Company signed, via its subsidiary, Accugas
Limited, new gas sales agreements ("GSAs") in Nigeria with: (i)
Central Horizon Gas Company Limited ("CHGC"), a major gas
distribution company situated in the South-South region of Nigeria;
(ii) TransAfam Power Ltd, a licensed power generation company in
Nigeria; and (iii) Notore Chemical Industries PLC, a Nigeria-based
integrated agro-allied, chemicals and infrastructure company
located in the Onne Oil and Gas Free Zone area of Rivers state in
southern Nigeria. In addition, a contract extension was signed with
First Independent Power Limited ("FIPL") to supply gas to its Eleme
and Trans Amadi power plants, bringing the total number of power
plants supplied under the contract to three, including the FIPL
Afam power plant.
In addition, Accugas Limited commenced gas deliveries to three
new customers in Nigeria, FIPL's Trans Amadi power plant,
TransAfam's power plants in Rivers State, and CHGC. Accugas Limited
now has operational GSAs with power plants comprising 24 per cent.
of Nigeria's thermal generation capacity.
5.2 Refinancing of the Accugas Term Facility
The Company is progressing towards refinancing the Accugas Term
Facility, which currently has a maturity date of 31 December 2025,
into a multi-tranche, Naira denominated borrowing structure. It is
currently anticipated that the first phase of the refinancing will
complete during the first half of 2023, although there can be no
guarantee this will occur. Once completed, this refinancing would
align the currencies of the Existing Group's principal revenue
streams with its debt service obligations and would reduce the
Existing Group's foreign exchange exposure.
5.3 Niger
The Company's current focus in Niger is the planned R3 East
early production scheme to be located at the Amdigh field and
initially commencing in 2023, subject to market conditions and
financing.
The Board believes that significant further potential exists on
its licence area in Niger with an exploration portfolio containing
a total of 146 potential exploration targets with a total Unrisked
Best Estimate of approximately 6.7 Bnbbls Oil Initially In Place.
The Board believes that this has the potential to deliver
meaningful cashflows to the Group in the future.
The key terms of the R1234 PSC remain as described in paragraph
12 of Part 14 of the December 2021 Admission Document, save that in
the first four years of the PSC, Savanah is now obliged to drill
five (as opposed to two) exploration wells to a minimum depth of
2,000 metres, with at least one exploration well on R1, R2 or R4,
as well as acquiring 250km(2) of 3D seismic.
5.4 Renewable Energy
Savannah's Renewable Energy division was established in 2021 and
during H1 2022 signed two non-binding agreements for the
development of a total of up to 750MW large-scale greenfield solar
and wind projects with the governments of Chad and Niger. The
agreement signed in Chad covers two projects. The first comprises
an up to 300 MW photovoltaic solar farm and battery energy storage
system located in Komé, Southern Chad (the "Centrale Solaire de
Komé"). This project is being developed to provide clean, reliable
power generation for the Doba Oil Project and the surrounding towns
of Moundou and Doba. The second involves the development of solar
and wind projects of up to 100 MW each to supply power to the
country's capital city, N'Djamena (the "Centrales d'Energie
Renouvelable de N'Djamena"). The Centrale Solaire de Komé project
would represent the largest solar plant in sub-Saharan Africa
(excluding South Africa) and potentially the largest battery
storage project on the continent. The Centrales d'Energie
Renouvelable de N'Djamena would more than double the existing
installed generation capacity supplying the capital city and
increase the total installed on-grid power generation capacity in
Chad by up to an estimated 63 per cent.
In Niger, an agreement was signed by Savannah with the Ministry
of Petroleum, Energy and Renewable Energies of the Republic of
Niger for the construction and operation of the country's first
wind farm, with a proposed installed power generation capacity of
up to 250 MW on an independent power producer basis in the Tahoua
Region of Southern Niger. This is targeted to increase the
country's on-grid electricity supply by up to 40 per cent.
Sanctioning of this project is targeted for 2023 with first wind
power expected to commence in 2025. These projects represent
potentially substantial foreign direct investments that would make
significant contributions to the economic development of the
regions where they will be situated.
6 Summary Financial Information of the Exxon Target Companies
6.1 Exxon Target Companies
The summary financial information presented below is an extract
of the historical financial information of Exxon Target Companies
as set out in Part 3 of the Document. The summary financial
information for the six months ended 30 June 2022 and the year
ended 31 December 2021 has been derived from Exxon Target
Companies' Financial Information.
Figure 1, Summary Financial Information of the Exxon Target
Companies
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME SELECTED LINE
ITEMS
Six months ended Year ended 30 June 31 December
2022 2021
US$'000 US$'000
Revenue 95,686 192,705
Operating loss (14,816) (6,570)
Loss before tax (16,970) (13,143)
Loss after tax (13,032) (113,651)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION SELECTED LINE
ITEMS
Total assets 820,568 782,740
Total liabilities 598,783 547,923
Net assets 221,785 234,817
CONSOLIDATED CASH FLOW STATEMENT SELECTED LINE
ITEMS
Cash (used in)/generated from operating activities (121,647) 104,105
Cash provided by investing activities 40,680 25,534
Cash generated from/(used in) financing activities 75,356 (129,667)
Net cash outflow (5,611) (28)
6.2 Summary Financial Information of the Existing Group
The summary financial information presented below is an extract
without material adjustment from the audited consolidated financial
statements for the Existing Group for the year ended 31 December
2021 and the unaudited interim financial information for the six
months ended 30 June 2022.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME SELECTED LINE
ITEMS
Six months ended
Year ended
30 June 31
December
2022 2021
US$'000 US$'000
Revenue 85,847 185,799
Operating profit 27,854 87,713
(Loss) before tax (11,314) (7,745)
(Loss)/profit after tax (20,545) 17,103
CONSOLIDATED STATEMENT OF FINANCIAL POSITION SELECTED
LINE ITEMS
Total assets 1,341,760 1,348,587
Total liabilities 1,047,308 1,041,849
Net assets 294,452 306,738
CONSOLIDATED CASH FLOW STATEMENT SELECTED
LINE ITEMS
Cash generated from operating activities 41,884 128,115
Cash used in investing activities (61,526) (123,237)
Cash from/(used in) financing activities 18,194 (25,159)
Net cash (outflow)/inflow (1,448) (20,281)
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END
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