RNS Number : 4463E
Savannah Energy Plc
22 October 2025
22 October 2025
Savannah Energy PLC
("Savannah" or "the Company")
Publication of 2025 Half-Year Results and Restoration to Trading
Profit Before Tax more than doubles to US$101.5 million
Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter, is pleased to announce the publication of its unaudited half-year results for the six months ended 30 June 2025. The results will shortly be available on the Company's website.
Following the publication of the 2024 Annual Report earlier today, and these 2025 Half-Year Results, trading in the Company's ordinary shares on the AIM market is expected to be restored on the AIM market at 7.30 a.m. on Thursday 23 October 2025.
H1 2025 Highlights
· Completion of the SIPEC Acquisition in March 2025, increasing our reserve and resource base by approximately 47 MMboe (29%) from 160 MMboe to 207 MMboe1. Following completion of the SIPEC Acquisition, we commenced an up to 18-month expansion programme designed to increase Stubb Creek production from the 2.7 Kbopd average 2024 level to as much as 4.7 Kbopd;
· SIPEC Acquisition delivered over US$8 million of free cashflow in the c. 16 week period post-completion;
· 29% increase in Stubb Creek Gross 2P Reserves and 21% increase in Uquo Gross 2P Reserves2;
· Average gross daily production of 21.6 Kboepd (FY 2024: 23.1 Kboepd)3;
· Progressed investment in capital projects:
o Safely achieved completion and full commissioning of the compression project at the Uquo Central Processing Facility ("CPF"), approximately 10% below the original US$45 million budget, post-period end; and
o Advanced preparations for a planned up to two-well drilling campaign on the Uquo Field in 2026 with long-lead items procurement process progressed in the period.
· Stable financial performance reported in the period:
o Total Revenues4 of US$127.1million, up 2.8% (H1 2024: US$123.6 million);
o Cash collections of US$147.2 million, in line with the prior year period (H1 2024: US$148.6 million);
o Profit before tax of US$101.5 million, up 54% (H1 2024: US$47.2 million);
o Adjusted EBITDA5 of US$72.9 million (H1 2024:US$91.6 million);
o Leverage6 ratio reduced to 3.1x (31 December 2024: 3.5x); and
o Trade Receivables balance reduced by 2.1% to US$527.7 million (31 December 2024: US$538.9 million).
· As at 30 June 2025, cash balances were over 50% higher than year-end at US$50.4 million (31 December 2024: US$32.6 million) and net debt was lower at US$628.7 million (31 December 2024: US$636.9 million). The debt associated with the SIPEC Acquisition was drawn in the period and, for comparison purposes if excluded, underlying net debt as at 30 June 2025 was over 7% lower at US$590.9 million. Only 6% of outstanding debt as at 30 June 2025 was recourse to the Company, with the balance sitting with subsidiary companies on a non-recourse basis;
· Completion of an equity issuance in March 2025, raising in aggregate, gross proceeds of approximately £30.6 million and the signing of a US$200 million acquisition debt facility providing access to potential funding for future hydrocarbon asset acquisitions;
· Final documentation was agreed in respect of an increase in the Accugas Naira-denominated debt facility from NGN340 billion (approximately US$222 million) to up to approximately NGN772 billion (approximately US$500 million) (the "Transitional Facility"). Agreements were signed post-period end, with the expectation that the upsized facility will be utilised to enable the remaining outstanding balance of the Accugas US$ Facility to be repaid by end 2025;
· Subject to a satisfactory agreement being reached with the Government of Niger, a subsidiary is considering commencing a four-well testing programme and/or a return to exploration activity in the R1234 PSC contract area in 2026/27; and
· Continued to progress our portfolio of large-scale wind, solar and hydroelectric projects, together with the announcement of plans to reposition our Power Division business model, expanding its remit to include potential thermal as well as potential renewable energy projects.
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
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
Hydrocarbons Division
Average gross daily production was 21.6 Kboepd for H1 2025 (FY 2024: 23.1 Kboepd), of which 86% was gas (FY 2024: 88%)3. As previously announced, we expect gas volumes to be lower in 2025 than prior year, given the significant ongoing operation work during 2025 (including completion of compression, site and logistical preparations for upcoming material drilling activity and other ongoing field activities), together with anticipated levels of customer demand. Production in the first half was in line with expectations.
On 10 March 2025, we announced the completion of the SIPEC Acquisition. Following completion, we commenced a planned production expansion programme that has already increased current Stubb Creek gross daily production to 3.3 Kbopd, approximately 24% above the 2024 average. The full programme, expected to take up to 18 months, is anticipated to raise gross production to as much as 4.7 Kbopd. In parallel, we are evaluating an alternative, lower capex option that could deliver a faster production ramp up, with plateau production sustained for a longer period at a slightly lower rate than under the original expansion programme.
As announced on 19 May 2025, the Company appointed McDaniel & Associates Consultants Ltd ("McDaniel") to prepare an updated CPR for the oil and gas assets of the Group which confirmed a 29% increase in Stubb Creek Gross 2P Reserves and a 21% increase in Uquo Gross 2P Reserves as set out in the table below. The reduced range between the 1P and 3P Reserves demonstrates the increased certainty in the Reserves estimates and is a reflection of the maturity of an asset that has now been on production for over 10 years:
Summary Comparison of Nigeria Gross Reserves
Uquo Field Summary of Gross Gas Reserves (Bscf)
1P
2P
3P
CPR, March 2024*
233.5
400.5
493.6
McDaniel, March 2025
320.2
484.9
544.8
Changes (%)
37%
21%
10%
*Prepared by CGG Services (UK) Ltd
Stubb Creek Field Summary of Gross Oil Reserves (MMstb)
1P
2P
3P
CPR, March 2024*
3.3
10.7
20.4
McDaniel, March 2025
9.7
13.8
18.1
Changes (%)
194%
29%
-11%
* Prepared by CGG Services (UK) Ltd
Nigeria Gross 2P Reserves and 2C Resources
CGG, 2024*
McDaniel, 2025
Changes (%)
Uquo 2P Gas
Bscf
400.5
484.9
21%
Uquo 2P Condensate
MMstb
0.6
0.7
21%
Uquo 2C Gas
Bscf
82.8
55.1
-33%
Stubb Creek 2P Oil
MMstb
10.7
13.8
29%
Stubb Creek 2C Gas
Bscf
515.3
513.1
0%
Nigeria 2P+2C
MMboe
177.7
190.0
7%
*Prepared by CGG Services (UK) Ltd
During the first half of the year, we continued to progress the compression project at the Uquo CPF (with completion and full commissioning achieved early in H2 2025). The project was completed safely and approximately 10% below the original US$45 million budget and it is expected that the project will allow us to maximise the production from our existing and future gas wells.
During the period, we advanced preparations for a two-well drilling campaign on the Uquo Field, commencing the procurement process of long lead equipment in Nigeria. The Uquo NE development well ("Uquo NE"), due to commence drilling in January 2026, is forecast to provide gas volumes of up to 80 MMscfpd, while an additional exploration well in the Uquo Field ("Uquo South") is expected to be drilled back-to-back with the Uquo NE well. Uquo South is targeting an Unrisked Gross gas initially in place of 131 Bscf of incremental gas resources.
During the period, we also continued to seek to progress the 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, subject to satisfactory stakeholder agreements being entered into.
Power Division
During the first half of 2025, we continued to progress our portfolio of large-scale wind, solar and hydroelectric development projects, with our principal focus projects being on the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon.
Our Parc Eolien de la Tarka project made significant progress, with the Minister of Energy confirming that the project is on the Government's list of priority projects. We continued to progress the additional Environmental and Social Impact Assessment ("ESIA") field work studies required for the full ESIA, which we expect to complete and submit to the relevant authorities in early 2026. The Company is negotiating outline terms in relation to the project's proposed power purchase agreement and continues to work on the project in close collaboration with the International Finance Corporation (World Bank) and the US International Development Finance Corporation.
Negotiations with the Government of Cameroon continued regarding a Joint Development Agreement for the up to 95 MW Bini a Warak project. This is expected to replace the Memorandum of Agreement signed in April 2023 and secure the terms under which Savannah will collaborate with the Government of Cameroon to further develop the project.
As previously announced, we continued to work on repositioning our Power business model, including the expansion of the Power Division to include both renewable as well as potential thermal energy projects.
Financial Review
The table below provides an overview of results for H1 2025 with a comparison for H1 2024:
Key Financial Highlights
Six months ended 30 June 2025
Six months ended 30 June 2024
Total Revenues4, US$ million
US$127.1 million
US$123.6 million
Profit before tax, US$ million
US$101.5 million
US$47.2 million
Adjusted EBITDA5, US$ million
US$72.9 million
US$91.6 million
Cash collections
US$147.2 million
US$148.6 million
Total Revenues4 were higher in the period at US$127.1 million (H1 2024: US$123.6 million). As anticipated, Other operating income was materially lower in the period at US$5.9 million (H1 2024: US$109.9 million) - this relates principally to the re-billing of foreign exchange losses incurred by Accugas and given the relative exchange rate stability seen in Nigeria in the period, combined with the greater proportion of debt now denominated in Naira, there was only minimal level of losses seen which were rebilled to customers.
Profit before tax was materially higher at US$101.5m (H1 2024: US$47.2 million) which reflects the impact of the SIPEC Acquisition in the period.
Adjusted EBITDA5 was US$72.9 million (H1 2024: US$91.6 million), with this decrease largely due to an increase in cost of sales due to certain non-recurring items as discussed below. Excluding these one-off costs would show a comparable Adjusted EBITDA5 of US$84.2 million.
Cash collections were stable compared to the prior year at US$147.2 million (H1 2024: US$148.6 million) and increasing the rate of cash collections remains a focus for the Company this year.
SIPEC Acquisition
The impact of the completion of the SIPEC Acquisition mid-way through the period is reflected in the financial statements. The positive effects of the transaction are already being seen with over US$8 million of free cashflow generated between acquisition date and 30 June 2025 and . The outstanding debt under the reserve-based lending ("RBL") facility has also reduced from US$60 million on acquisition to US$40 million as at 30 June 2025. The RBL remains fully available with current borrowing base capacity exceeding the US$60 million facility limit.
The acquisition has been accounted for using the acquisition method and the Group applied the requirements for a business combination achieved in stages by remeasuring its previously held interest in the joint operation through Universal Energy Resources Limited. This has resulted in the Group recognising a provisional gain on acquisition of a subsidiary of US$127.4m and a gain on remeasurement of a previously held interest of US$23.3m in the period. Further details are provided in Note 19.
Revenue
Revenue during the period of US$126.0 million (H1 2024: US$114.8 million) was 10% higher than 2024. This was driven by additional revenue earned from the Stubb Creek oil field following the SIPEC Acquisition and an increase in liquids production, partially offset by a reduction in gas production.
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. Total Revenues4 of US$127.1 million (H1 2024: US$123.6 million) include 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 Revenues4.
Cost of Sales, Administrative and Other Operating Expenses
Cost of sales increased in the six months to US$58.3 million (H1 2024: US$34.6 million). The increase includes two non-recurring items - firstly there have been various accounting entries required post-acquisition of SIPEC to transition to Savannah accounting policies which resulted in a one-off charge of US$3.8 million related to recording of inventory balances. The other one-off expenditure related to costs incurred in pipeline maintenance and tariff fees associated with rerouting of produced gas, totalling approximately US$7.5million. (This continued into the early part of the current quarter with total costs related to this of US$13.5 million anticipated for the full year). Excluding these one-off costs, the cost of sales would have been US$47.0 million. The remaining increase in cost of sales is largely due to the SIPEC Acquisition, including depletion related to the fair value uplift (as discussed below), increased royalties from higher oil production and costs related to SIPEC operations - in total these are approximately US$10.0 million. For comparison, excluding the SIPEC Acquisition and non-recurring costs, the cost of sales would have been broadly unchanged in the period (approximately $36 million vs $34.6 million in H1 2024).
Administrative and other operating expenses for the period were well contained despite the high inflationary environment in Nigeria at US$18.4 million (H1 2024: US$17.3 million, excluding a one-off rebate in that period), with the majority of the increase resulting from costs associated with the newly acquired SIPEC subsidiary.
Transaction and other related expenses of US$21.4 million (H1 2024: US$8.9 million) primarily relate to legal expenses with respect to the ongoing arbitration processes, SIPEC Acquisition related transaction costs and activity associated with other potential acquisitions.
Finance Costs
In H1 2024, there was a one-off release of a legacy non-cash related finance cost of US$9.6 million. Excluding this non-recurring amount, on a comparable basis the finance costs increased from US$48.8 million to US$69.5 million. This increase is a result of greater utilisation of the Transitional Facility which carries a higher average interest rate than the Accugas US$ Facility. The average interest rate has increased in the period from 14.3% to 18.4%.
Foreign Exchange Loss
Foreign exchange losses were materially lower in the period at US$4.9 million (H1 2024: US$67.6 million). This is a result of the broadly stable exchange rate between Naira and US$ throughout the period.
Of the total, US$3.7 million (H1 2024: US$49.9 million) are unrealised losses, mainly due to movements in Naira monetary assets and liabilities, specifically Naira cash balances. Realised losses accounted for remainder at US$1.2 million (H1 2024: US$17.7 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 2025 these amounted to US$5.6 million (H1 2024: US$109.9 million).
Cash Flow
Net cashflow from operating activities increased by 10% to US$82.2 million (H1 2024: US$74.5 million).
Capital and exploration expenditure for the period amounted to US$8.6 million (H1 2024: US$13.9 million), the majority of which related to the Uquo compression project. The other principal use of cash in period was towards debt repayments and finance costs amounting to a combined US$99.5 million (H1 2024: US$106.8 million).
Cash balances at 30 June 2025 were US$50.4 million (31 December 2024: US$32.6 million).
Debt
Net debt at 30 June 2025 was US$628.7 million, a decrease of 1.3% from the year-end position (31 December 2024: US$636.9 million). Gross debt rose by US$9.0 million to US$679.1 million (31 December 2024: US$669.5 million). The increase in gross debt was a result of the SIPEC Acquisition completing during the period and the utilisation of the acquisition related debt facility. On a like-for-like basis (without taking into account the SIPEC Acquisition related debt), gross debt fell by 4.2% compared to year-end position.
Leverage (which takes into account a pro-forma 12-month EBITDA for SIPEC) has reduced in the period to 3.1x (31 December 2024: 3.5x).
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$142.4 million (31 December 2024: US$134.6 million) which accounts for over 20% of the total debt within the Group - 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$4.3 million, with all other borrowings on a non-recourse basis.
In H1 2025, Accugas entered into the Transitional Facility. This facility was fully utilised earlier this year with the resulting funds converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility. There was a remaining principal balance under the US$ Facility as at 30 June 2025 of approximately US$199.9 million. An increase in the Transitional Facility was signed in Q3 2025, increasing total commitments to up to NGN772 billion. This increased facility will enable the remaining outstanding US$ balance to be converted into Naira, with the expectation this will allow the remainder of the Accugas US$ Facility to be fully repaid by end 2025. This process, when complete, will align Accugas' debt facility with the currency in which gas revenues are received.
The Company has in place a rolling hedging programme for Stubb Creek oil with 480,000 barrels hedged for the next 12 months at an average floor price of $58.75/bbl.
Going Concern
The results have been presented on a going concern basis. Details of the Group's assessment of going concern for the period can be found in Note 2.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2025
Six months ended 30 June 2025 US$'000
Six months ended 30 June 2024 US$'000
Note
Unaudited
Unaudited
Revenue
4a
126,024
114,788
Cost of sales
5
(58,278)
(34,639)
Gross profit
67,746
80,149
Other operating income
4b
5,887
109,930
Administrative and other operating expenses
(18,406)
(15,960)
Transaction and other related expenses
6
(21,368)
(8,914)
Expected credit loss and other related adjustments
12
(11,525)
(12,944)
Operating profit
6
22,334
152,261
Gain on acquisition of a subsidiary
19
127,422
-
Gain on remeasurement of a previously held interest
19
23,264
-
Finance income
3,636
1,815
Finance costs
7
(69,524)
(39,271)
Fair valuethrough profit or loss
(731)
-
Foreign exchange loss
8
(4,894)
(67,592)
Profit beforetax
101,507
47,213
Current tax expense
9
(10,462)
(15,198)
Deferred tax credit/(expense)
9
9,907
(11,662)
Total tax expense
9
(556)
(26,860)
Profit after tax
100,951
20,353
Profit after tax and Total comprehensive income
100,951
20,353
Totalcomprehensive profit/(loss)attributableto:
Owners of theCompany
102,472
16,268
Non-controllinginterests
(1,521)
4,085
100,951
20,353
US cents
US cents
Earnings per share
Basic
10
7.12
1.31
Diluted
10
6.87
1.25
Condensed consolidated statement of financial position
as at 30 June 2025
30 June 2025
31 December 2024
US$'000
US$'000
Note
Unaudited
Audited
Assets
Non-current assets
Property, plant and equipment
11
606,842
457,453
Intangible assets
177,136
176,427
Financial investment
139,459
139,459
Deferred tax assets
299,812
271,737
Right-of-use assets
2,869
3,418
Restricted cash
3,026
29
Other non-current receivables
14,442
17,334
Total non-current assets
1,243,586
1,065,857
Current assets
Inventory
7,886
5,078
Trade and other receivables
12
466,325
470,047
Cash at bank
13
50,388
32,585
Total current assets
524,599
507,710
Total assets
1,768,185
1,573,567
Equity and liabilities
Capital and reserves
Share capital
2,212
1,836
Share premium
152,510
126,824
Treasury shares
(91)
(97)
Other reserves
525
531
Share-based payment reserve
18,245
17,261
Retained earnings
244,072
141,600
Equity attributable to owners of the Company
417,473
287,955
Non-controlling interests
26,543
28,064
Total equity
444,016
316,019
Non-current liabilities
Other payables
14
2,844
1,671
Borrowings
15
406,728
370,229
Lease liabilities
2,884
2,213
Provisions
53,473
49,384
Contract liabilities
16
389,503
382,640
Total non-current liabilities
855,432
806,137
Current liabilities
Trade and other payables
14
117,011
80,147
Borrowings
15
272,371
299,299
Interest payable
17
26,391
27,248
Tax liabilities
35,289
24,276
Lease liabilities
1,433
1,777
Contract liabilities
16
16,241
18,664
Total current liabilities
468,737
451,411
Total liabilities
1,324,169
1,257,548
Total equity and liabilities
1,768,185
1,573,567
Condensed consolidated statement of cash flows
for the six months ended 30 June 2025
Six months ended 30 June 2025
Six months ended 30 June 2024
US$'000
US$'000
Note
Unaudited
Unaudited
Cash flows from operating activities:
Profit before tax
101,507
47,213
Adjustments for:
Depreciation
1,780
1,474
Depletion
19,393
16,126
Gain on acquisition of a subsidiary
(127,422)
-
Gain on remeasurement of a previously held interest
(23,264)
-
Finance income
(3,606)
(1,598)
Finance costs
7
69,425
39,271
Fair value through profit or loss
731
-
Unrealised foreign exchange loss
8
3,702
49,875
Share-based payments
984
1,015
Current service cost
107
-
Other expenses
(56)
-
Expected credit loss and other related adjustments
12
11,525
12,944
Operating cash flows before movements in working capital
54,806
166,320
Increase in inventory
3,649
(5)
Decrease/(increase) in trade and other receivables
7,259
(94,597)
Increase/(decrease) in trade and other payables
20,806
(1,604)
Increase in contract liabilities
1,115
8,780
Benefits paid
(121)
-
Income tax paid
(5,270)
(4,401)
Net cash generated from operating activities
82,244
74,493
Cash flows from investing activities:
Interest received
692
134
Payments for property, plant and equipment
(8,381)
(9,729)
Payments for exploration and evaluation assets
(239)
(4,179)
Return of deposit related to proposed acquisition
-
10,000
Cash acquired on acquisition of subsidiary
16,844
-
Cash paid for acquisition of subsidiary
(35,384)
-
Loans and advances - receipts
3,370
782
Loans and advances - payments
(1,709)
(7,351)
Cash transferred from debt service accounts
5,033
57,180
Cash transferred to restricted cash accounts
(2,998)
-
Lessor receipts
-
223
Net cash (used in)/generated from investing activities
(22,772)
47,060
Cash flows from financing activities:
Finance costs
(57,794)
(59,576)
Borrowing proceeds
17
65,193
39,018
Borrowing repayments
17
(41,705)
(47,236)
Lease payments
17
(332)
(467)
Net cash used in from financing activities
(34,638)
(68,261)
Net increase in cash and cash equivalents
24,834
53,292
Effect of exchange rate changes on cash and cash equivalents
(2,033)
(60,172)
Cash and cash equivalents at beginning of period
26,323
48,134
Cash and cash equivalents at end of period
13
49,124
41,254
Amounts held for debt service at end of period
13
1,264
1,627
Cash at bank at end of period
13
50,388
42,881
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2025
Share capital
Share premium
Treasury shares
Other reserves
Share-based payment reserve
Retained earnings
Equity attributable to the owners of the Company
Non-controlling interest
Total equity
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance at 1 January 2025 (audited)
1,836
126,824
(97)
531
17,261
141,600
287,955
28,064
316,019
Profit/(loss) after tax and Total comprehensive income
-
-
-
-
-
102,472
102,472
(1,521)
100,951
Total comprehensive income
-
-
-
-
-
102,472
102,472
(1,521)
100,951
Transactions with shareholders:
Issued shares, net of costs
376
25,686
6
(6)
-
-
26,062
-
26,062
Equity-settled share-based payments
-
-
-
-
984
-
984
-
984
Balance at 30 June 2025 (unaudited)
2,212
152,510
(91)
525
18,245
244,072
417,473
26,543
444,016
Share capital
Share premium
Treasury shares
Other reserves
Share-based payment reserve
Retained earnings
Equity attributable to the owners of the Company
Non-controlling interest
Total equity
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance at 1 January 2024 (audited)
1,836
126,824
(136)
531
14,717
110,726
254,498
9,259
263,757
Profit after tax and Total comprehensive income
-
-
-
-
-
16,268
16,268
4,085
20,353
Total comprehensive income
-
-
-
-
-
16,268
16,268
4,085
20,353
Equity-settled share-based payments
-
-
-
-
1,015
-
1,015
-
1,015
Balance at 30 June 2024 (unaudited)
1,836
126,824
(136)
531
15,732
126,994
271,781
13,344
285,125
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 2025 were approved and authorised for issuance by the board of directors on
22 October 2025.
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 2024 Annual Report and Accounts, for the year ended 31 December 2024 ("the Group's 2024 Annual Report"). The financial information for the six months ended 30 June 2025 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 2024 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 2024 Annual Report contained a disclaimer of opinion, 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 2024 will be 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 2024 Annual Report. There are no other new or amended standards or interpretations adopted from 1 January 2025 that have a significant impact on the interim financial information.
As disclosed in the Group's 2024 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 2024; and (ii) for the unaudited condensed consolidated interim financial statements for the six months ended 30 June 2025.
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. For both the six months ended 30 June 2025 and 30 June 2024, no 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 2025 - more details of this financial investment are set out in the Group's 2024 Annual Report.
Going concern
The Directors have considered the factors relevant to support a statement of going concern; in assessing the going concern assumption the Directors have reviewed the Group's forecasted cash flows as well as the funding requirements of the Group from the date of the approval of these financial statements to 31 October 2026. As in previous periods, this forecast was prepared on a "bottom-up" basis, at each major asset and corporate level, and it reflects the Group's best estimate of costs and revenues for the going concern period. The capital expenditure and operating costs used in this forecast are based on the Group's corporate budget which includes operating budgets for each of the operating subsidiaries and an estimate of the corporate general and administrative costs for the going concern period.
The base case model assumes that Cash Collections from the Group's gas customers in Nigeria are received on a regular basis along with an unwind of historic receivables in line with both key long-term supply contracts with committed volumes and short-term supply contracts and only assumes that current customers are supplied. Forecast cash inflows generated from liquids production at the Stubb Creek and Uquo fields are based on in-house production forecasts in line with the Competent Person Report.
As part of its analysis in making the going concern assumption, the Directors have considered the range of risks facing the business on an ongoing basis, as set out in the Risk management section of this Annual Report. In addition, the other principal assumptions made in relation to our base case going concern assessment relate to the regular payments of gas invoices by customers, the forecast commodity price environment and continued access to FX markets (specifically in relation to the financing of US Dollar denominated costs and the refinancing of the remaining balance of the Accugas US$ Facility). Notwithstanding the risks across the Group, both the base case forecasts and sensitised scenarios confirm that the Directors believe that the Group and each subsidiary company has sufficient liquidity to continue as a going concern for at least a 12-month period from the date of the approval of this report.
Looking at a selection of the principal risks:
Payment of invoices from a concentrated customer base
The Group continues to have a relatively concentrated customer base which results in an inherent reliance risk on a small number of customers. As previously outlined, the Group continues to focus on diversifying the customer base to reduce this concentration. The risk associated with Nigerian-based gas customers is mitigated through the external credit support covering the off take contracts at Accugas where we have a Partial Risk Guarantee in place via the World Bank to provide credit support for Accugas' principal customer for up to approximately US$112 million of invoices and for other customers, letters of credit are normally required.
The Group continues to seek to diversify its revenue stream and following the acquisition of the additional interest in the Stubb Creek, this continues to further enhance the US Dollar cash revenue generating capacity of the Group.
Commodity price/foreign exchange environment
The Group operates in the energy sector and is therefore exposed to fluctuations in commodity prices. Brent oil prices traded at an average of US$82.0/bbl in 2023, US$81.0/bbl in 2024 and US$69.7/bbl between January 2025 and September 2025. Due to the market volatility experienced in 2025 year to date, Management has adopted an oil price of US$65.0/bbl for the going concern period. The Group's gas sales contracts are at fixed prices without any correlation to crude, with long-term supply contracts subject to inflation price adjustments.
Commodities remain volatile and can fluctuate based on a wide range of factors. Following the increase in the Group's interest in the Stubb Creek field a rolling, options-based hedging programme has commenced to provide protection against oil price fluctuations.
Following the proactive actions of the Nigerian Government, Nigerian Naira ("NGN") devalued significantly at the start of 2024, from an exchange rate against the US$ of NGN859 to approximately NGN1,544 at year end (with an average of NGN1,478 during the year). The Naira is now more aligned to a market driven rate and overall, this has had a positive impact on the Group's cash flows. The Group continues to invoice its customers in US Dollars and, while they have the option to pay in either US Dollars or NGN, any NGN payments are at prevailing market rates ensuring US Dollar equivalent receipts remain consistent. NGN denominated costs are more favourable on a US Dollar equivalent basis, providing cash flow benefits to the Group throughout the going concern period.
Debt financing
Accugas has in place a Naira denominated loan facility with a consortium of Nigerian lenders (the "Transitional Facility"), which has been utilised to partially refinance the Accugas US$ Facility. The Transitional Facility was increased in September 2025 to up to NGN773 billion, and this increased facility will allow Accugas to convert and repay the remainder of the Accugas US$ Facility prior to its maturity date at the end of 2025.
The limit of the increased Transitional Facility was calculated based on an exchange rate of greater than 30% above the current market rates. Accugas is confident therefore that the Transitional Facility will be sufficient to fully repay the Accugas US$ Facility, However, repayment of the Accugas US$ Facility and utilisation of the Transitional Facility continue to require access to appropriately priced US Dollars. If the expanded Transitional Facility is not sufficient to fully repay the Accugas US$ Facility, an amount would remain outstanding which is required to be repaid by the final maturity date of the Accugas US$ Facility (31 December 2025). The base case model shows that sufficient cash flows are available to service any remaining balance under the Accugas US$ Facility. The Group also has other maturing debt facilities during H2 2025 and the base case model shows that sufficient cash flows are available to service these maturing obligations. In Nigeria, the Group continues to access US Dollars as required to pay its non-Naira denominated expenditures. The Directors remain confident that this will continue and that the Group will be able to access US Dollars and other currencies as required to maintain its operational funding needs.
The maturity date of the term loan facility entered into to fund the acquisition of the Chad and Cameroon Assets has been amended on several occasions following the Nationalisation. Most recently, in October 2025 it has been amended to provide Savannah with the option, at its sole discretion, to extend the final maturity date until January 2027 which is beyond the going concern review period.
Equity issue
In March 2025, the Company undertook an equity issuance to raise in total approximately US$41 million. Approximately US$21 million of the new money raised was used to acquire certain debt which was maturing in 2025. There is a second tranche of new shares expected to be issued in October 2025 once the Company's shares have resumed trading.
Sensitivity analysis
The Group has undertaken sensitivity analysis on the respective cash flow forecasts and considered the material risk areas for the business which could impact upon the going concern assumption. These risks included: (i) timely payment of receipts from gas customers; (ii) commodity pricing; and (iii) reduction of customer collections. In this respect, a number of sensitivities were prepared, as follows:
(i) gas customer receipts - extended the collection receipt time;
(ii) commodity price - reduced the forecast average oil price to US$60/bbl;
(iii) exclude certain customer collections; and
(iv) a combination of all the above sensitivities.
Mitigating actions were considered which could be taken by the Group to prevent a shortfall arising under any scenario and these could include:
(i) deferring or reducing costs - given its high equity ownership levels and operatorship of key assets, the Group has significant levels of control over capital and operating spend and can directly manage costs where necessary with only minimal committed capital spend;
(ii) enforcing its rights to claim payment under the credit support arrangements in place; and
(iii) raising of additional debt or equity if required - the leverage on the Nigerian assets is low and given the long-term gas sales contracts and long-life nature of the assets, the Group believes further funding could be accessed if the need arose.
Under sensitivity analysis, the operating cash flows and funding available to the Group remain sufficient at all times during the forecast period to meet obligations as required whilst still maintaining headroom.
The Directors are confident in the Group's forecast and have a reasonable expectation that the Group will continue in operational existence for the going concern assessment period and believe it is appropriate to continue to adopt 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 2025:
Nigeria
Niger
Unallocated
Total
US$'000
US$'000
US$'000
US$'000
Unaudited
Unaudited
Unaudited
Unaudited
Revenue
126,024
-
-
126,024
Cost of sales1
(58,278)
-
-
(58,278)
Gross profit
67,746
-
-
67,746
Other operating income
5,617
-
270
5,887
Administrative and other operating expenses
(4,830)
(300)
(13,276)
(18,406)
Transaction and other related expenses
-
-
(21,368)
(21,368)
Expected credit loss and other related adjustments
(11,525)
-
-
(11,525)
Operating profit/(loss)
54,608
(300)
(34,374)
22,334
Gain on acquisition of a subsidiary
127,422
Gain on remeasurement of a previously held interest
23,264
Finance income
3,636
Finance costs
(69,524)
Fair value through the profit or loss
(731)
Foreign exchange loss
(4,894)
Profit before tax
101,507
Segment depreciation, depletion and amortisation
(20,742)
(90)
(341)
(21,173)
Segment non-current assets additions2
3,510
1,665
6
5,181
1. Refer to Note 5 for items included within Cost of Sales.
2. Includes Property, plant and equipment and Exploration and evaluation assets.
The following is an analysis of the Group's results by reportable segment for the six months ended 30 June 2024:
Nigeria
Niger
Unallocated
Total
US$'000
US$'000
US$'000
US$'000
Unaudited
Unaudited
Unaudited
Unaudited
Revenue
114,788
-
-
114,788
Cost of sales1
(34,639)
-
-
(34,639)
Gross profit
80,149
-
-
80,149
Other operating income
109,930
-
-
109,930
Administrative and other operating expenses
(2,532)
(518)
(12,910)
(15,960)
Transaction and other related expenses
(1,075)
-
(7,839)
(8,914)
Expected credit loss and other related adjustments
(12,944)
-
-
(12,944)
Operating profit/(loss)
173,528
(518)
(20,749)
152,261
Finance income
1,815
Finance costs
(39,271)
Fair value through the profit or loss
-
Foreign exchange loss
(67,592)
Profit before tax
47,213
Segment depreciation, depletion and amortisation
16,128
114
1,358
17,600
Segment non-current assets additions2
6,191
2,615
114
8,920
1. Refer to Note 5 for items included within Cost of Sales.
2. Includes Third party investments, Property, plant and equipment, Exploration and evaluation assets and Right-of-use assets.
4. Revenue
(a) Revenue from contracts with customers
Set out below is the disaggregation of the Group's revenue from contracts with customers:
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Gas sales
94,798
101,759
Oil, condensate and processing sales
31,226
13,029
Revenue from contracts with customers
126,024
114,788
Gas sales represent gas deliveries made to the Group's customers under gas sale agreements. The Group sells oil and condensate at prevailing market prices.
(b) Other operating income
Other operating income consists of US$5.6 million (2024: US$109.9 million) relating 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, and income from grants amounting to US$0.2 million (2024: US$nil) with respect to renewable development projects.
5. Cost of sales
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Depletion - oil and gas, and infrastructure assets (Note 11)
19,386
16,126
Facility operation and maintenance costs
33,795
15,919
Royalties
5,097
2,594
58,278
34,639
6. Operating profit
Operating profit has been arrived at after charging:
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Staff costs
13,517
13,130
Depreciation - other assets (Note 11)
257
276
Depreciation - right-of-use assets
574
485
Amortisation of intangibles
956
713
Transaction and other related expenses1
21,368
8,914
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 acquisition of assets in Nigeria and the proposed acquisition of assets in South Sudan (in 2024).
7. Finance costs
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Interest on bank borrowings and loan notes
62,551
42,061
Amortisation of balances measured at amortised cost1
3,157
3,316
Unwinding of decommissioning discount
1,244
542
Interest expense on lease liabilities
401
85
Hedging related costs2
97
-
Bank charges and other finance costs
2,074
2,860
Reversal of prior period finance costs
-
(9,593)
69,524
39,271
1. Includes amounts due to unwinding of a discount on a long-term payable, contract liabilities (Note 16) and amortisation of debt fees.
2. Hedging related costs relate to oil hedge premiums paid and net mark-to-market (MTM) movements.
8. Foreign exchange loss
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Realised loss
1,192
17,717
Unrealised loss
3,702
49,875
4,894
67,592
Realised foreign translation loss mainly relates to the translation of Naira denominated transactions into US Dollars.
9. Taxation
The tax expense/(credit) for the Group is:
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Current tax
Adjustments in respect of prior years
-
-
Current year
10,462
15,198
10,462
15,198
Deferred tax
Adjustments in respect of prior years
1,035
1,118
Write down and reversal of previous write downs of deferred tax assets
-
-
Origination and reversal of temporary differences
10,942
10,544
(9,907)
11,662
Total tax expense for the period
556
26,860
Income tax expense is recognised based on the actual results for the period and principally arises on Nigerian profits.
The Nigeria Tax Act 2025 ("the Act") was enacted after the balance sheet date and is effective 1 January 2026.
Under this legislation, Nigerian entities with a turnover in excess of 50 billion Naira will be liable to pay a minimum effective corporate tax rate of 15% based on profits before tax, as reported in their audited financial statements, subject to certain adjustments. This will result in a supplementary tax payable should the aggregate corporate income taxes payable or paid by the company be less than 15% of the profits before tax. It is expected that further details will be issued by the Nigerian Revenue Service via Regulations. It should be noted that the Act permits such Regulations to prescribe a higher turnover threshold for this minimum effective tax rate to apply. Due to the complexities of implementation and pending the Regulations, the Group is in the process of assessing the impact of this change on its Nigerian subsidiaries.
10. Earnings 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 2025 and 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 68,964,585 (30 June 2024: 68,964,585).
2025
2024
Unaudited
Unaudited
Six months ended 30 June
US$'000
US$'000
Profit after tax
100,951
20,353
Profit after tax attributable to owners of the Company1
102,472
16,268
(Loss)/profit after tax attributable to non-controlling interests
(1,521)
4,085
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
1,438,846,934
1,243,229,960
Add: employee share options
52,626,132
56,344,675
Diluted weighted average number of shares
1,491,473,066
1,299,574,635
US cents
US cents
Earnings per share
Basic profit per share
7.12
1.31
Diluted profit per share
6.87
1.25
23,450,849 options granted under employee share option schemes and 101,113,992 warrants issued are not included in the calculation of diluted earnings per share because they are anti-dilutive for the six months ended 30 June 2025 (30 June 2024: 23,853,457 and 101,113,992 warrants). These options could potentially dilute basic earnings per share in the future. The basic weighted average number of shares used in 2024 has been recalculated and has decreased the previously reported EPS.
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 2024 (audited)
193,625
430,166
5,218
629,009
Additions
13
14,368
808
15,189
Disposals
-
-
(743)
(743)
Decommissioning remeasurement adjustment
1,910
(3,228)
-
(1,318)
Balance at 31 December 2024 (audited)
195,548
441,306
5,283
642,137
Assets recognised on acquisition of a subsidiary (Note 19)
165,363
-
112
165,475
Additions
1,083
2,444
30
3,516
Disposals
-
-
-
-
Balance at 30 June 2025 (unaudited)
361,994
443,750
5,425
811,169
Accumulated depreciation
Balance at 1 January 2024 (audited)
(77,726)
(71,840)
(3,299)
(152,865)
Depletion and depreciation charge
(18,002)
(13,901)
(570)
(32,473)
Disposals
-
-
654
654
Balance at 31 December 2024 (audited)
(95,728)
(85,741)
(3,215)
(184,684)
Depletion and depreciation charge
(12,421)
(6,965)
(257)
(19,643)
Disposals
-
-
-
-
Balance at 30 June 2025 (unaudited)
(108,149)
(92,706)
(3,472)
(204,327)
Net book value
1 January 2024 (audited)
115,899
358,326
1,919
476,144
31 December 2024 (audited)
99,820
355,565
2,068
457,453
30 June 2025 (unaudited)
253,845
351,044
1,953
606,842
Upstream assets principally comprise the well and field development costs relating to the Uquo and Stubb Creek oil and gas fields in Nigeria. Oil and gas assets recognised through acquisition of Savannah Energy Stubb Creek Limited relates to 49% interest in the Stubb Creek Field. In line with the acquisition, the previously held oil gas assets were revalued in line with step-up acquisition reporting standard under IFRS 3. See Note 19 Business Combination for further details.
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 2025 and the year ended 31 December 2024, no such triggers were identified.
12. Trade and other receivables
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
Trade receivables
527,727
538,894
Receivables from a joint arrangement
-
4,509
Other financial assets
16,646
12,657
544,373
556,060
Expected credit loss
(110,586)
(98,102)
434,787
457,958
Loans and advances
2,709
1,442
VAT receivable
1,733
2,242
Prepayments and other receivables
26,882
8,405
Derivative asset (oil hedge)
1,214
-
466,325
470,047
The following has been recognised in the condensed statement of comprehensive income relating to expected credit losses for the period:
2025
2024
US$'000
US$'000
Six months ended 30 June
Unaudited
Unaudited
Provision for expected credit losses
11,525
12,944
Expected credit loss and other related adjustments
11,525
12,944
13. Cash at bank
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
Cash and cash equivalents
49,124
26,322
Amounts held for debt service
1,264
6,263
50,388
32,585
Amounts held for debt service represents Naira denominated cash balances which are held for debt service, and this has been separately disclosed from Cash and cash equivalents.
14. Trade and other payables
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
Trade payables
18,974
18,584
Accruals
51,482
27,671
VAT and WHT payable
21,060
19,226
Royalty and levies
7,554
5,510
Employee benefits
280
17
Financial liability
2,081
1,350
Other payables
15,580
7,789
Trade and other payables
117,011
80,147
Other payables - non-current
Employee benefits
1,844
1,671
Other payables
1,000
-
2,844
1,671
119,855
81,818
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
15. Borrowings
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
Revolving credit facility
2,361
2,327
Bank loans
457,406
426,873
Senior Secured Notes
59,579
88,428
Other loan notes
159,753
151,900
679,099
669,528
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
Current borrowings
272,371
299,299
Non-current borrowings
406,728
370,229
679,099
669,528
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 customers.
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
Amount due for delivery within 12 months
16,241
18,664
Amount due for delivery after 12 months
389,503
382,640
405,744
401,304
30 June 2025
31 December 2024
US$'000
US$'000
Unaudited
Audited
As at 1 January
401,304
364,144
Additional contract liabilities
10,377
46,605
Contract liabilities utilised
(9,262)
(14,735)
Unwinding of discount on contract liabilities
3,325
5,290
As at end of period
405,744
401,304
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 2025 (audited)
669,528
27,248
3,990
700,766
Cash flows
Proceeds
65,193
-
-
65,193
Repayment
(41,705)
(54,224)
(265)
(96,194)
Realised FX
-
(2)
-
(2)
23,488
(54,226)
(265)
(31,003)
Non-cash adjustments
Payment in kind adjustment/accretion of interest
8,907
53,645
400
62,952
Net debt fees
(2,447)
-
-
(2,447)
Settlement
(20,845)
(454)
-
(21,299)
Re-estimation of lease liability
-
-
56
56
Foreign translation
466
178
136
780
Balance at 30 June 2025 (unaudited)
679,097
26,391
4,317
709,805
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
18. Capital commitments
At 30 June 2025, capital commitments amounted to US$9.5 million (30 June 2024: US$0.5 million).
19. Business combination
On 19 March 2024, the Company announced that a wholly subsidiary had signed Share Purchase Agreements to acquire SIPEC, the Group's joint venture partner in the Stubb Creek Field. On 10 March 2025 the SIPEC Acquisition completed and the entity was renamed as Savannah Energy Stubb Creek Limited ("SESCL"). The entity owns a 49% non-operated interest and completion of the SIPEC Acquisition now gives the Group a combined effective ownership of 100% in the Stubb Creek Field. The Group is proceeding with its plans to increase oil production.
The SIPEC Acquisition has been accounted for using the acquisition method and the Group has applied the requirements for a business combination achieved in stages by remeasuring its previously held interest in the joint operation through Universal Energy Resources Limited ("UERL"). The interim consolidated financial statements include the results of SESCL from the acquisition date and the six-month results for UERL.
Set out below are the provisional fair values of the separable assets and liabilities of the combined acquired entities (SESCL and UERL) together with the fair value of the purchase consideration*.
10 March
2025
US$'000
Property, plant and equipment
190,000
Deferred tax assets
60,700
Inventories
7,557
Trade receivables and other current assets
10,889
Cash and cash equivalents
19,892
Total assets
289,038
Trade and other payables
(27,569)
Deferred tax liability
(24,900)
Provisions
(4,775)
Total liabilities
(57,244)
Total identifiable net assets at fair value
231,794
Bargain purchase arising on acquisition
(127,422)
Total fair value of consideration transferred
104,372
Consideration satisfied by:
10 March
2025
US$'000
Gross cash paid, includes an amount for an assigned inter-company receivable
35,072
Deferred consideration
1,800
FV of previously held interest
67,500
Total fair value of consideration transferred
104,372
* As at the date of the approval of these financial statements the purchase price allocation process and the determination of the fair values of the assets and liabilities of the acquired entity were yet to conclude. Net assets may therefore be subsequently adjusted, with a corresponding adjustment to gain on bargain purchase. This exercise will be completed prior to 10 March 2026 (one year after the completion of the SIPEC Acquisition).
The Group recognised a gain on the previously held interest from remeasurement in UERL to its fair value on the acquisition date.
10 March
2025
US$'000
FV of previously held interest
67,500
Net book value of UERL
(44,236)
Gain on previously held interest
23,264
The acquisition date fair value of the trade receivables amounts to US$1.2 million. The gross amount due under the contract is US$2.2 million of which US$0.9 million is expected to be uncollectible.
Transaction costs related to the SIPEC Acquisition of US$11.0 million have been expensed and are reported within Transaction and other related expenses in the Condensed consolidated statement of comprehensive income, and are reflected in Cash flows from operating activities in the Condensed consolidated statements of cash flows.
20. Contingent liabilities
As explained the 2024 Annual Report, 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 Directors have sought legal advice which has confirmed that the scope of Law No. 003/PT/2023 promulgated by the President of Chad on 31 March 2023 (Nationalisation Law) is not specific in relation to SCI's liabilities in Chad. The consequences of the Nationalisation Law for SCI will be established by an arbitration which SCI commenced during 2024 against the Republic of Chad and remains going as at the date of this report. 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 2024 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
On 19 September 2025, the Company announced that it is expected to sign a share and purchase agreement to acquire a 50.1% interest in Klinchenberg BV, a joint venture company which has a number of indirect interests in a portfolio of hydropower plants in Uganda, Malawi, Burundi, Democratic Republic of the Congo and Rwanda. The consideration for this transaction is expected to be up to US$65.4 million and expected to close during 2026.
Footnotes
1. On a pro forma basis as at end 2024.
2. Based on the March 2025 Competent Persons Report prepared by McDaniel & Associates Consultants Ltd.
3. Note that gas production levels are largely driven by customer nomination levels, while cash collections are largely driven by contractual maintenance adjusted take-or-pay provisions of 117 MMscfpd in aggregate.
4. 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.
5. 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.
6. Leverage is defined as net debt/Adjusted EBITDA5, with Adjusted EBITDA5 being prepared on a rolling 12-month basis and incorporating a pro-forma 12-month EBITDA in respect of SIPEC.
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