A compelling investment opportunity
Savannah has three high-quality, high-growth business units in Cameroon, Niger and Nigeria. Our Nigerian assets’ future contracted revenues are derived from fixed price, long-term gas sales agreements with a weighted average remaining contract life of 15 years and US$3.8 billion of remaining life-of-contract revenues1. Over 90% of our current contracted revenues are with customers providing investment grade credit guarantees2.
Highlight
Total Revenues3 up by 26% year-on-year to US$290.4 million in 2022.
Delivered gas to eight customers in 2022.
1 Remaining life of contact revenues estimated on a maintenance adjusted take-or-pay basis including contributions from three
of our customers: Calabar Generation Company Limited (owner of the Calabar power station), Ibom Power Company Limited
(owner of the Ibom power station) and the Lafarge Africa PLC (owner of the Lafarge Mfamosing cement plant). Note this is
not an audited number.
2 Investment grade indicates credit support from an entity which holds an investment grade rating from either Standard & Poor’s, Moody’s or Fitch Ratings.
3 Total Revenues are defined as the total amount of invoiced sales during the period. This number is seen by management as
appropriately reflecting the underlying cash generation capacity of the business as opposed to Revenue recognised in the
Consolidated Statement of Comprehensive Income. A detailed explanation of the impact of IFRS 15 revenue recognition rules
on our Consolidated Statement of Comprehensive Income is provided in our 2020 Annual Report in the Financial Review
section on page 56. Note that Total Revenues is not an audited number.
(a) Total Revenues are defined as the total amount of invoiced sales during the period. This number is seen by management as
appropriately reflecting the underlying cash generation capacity of the business as opposed to Revenue recognised in the
Consolidated Statement of Comprehensive Income. A detailed explanation of the impact of IFRS 15 revenue recognition rules
on our Consolidated Statement of Comprehensive Income is provided in our 2020 Annual Report in the Financial Review
section on page 56. Note that Total Revenues is not an audited number.
Savannah has a strong and proven track record of delivering value in a safe and sustainable manner. We benefit from a strong and functionally arranged operating platform, a purposeful performance driven culture and highly experienced Board and senior
management team.
We have a strong track record of delivering our capital projects on time and budget, of delivering post-acquisition asset performance enhancements and of exploration excellence.
Highlights
- Adjusted EBITDA(c) up by 27% compared to 2021.
- Five discoveries from the five exploration wells drilled to date in Niger demonstrates our subsurface expertise.
Savannah beats financial cost guidance
1 Adjusted EBITDA is calculated as profit or loss before finance costs, investment revenue, foreign exchange gains or loss, expected credit loss and other related adjustments, fair value adjustments, gain on acquisition, taxes, transaction costs, 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
2 Over the last three years since Savannah’s announcement of the acquisition of the Nigerian assets
3 Group Operating expenses plus administrative expenses are defined as total cost of sales, administrative and other operating expenses excluding royalty and depletion, depreciation and amortisation
We seek to deliver energy projects in Africa which make meaningful positive socio-economic contributions to our host countries. We strive to manage all of our operations in a safe, secure and environmentally sustainable manner. Our carbon intensity, diversity and local content performance and metrics are industry leading. Our sustainability strategy is focused on four key pillars which are aligned with 13 of the United Nations Sustainable Development Goals (“UN SDGs”).
Highlights
- In Nigeria, Savannah is currently supplying gas to enable over approximately 20% of Nigeria’s thermal power generation.
- Our Total Contributions(1) to our host countries since 2014 were US$624 million.
- In 2022 we delivered 26 social impact projects positively impacting 26 of our local communities.
1 Total contributions to Nigeria and Niger defined as payments to governments, employee salaries and payments to local suppliers and contractors. Where total contributions refer to the period 2014–2020 they include contributions to Nigeria during the period pre-acquisition of the Nigerian assets by Savannah
In the hydrocarbon space we see organic growth potential in each of our existing countries of operation. In Nigeria, we expect to deliver significant organic growth through the potential redevelopment of the Stubb Creek Field, the sale of third party gas through our Accugas pipeline network and potentially further new gas sales agreements with existing and new customers. In Niger, we expect to progress our R3 East development with plans to tie it directly into the new Niger Benin pipeline due to be completed in 2023. We also have significant additional longer-term growth potential associated with 146 exploration targets within our licence area.
In the renewable energy space we are focused on identifying new large-scale greenfield power projects in our core African region. We believe the market opportunity in this area is likely to be c. 242 GW by 20301 and are confident in reaching our target of up to 1 GW+ of renewable energy projects in motion by end 2023.
Highlights
- Four new gas sales agreements in 2022 and contract extension agreed with First Independent Power Limited.
- Up to 676 MW of renewable energy projects announced.
We continue to actively review new acquisition opportunities focused predominantly on: cash-generative, or near-term cash-generative, upstream and midstream assets; and/or “bolt-on” assets for which there is significant synergistic value to our existing operations. In the case of the former, typically larger opportunities, our focus is upon those that: are being offered by vendors which are divesting assets for “strategic” reasons; and would be unit value per share accretive to Savannah. We see significant value creation potential in such deals, with the performance improvements we have delivered in our Nigerian assets post-acquisition a prime example of how this can be achieved.
Highlights
- Announcement of the proposed acquisition of the South Sudan Assets(m) in December 2022.
m South Sudan Assets means the assets that Savannah proposes to acquire from PETRONAS International Corporation Ltd,
as announced on 12 December 2022. These assets comprise interests in three Joint Operating Companies which operate
Block 3/7 (40% working interest (“WI”)), Block 1/2/4 (30% WI) and Block 5A (67.9% WI), in South Sudan.