REG - Savannah Energy Plc - Half-year Report
30/09/2024 18:15
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RNS Number : 3318G Savannah Energy Plc 30 September 2024
30 September 2024
Savannah Energy PLC
("Savannah" or "the Company")
2024 Half-Year Results
Savannah Energy PLC, the British independent energy company focused around the
delivery of Projects that Matter, is pleased to announce its unaudited
half-year results for the six months ended 30 June 2024.
Andrew Knott, CEO of Savannah Energy, said:
"I am pleased to report our results for the first six months of 2024, as well
as the wider progress we are making developing our business. Key highlights in
H1 included the delivery of US$233m of Total Income(1) and the announcement of
our planned acquisition of SINOPEC's upstream assets in Nigeria. Alongside
this, we are pleased to report strong progress in the development of our
renewable energy business, particularly relating to our planned projects in
Niger and Cameroon. Looking forward we expect to make a series of
announcements around our entry into further renewable energy projects prior to
year-end. We remain unequivocally an "AND" company, seeking to deliver strong
performance both for the short AND long term across multiple fronts, and
pursuing growth opportunities in both the hydrocarbon AND renewable energy
sectors."
Highlights
· Average gross daily production of 24.4 Kboepd, a 3% increase compared
to FY2023 (23.6 Kboepd);
· Up to 696 MW of renewable energy projects in motion at
period-end, and targeting a portfolio of up to 1 GW+ of renewable energy
projects in motion by end 2024 and up to 2 GW+ by end 2026;
· Three contracts with customers agreed and extended in the
year-to-date for a total of up to 105 MMscfpd;
· Strong financial performance reported in the period:
o Total Income(1) increased by 40% to US$233.4 million (H1 2023: US$167.6
million), comprising Total Revenues(2) of US$123.5 million and Other operating
income of US$109.9 million;
o Operating profit of US$152.3 million, 130% higher than H1 2023 (US$66.2
million); and
o Adjusted EBITDA(3) of US$91.6 million (H1 2023: US$108.2 million). This
excludes Other operating income which when included shows a 47% increase
year-on-year to US$201.5 million (H1 2023: US$137.1 million).
· Agreements signed to consolidate our interest in Stubb Creek
through the acquisition of 100% of Sinopec International Petroleum Exploration
and Production Company Nigeria Limited ("SIPEC") for a total consideration of
US$61.5 million (the "SIPEC Acquisition"). Completion of the SIPEC Acquisition
is anticipated in Q4 2024, with plans in place to more than double oil
production to approximately 4.7 Kbopd within 12 months of completion;
· US$45 million compression project in Nigeria remains on-budget
and on-track for completion during 2024, enabling us to maintain and grow our
gas production levels over the long-term; and
· Naira denominated debt facility signed with a consortium of five
Nigerian banks. This is being progressively drawn down, with the resulting
funds being converted to US$ to repay the existing Accugas US$ Facility.
2024 Guidance
· Guidance is reiterated at:
o Total Revenues(2) 'greater than US$245 million';
o Operating expenses plus administrative expenses(4) 'up to US$75 million';
and
o Capital expenditure 'up to US$50 million'.
For further information, please refer to the Company's website
www.savannah-energy.com or contact:
Savannah
Energy
+44 (0) 20 3817 9844
Andrew Knott, CEO
Nick Beattie, CFO
Sally Marshak, Head of IR & Communications
Strand Hanson Limited (Nominated
Adviser) +44 (0) 20 7409 3494
James Spinney
Ritchie Balmer
Rob Patrick
Cavendish Capital Markets Ltd (Joint
Broker) +44 (0) 20 7220 0500
Derrick Lee
Tim Redfern
Panmure Liberum Limited (Joint
Broker) +44 (0) 20
3100 2000
Scott Mathieson
Kieron Hodgson
James Sinclair-Ford
Camarco
+44 (0) 20 3757 4983
Billy Clegg
Owen Roberts
Violet Wilson
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018, as amended.
About Savannah:
Savannah Energy PLC is a British independent energy company focused around the
delivery of Projects that Matter in Africa.
Operational Review
Nigeria
Average gross daily production was 24.4 Kboepd an increase of 3% compared to
FY 2023 (23.6 Kboepd).
During 2024 YTD, three gas contracts have been agreed and extended for a total
of up to 105 MMscfpd, including:
· An extension of the agreement with First Independent Power
Limited ("FIPL") was signed in January 2024 for an additional 12-month period,
whereby Accugas is supplying FIPL's FIPL Afam, Eleme and Trans Amadi power
stations with up to 65 MMscfpd of gas;
· A new 24-month agreement was signed in July 2024 with Ibom Power
Company Limited, owner of the Ibom power station, to supply up to 30 MMscfpd
of gas. This follows the expiration of the previous 10-year agreement; and
· An extension of the agreement with Central Horizon Gas Company
Limited ("CHGC") was signed in August 2024 for an additional 12-month period,
whereby Accugas is supplying CHGC with up to 10 MMscfpd of gas.
Progress continues on the US$45 million compression project at the Uquo
Central Processing Facility ("CPF"). In H1 2024, we completed the detailed
engineering work, the procurement of all long lead items and the site
preparation, piling and civil works. All remaining site installation works,
including structural works, electrical and instrumentation, piping and
mechanical works, and the compressor package installation itself, are nearing
completion and pre-commissioning activities are underway.
The compression project remains on budget and on track to be completed during
2024. The remaining steps to it becoming operational include the finalisation
of site installation activities, mechanical works, and pre-commissioning and
commissioning activities, together with the receipt of regulatory approval.
Post-period end in August 2024, we successfully completed an annual
maintenance programme at the CPF, which involved a 10-day shutdown of the
plant. This was also used as an opportunity to tie in the new compression
system.
We are currently working on a proposed further development programme for the
Uquo field which is expected to see additional wells drilled in 2025 and
2026.
SIPEC Acquisition
In March 2024, we announced the proposed acquisition (via two separate
transactions) of 100% of SIPEC for a total consideration of US$61.5 million.
SIPEC's principal asset is the 49% non-operated interest in Stubb Creek. A
subsidiary of Savannah, Universal Energy Resources Limited, is the 51% owner
and operator. We currently expect completion to occur in Q4 2024. The
transaction consideration is expected to be funded through a new senior debt
facility arranged by Standard Bank of South Africa Limited and the existing
cash resources of the Company.
As at year end 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and
227 Bscf of 2C Contingent gas resources. Savannah's Reserve and Resource base
is expected to increase by approximately 46 MMboe following completion of the
SIPEC Acquisition. SIPEC oil production is estimated at an average of 1.4
Kbopd for 2024. Following completion of the SIPEC Acquisition, we plan to
implement a de-bottlenecking programme at the Stubb Creek processing
facilities. It is anticipated that within 12 months of completion of the
acquisition, this will lead to Stubb Creek gross production increasing by 135%
to approximately 4.7 Kbopd. Importantly, the SIPEC Acquisition also secures
significant additional feedstock gas available for sale to our Accugas
subsidiary, underpinning Savannah's long-term ambition to be the gas supplier
of choice in Nigeria.
Niger
Savannah remains committed to the 35 MMstb (Gross 2C Resources) R3 East oil
development in South-East Niger. The Niger-Benin oil export pipeline, now
fully operational, provides a clear route to international markets for crude
oil produced from our R1234 contract area. We continue to progress our planned
four well testing programme and are in the process of mobilising the required
long lead item equipment into country.
Located in the Tahoua Region of southern Niger, Savannah's Parc Eolien de la
Tarka wind farm project is anticipated to be the country's first wind farm and
the largest in West Africa, with a total power generation capacity of up to
250 MW. We have signed agreements with two leading international Development
Finance Institutions (the International Finance Corporation, the private
sector arm of the World Bank, and the US International Development Finance
Corporation, the U.S. government's development finance institution) to
fund approximately two-thirds of the pre-construction development costs of the
project.
The project made significant progress in H1 2024 with all key studies now
either complete or at an advanced stage. We submitted our Environmental and
Social Impact Assessment ("ESIA") scoping report to the Government of Niger
and have been continuing to progress the ongoing ESIA field work additional
studies required for the submission of the full ESIA report, expected in 2025.
As part of the ESIA studies, Savannah is currently performing a land survey of
the wind farm area. We have partnered with the Department of Geography of the
Abdou Moumouni University of Niamey, where Savannah has enabled a cartography
and software training programme for a cohort of its students, before deploying
them under supervision on the Tarka site. This has provided local students
with a material and exciting learning experience, while involving them in a
transformational energy project for their country.
We hosted a site visit in August 2024 for Niger's Minister of Energy where we
provided the Minister, Governor of Tahoua, local officials and community
representatives with a presentation on the project and a tour of the wind farm
site. During the Minister's visit we detailed our plans for the project and
outlined its transformative potential for Niger and its people. The Minister
confirmed that the Parc Eolien de la Tarka wind farm project is on the
Ministry of Energy's list of priority projects.
Parc Eolien de la Tarka is expected to produce up to 800 GWh of electricity
per year, representing approximately 22% of Niger's annual electricity demand,
based on the country's projected energy demand in 2026. The construction phase
is expected to create over 500 jobs, while the project has the potential to
reduce the cost of electricity for Nigeriens and avoid an estimated 450,000
tonnes of CO(2) emissions annually.
We also continue to progress the two photovoltaic solar power plants expected
to be located within 20 km of the cities of Maradi and Zinder. In H1 2024, we
presented the preliminary commercial and technical proposals to the Government
of Niger. A sanctioning decision on these projects is expected in 2025, with
first power in 2027.
Cameroon
Substantial progress has been made on the Bini a Warak Hybrid Hydroelectric
and Solar Project in Cameroon, following the approval of the optimisation and
proposed redesign of the project given by the Minister of Water and Energy.
The redesigned project, involving the construction of a hydroelectric dam on
the Bini River in the northern Adamawa region of Cameroon, now incorporates
photovoltaic solar, raising its installed power generation capacity from up to
75 MW to up to 95 MW. We continue to progress the project towards an
anticipated project sanction in 2026, with first power targeted in the 2028 to
2029 window.
South Sudan
As separately announced today, Savannah remains in active discussions
regarding a potential transaction in South Sudan. A further update is expected
to be made in early November.
Chad Arbitration Update
As previously disclosed in Savannah's 2023 Annual Report, Savannah Chad Inc
("SCI"), has commenced arbitral proceedings against the Government of the
Republic of Chad and its instrumentalities in response to the March 2023
nationalisation of SCI's rights in the Doba fields in Chad, and other breaches
of SCI's rights. Our other wholly owned subsidiary, Savannah Midstream
Investment Limited ("SMIL"), has commenced arbitral proceedings in relation to
the nationalisation of its investment in Tchad Oil Transportation Company, the
Chadian company which owns and operates the section of the Chad-Cameroon
pipeline located in Chad. SMIL has also commenced arbitral and other legal
proceedings for breaches of SMIL's rights in relation to Cameroon Oil
Transportation Company ("COTCo"), the Cameroon company which owns and operates
the section of the Chad-Cameroon pipeline located in Cameroon.
We expect the arbitral proceedings to be concluded in the second half of 2025.
SCI and SMIL are claiming in excess of US$840 million for the nationalisation
of their rights and assets in Chad, and SMIL has a claim valued at
approximately US$380 million for breaches of its rights in relation to COTCo.
Whilst the Government of the Republic of Chad has acknowledged SCI's and
SMIL's right to compensation, no compensation has been paid or announced by
the Government of the Republic of Chad to date.
Savannah remains ready and willing to discuss with the Government of the
Republic of Chad an amicable solution to the disputes. However, in the absence
of such discussions, the Group intends to vigorously pursue its rights in the
arbitrations.
Sustainability
We published our Task Force on Climate-Related Financial Disclosures 2023
disclosure report and our maiden disclosure report in accordance with our
chosen 13 United Nations Sustainable Development Goals in June 2024. We
continue to progress our 2024 sustainability performance measurement and
reporting in line with our sustainability strategy.
Financial Review
The table below provides an overview of our results for H1 2024 with a
comparison for H1 2023:
Financial highlights
Six months ended Six months ended
30 June 2024 30 June 2023*
Total Income(1), US$ million 233.4 167.6
Adjusted EBITDA(3), US$ million 91.6 108.2
Adjusted EBITDA(3) including Other operating income, US$ million 201.5 137.1
Revenue, US$ million 114.8 123.7
Operating profit, US$ million 152.3 66.2
Operating margin, % (Operating profit/ Total Income(1)) 65.3% 39.5%
Operating expenses plus administrative expenses(4), US$ million 27.5 25.1
Operating expenses plus administrative expenses(4), US$/Mscfe 1.1 1.1
* The prior year comparative has been restated to conform with the
presentation of "other operating income" in the 2023 annual report
Total Income(1) is 40% higher compared to previous period at US$233.4 million
(H1 2023: US$167.6 million) - this measures the total amount of invoiced
income for the period and captures both Total Revenues(2) plus Other operating
income. We believe this is the most representative measure of the underlying
income of the Group during the period. The substantial increase is due
principally to Other operating income of US$109.9 million (H1 2023: US$28.9
million), which relates to the re-billing of foreign exchange losses incurred
by Accugas as it converted historic Naira cash received into US dollars. Total
Revenues(2) were slightly lower in the period due to phasing of delivery of
gas under certain contracted GSAs and a different mix of customers supplied in
the period.
Operating profit was significantly higher than H1 2023 at US$152.3 million (H1
2023: US$66.2 million), driven again by the higher level of re-billing of
realised foreign exchange losses.
Adjusted EBITDA(3) was US$91.6 million (H1 2023: US$108.2 million), which
excludes Other operating income. When including this Other operating income,
Adjusted EBITDA(3) would be US$201.5 million (H1 2023: US$137.1 million).
Adjusted EBITDA(3) margin, excluding Other operating income, is slightly lower
at 74% (H1 2023: 78%), with this reduction largely due to an increase in
Operating expenses plus administrative expenses(4) of 10% compared to 2023.
However, in H1 2023 certain costs, amounting to US$6.9 million were recharged
to operations in Cameroon which did not re-occur in H1 2024. Excluding this
recharge, underlying costs decreased on a comparable basis.
Revenue
Revenue during the period of US$114.8 million (H1 2023: US$123.7 million) was
7% lower than 2023 driven primarily by delivery of gas to a different mix of
customers compared to prior year.
As previously highlighted, it is important to note the impact of take-or-pay
accounting rules under IFRS 15 on our Income Statement as regards to revenue
recognition for our gas sales agreements. The Revenue shown in the Condensed
Consolidated Statement of Comprehensive Income includes only the gas, oil and
condensate that has been delivered. The Total Revenues(2) of US$123.5 million
(H1 2023: US$138.7 million) includes the volume of gas that customers are
committed to pay for under the take-or-pay terms of certain gas sales
agreements, which includes gas that has been delivered plus gas invoiced but
yet to be delivered, plus oil and condensate revenues. The foreign exchange
true-up invoices are also not reflected within Revenue or Total Revenues(2).
Savannah continues to benefit from over US$3.4 billion of contracted future
gas revenues in Accugas with annual price escalation clauses tied to US
consumer price inflation.
Cost of Sales, administrative and other operating expenses
Cost of sales amounted to US$34.7 million (H1 2023: US$35.5 million) which
includes US$16.0 million (H1 2023: US$14.9 million) for facility operating and
maintenance costs, US$2.6 million (H1 2023: US$2.7 million) royalty expenses
and US$16.1 million (H1 2023: US$17.8 million) depletion and depreciation.
Administrative and other operating expenses for the period were US$15.9
million (H1 2023: US$14.3 million).
On a unit of production basis, costs are stable at US$1.1/Mscfe (H1 2023:
US$1.1/Mscfe). Costs have been well managed during the period and on an
underlying basis are lower than in the prior period - during H1 2023 there was
approximately US$6.9 million of central costs recharged to Cameroon operations
which did not reoccur in H1 2024. The Company has taken steps to reduce
central costs which has kept costs stable on a unit of production basis.
Transaction and other related expenses of US$8.9 million (H1 2023: US$2.8
million) primarily relate to legal expenses with respect to the ongoing
arbitration processes and the activity associated with the proposed
acquisitions in Nigeria and South Sudan.
Finance Costs
The 24% decrease in Finance costs to US$39.3 million (H1 2023: US$51.8
million) is largely a result of release of legacy non-cash related finance
costs of US$9.6 million and a US$4.0 million reduction in other finance costs
from a lower unwind of the decommissioning provision discount. Interest costs
were broadly unchanged at US$42.1 million (H1 2023: US$41.4 million).
Foreign Exchange loss
Foreign exchange losses amounted to US$67.6 million (H1 2023: US$82.9
million). Of this, US$49.9 million (H1 2023: US$54.7 million) are unrealised
losses, mainly due to movements in Naira monetary assets and liabilities,
specifically Naira cash balances, which occurred as a result of further Naira
devaluation from approximately NGN900:US$ at year-end 2023 to NGN1,470:US$ at
30 June 2024.
Realised losses were lower than previous period at US$17.7 million (H1 2023:
US$28.2 million). Certain foreign exchange losses are recoverable through the
true up mechanism included in the GSA with our principal gas customer. These
amounts, when invoiced, are reported under Other operating income - as noted
above, in H1 2024 these amounted to US$109.9 million (H1 2023: US$28.9
million).
Cash flow
Operating cashflows before working capital adjustments remained stable at
US$166.3 million (H1 2023: US$163.0 million).
Cash balances at 30 June 2024 were US$42.9 million (31 December 2023: US$106.9
million) with the reduction due principally to a US$60.2 million effect of
devaluation on Naira denominated cash and cash equivalent balances. In
addition, cash generated during the period was utilised towards debt
repayments and finance costs amounting to a combined US$106.8 million (H1
2023: US$102.9 million) partially offset by drawings under the Accugas Naira
transitional facility of US$39.0 million (H1 2023: Nil).
Capital and exploration expenditure for the period amounted to US$13.9 million
(H1 2023: US$4.2 million), the majority of which related to the Uquo
compression project.
Debt
Net debt at 30 June 2024 was US$533.1 million an increase of 13% from year-end
position (31 December 2023: US$473.7 million). Gross debt was reduced at
US$576.0 million (31 December 2023: US$580.7 million) and the increase seen in
net debt was primarily a result of the devaluation of Naira denominated cash
balances as discussed above. This has resulted in leverage(5) increasing from
2.6x to 3.2x.
It is worth noting the treatment of the debt facility entered into to finance
the acquisition of the Chad and Cameroon Assets. Despite the Nationalisation
there remains an outstanding balance of US$126.7 million (31 December 2023:
US$119.3 million) - of this amount only up to a maximum of US$37.0 million is
recourse to the Company with the remainder being fully non-recourse. The only
other debt within the Group which is resource to the Company totals
approximately US$11.9 million, with all other borrowings on a non-recourse
basis.
In H1 2024, a new NGN340 billion 4 year-term facility was signed by Accugas
with a consortium of five Nigerian banks. This facility is being progressively
drawn down with the resulting funds being converted to US$, which along with
cash held is used to repay the existing Accugas US$ Facility. This process,
when complete, will align Accugas' debt facility with the currency in which
gas revenues are received. Year to date NGN 196 billion has been drawn and we
continue to also advance plans for a potential long-dated domestic bond
issuance to ultimately replace the transitional facility.
Going Concern
The results have been presented on a going concern basis. Details of the
Group's assessment of going concern for the period can be found in note 2.
Footnotes
(1) Total Income is calculated as Total Revenues(2) plus Other operating
income.
(2) Total Revenues are defined as the total amount of invoiced sales during
the period. This number is seen by management as more accurately reflecting
the underlying cash generation capacity of the business as opposed to Revenue
recognised in the Condensed Consolidated Statement of Comprehensive Income.
( )
(3) Adjusted EBITDA is calculated as profit or loss before finance costs,
investment revenue, foreign exchange gains or losses, expected credit loss and
other related adjustments, fair value adjustments, gain on acquisition, share
based payments, taxes, transaction and other related expenses, depreciation,
depletion and amortisation and adjusted to include deferred revenue and other
invoiced amounts. Management believes that the alternative performance measure
of Adjusted EBITDA more accurately reflects the cash-generating capacity of
the business.
(4) Group operating expenses plus administrative expenses are defined as total
cost of sales, administrative and other operating expenses, excluding gas
purchases, royalties, depletion, depreciation and amortisation and transaction
costs.
(5) Leverage is defined as net debt/Adjusted EBITDA(3). For the 6-month period
ended 30 June 2024, the Leverage calculation is prepared on a rolling 12-month
basis.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2024
Six months ended Six months ended
30 June 30 June
2024 2023
US$'000 US$'000
Note Unaudited Unaudited
Continuing operations
Revenue 4a 114,788 123,728
Cost of sales 5 (34,695) (35,464)
Gross profit 80,093 88,264
Other operating income 4b 109,930 28,877
Administrative and other operating expenses (15,904) (14,284)
Transaction and other related expenses 6 (8,914) (2,833)
Expected credit loss and other related adjustments 12 (12,944) (33,840)
Operating profit 6 152,261 66,184
Share of profit from associates - 3,580
Finance income 1,815 1,440
Finance costs 7 (39,271) (51,752)
Fair value through profit or loss - 6,519
Foreign exchange loss 8 (67,592) (82,893)
Profit/(loss) before tax 47,213 (56,922)
Current tax expense 9 (15,198) (9,756)
Deferred tax (expense)/credit 9 (11,662) 21,489
Total tax (expense)/credit 9 (26,860) 11,733
Profit/(loss) after tax 20,353 (45,189)
Discontinued operations
Profit after tax from discontinued operations 19 - 91,962
Profit after tax and Total comprehensive income from continuing and 20,353 46,773
discontinued operations
Total comprehensive profit/(loss) attributable to:
Owners of the Company 16,268 54,428
Non-controlling interests 4,085 (7,655)
20,353 46,773
US cents US cents
Earnings/(loss) per share for continuing operations
Basic 10 1.34 (3.09)
Diluted 10 1.28 (3.09)
Earnings per share including discontinued operations
Basic 10 1.34 4.48
Diluted 10 1.28 4.26
Condensed consolidated statement of financial position
as at 30 June 2024
30 June 31 December
2024 2023
US$'000 US$'000
Note Unaudited Audited
Assets
Non-current assets
Property, plant and equipment 11 465,958 476,144
Intangible assets 176,456 174,707
Financial investment 139,459 139,459
Deferred tax assets 215,656 227,318
Right-of-use assets 2,363 2,648
Restricted cash 29 29
Other non-current receivables 15,902 9,879
Total non-current assets 1,015,823 1,030,184
Current assets
Inventory 7,148 7,143
Trade and other receivables 12 442,301 370,857
Cash at bank 13 42,881 106,941
Total current assets 492,330 484,941
Total assets 1,508,153 1,515,125
Equity and liabilities
Capital and reserves
Share capital 1,836 1,836
Share premium 126,824 126,824
Treasury shares (136) (136)
Other reserves 531 531
Share-based payment reserve 15,732 14,717
Retained earnings 126,994 110,726
Equity attributable to owners of the Company 271,781 254,498
Non-controlling interests 13,344 9,259
Total equity 285,125 263,757
Non-current liabilities
Other payables 14 1,422 2,030
Borrowings 15 429,919 213,469
Lease liabilities 1,358 1,998
Provisions 50,134 49,256
Contract liabilities 16 360,765 346,490
Total non-current liabilities 843,598 613,243
Current liabilities
Trade and other payables 14 98,613 108,000
Borrowings 15 146,124 367,199
Interest payable 17 100,926 136,090
Tax liabilities 16,795 6,384
Lease liabilities 2,295 2,798
Contract liabilities 16 14,677 17,654
Total current liabilities 379,430 638,125
Total liabilities 1,223,028 1,251,368
Total equity and liabilities 1,508,153 1,515,125
Condensed consolidated statement of cash flows
for the six months ended 30 June 2024
Six months ended Six months ended
30 June 2024 30 June 2023
US$'000 US$'000
Note Unaudited Unaudited
Cash flows from operating activities:
Profit/(loss) before tax from continuing operations 47,213 (56,922)
Profit before tax from discontinued operations - 59,748
Adjustments for:
Depreciation 1,474 1,804
Depletion 16,126 17,832
Finance income (1,598) (1,350)
Finance costs 7 39,271 51,752
Share of profit from associates - (4,155)
Fair value through profit or loss - (6,519)
Unrealised foreign exchange loss 8 49,875 54,689
Share-based payments 1,015 (74)
Expected credit loss and other related adjustments 12 12,944 33,840
Chad Assets net impairment 19 - 12,350
Operating cash flows before movements in working capital 166,320 162,995
Increase in inventory (5) (1,521)
Increase in trade and other receivables (94,597) (83,517)
Decrease in trade and other payables (1,604) (54,209)
Increase in contract liabilities 8,780 1,843
Income tax paid (4,401) (1,975)
Net cash generated from operating activities 74,493 23,616
Cash flows from investing activities:
Interest received 134 668
Payments for property, plant and equipment (9,729) (2,379)
Payments for exploration and evaluation assets (4,179) (1,824)
Acquisition related receipt 10,000 -
Proceeds from disposal - 44,900
Loans and advances - receipts 782 -
Loans and advances - payments (7,351) (2,512)
Cash transferred from debt service accounts 57,180 83,633
Lessor receipts 223 147
Net cash generated from investing activities 47,060 122,633
Cash flows from financing activities:
Finance costs (59,576) (29,099)
Proceeds from issues of equity shares, net of issue costs - 2,013
Borrowing proceeds 17 39,018 -
Borrowing repayments 17 (47,236) (73,783)
Lease payments 17 (467) (484)
Net cash used in from financing activities (68,261) (101,353)
Net increase in cash and cash equivalents 53,292 44,896
Effect of exchange rate changes on cash and cash equivalents (60,172) (66,493)
Cash and cash equivalents at beginning of period 48,134 104,147
Cash and cash equivalents at end of period 13 41,254 82,550
Amounts held for debt service at end of period 13 1,627 53,107
Cash at bank at end of period 13 42,881 135,657
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2024
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$'000
Balance at 1 January 2024 (audited) 1,836 126,824 (136) 531 14,717 110,726 254,498 9,259 263,757
Profit after tax and Total comprehensive income - - - - - 16,268 16,268 4,085 20,353
Total comprehensive income - - - - - 16,268 16,268 4,085 20,353
Transactions with shareholders:
Equity-settled share-based payments - - - - 1,015 - 1,015 - 1,015
Balance at 30 June 2024 (unaudited) 1,836 126,824 (136) 531 15,732 126,994 271,781 13,344 285,125
Share capital Share premium Treasury shares Other reserves Share-based payment reserve Retained earnings Equity attributable to the owners of the Company Non-controlling interest Total equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2023 (restated and audited) 1,828 124,819 (136) 531 9,974 95,940 232,956 11,116 244,072
Profit/(loss) after tax and Total comprehensive income - - - - - 54,428 54,428 (7,655) 46,773
Total comprehensive income - - - - - 54,428 54,428 (7,655) 46,773
Transactions with shareholders:
Equity-settled share-based payments - - - - (74) - (74) - (74)
Issue of shares, net of costs 7 1,983 - - - - 1,990 - 1,990
Balance at 30 June 2023 (unaudited) 1,835 126,802 (136) 531 9,900 150,368 289,300 3,461 292,761
Notes to the condensed consolidated interim financial statements
1. General information
Savannah Energy PLC ("Savannah" or "the Company") was incorporated in England
and Wales on 3 July 2014. The condensed consolidated financial statements of
Savannah and its subsidiaries (together the "Group") for the six months ended
30 June 2024 were approved and authorised for issuance by the board of
directors on
27 September 2024.
The Group's principal activities are the exploration, development and
production of natural gas and crude oil and development of other energy
related projects in Africa.
The Company is domiciled in England for tax purposes and its shares were
listed on the Alternative Investment Market ("AIM") of the London Stock
Exchange on 1 August 2014. The Company's registered address is 40 Bank
Street, London, E14 5NR.
2. Accounting policies
Basis of Preparation
The condensed consolidated interim financial statements included within this
Interim Report have been prepared in a form consistent with that which will be
adopted in the Company's annual accounts having regard to the accounting
standards applicable to such annual accounts, and in accordance with the
London Stock Exchange AIM Rules for Companies. The provisions of IAS 34:
Interim Financial Reporting have not been applied.
The condensed consolidated interim financial statements do not include all
disclosures that would otherwise be required in a complete set of financial
statements and should be read in conjunction with the Group's 2023 Annual
Report and Accounts 2023, for the year ended 31 December 2023 ("the Group's
2023 Annual Report"). The financial information for the six months ended 30
June 2024 does not constitute statutory accounts within the meaning of Section
434(3) of the Companies Act 2006 and is unaudited.
The annual financial statements of Savannah for the year ended 31 December
2023 were prepared in accordance with UK-adopted international accounting
standards in conformity with the requirements of the Companies Act 2006. The
Independent Auditors' Report on the Group's 2023 Annual Report contained a
qualification opinion as described below, and as such contained a statement
under 498(2) or 498(3) of the Companies Act 2006. The Group's statutory
financial statements for the year ended 31 December 2023 have been filed with
the Registrar of UK Companies.
All the Company's subsidiaries' functional currency is US Dollars ("US$"), and
the consolidated financial statements are presented in US Dollars and all
values are rounded to the nearest thousand (US$'000), except when otherwise
stated.
The financial information presented herein has been prepared in accordance
with the accounting policies used in preparing the Group's 2023 Annual Report.
There are no other new or amended standards or interpretations adopted from 1
January 2024 that have a significant impact on the interim financial
information.
As disclosed in the Group's 2023 Annual Report, the Republic of Chad
nationalised the Group's interests in its Chad subsidiaries Savannah Chad Inc
("SCI") and Savannah Midstream Investment Limited ("SMIL"), (the "Chad
Assets") by way of a law passed on 31 March 2023 (the "Nationalisation"). As
a result of the Nationalisation, the Group was unable to fully access all the
underlying financial information, nor have access to the relevant Chad-based
employees of the affected entities SCI and SMIL in order to prepare the
financial information: (i) for audit purposes to be consolidated into the
Group's financial statements for the year ended 31 December 2023, which were
qualified in this respect; and (ii) for the unaudited condensed consolidated
interim financial statements for the six months ended 30 June 2023.
Therefore, as at 31 March 2023 the activities of the Chad Assets were
considered as a discontinued operation, in accordance with IFRS 5: Non-current
Assets for Sale and Discontinued Operations; and the net statement of
financial position associated with the Chad Assets was fully impaired such
that no balances remained in the consolidated statement of position at
subsequent reporting dates. In the six months ended 30 June 2024, no further
transactions were recorded with this discontinued operation and Note 20 sets
out the position of any potential contingent liabilities associated with the
Chad Assets.
With respect to the Group's valuation of its financial investment in Cameroon
Oil Transportation Company (COTCo), no further adjustment has been made as at
30 June 2024 - more details of this financial investment is set out in the
Group's 2023 Annual Report.
Going concern
The Group continues to trade strongly throughout 2024 with cash collections
from customers amounting to US$148.6 million for the six months ended 30 June
2024 and a total cash balance of US$42.9 million at the reporting date.
The Directors have reviewed the Group's forecasted cash flows for the twelve
months from the date of publication of this Interim Report. When reviewing the
forecasts the Directors have considered the Group's current trading
performance and considered the potential impact from certain sensitivities on
the forecasted cash flows including changes in commodity pricing, Naira
currency rate movements and timing of cash receipts from customers.
As a result, the Directors have confidence in the Group's forecasts and have a
reasonable expectation that the Group will continue in operational existence
for the going concern assessment period and have therefore used the going
concern basis in preparing these interim condensed financial statements.
3. Segmental reporting
For the purposes of resource allocation and assessment of segment performance,
the operations of the Group are divided into four segments: three geographical
locations and an Unallocated segment. The current geographical segments are
Nigeria, Cameroon and Niger. All these geographical segments' principal
activities are exploration, development and extraction of oil and gas. The
Unallocated segment's principal activities are the governance and financing of
the Group, as well as undertaking business development opportunities. Items
not included within Operating profit/(loss) are reviewed at a Group level and
therefore there is no segmental analysis for this information.
The following is an analysis of the Group's continuing operations results by
reportable segment for the six months ended 30 June 2024:
Nigeria Cameroon Niger Unallocated Total
US$'000 US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited Unaudited
Revenue 114,788 - - - 114,788
Cost of sales(1) (34,639) - (10) (46) (34,695)
Gross profit 80,149 - (10) (46) 80,093
Other operating income 109,930 - - - 109,930
Administrative and other operating expenses (2,532) - (508) (12,864) (15,904)
Transaction and other related expenses (1,075) - - (7,839) (8,914)
Expected credit loss and other related adjustments (12,944) - - - (12,944)
Operating profit/(loss) 173,528 - (518) (20,749) 152,261
Finance income 1,815
Finance costs (39,271)
Fair value through the profit or loss -
Foreign exchange loss (67,592)
Profit before tax 47,213
Segment depreciation, depletion and amortisation 16,128 - 114 1,358 17,600
Segment non-current assets additions(2) 6,191 - 2,615 114 8,920
1. Refer to Note 5 for items included within Cost of Sales.
2. Includes Property, plant and equipment and Exploration and
evaluation assets.
3. Refer to the Note 2, Accounting Policies - Basis of Preparation;
Note 19, Discontinued operations and Note 20, Contingent Liabilities, which
collectively sets out the Company's position with respect to the Chad Assets.
The following is an analysis of the Group's results by reportable segment for
the six months ended 30 June 2023:
Nigeria Cameroon Niger Unallocated Total
US$'000 US$'000 US$'000 US$'000 US$'000
Unaudited Unaudited Unaudited Unaudited Unaudited
Revenue 123,728 - - - 123,728
Cost of sales(1) (35,150) - (120) (174) (35,464)
Gross profit 88,578 - (120) (174) 88,264
Other operating income 28,877 - - - 28,877
Administrative and other operating expenses (3,748) - (107) (10,429) (14,284)
Transaction and other related expenses - - - (2,833) (2,833)
Expected credit loss and other related adjustments (33,840) - - - (33,840)
Operating profit/(loss) 79,867 - (227) (13,456) 66,184
Share of profit from associates 3,580
Finance income 1,440
Finance costs (51,752)
Fair value through the profit or loss 6,517
Foreign exchange loss (82,893)
Loss before tax (56,922)
Segment depreciation, depletion and amortisation 19,030 - 112 495 19,637
Segment non-current assets additions(2) 2,816 - 3,211 29 6,056
1. Refer to Note 5 for items included within Cost of Sales.
2. Includes Third party investments, Property, plant and equipment,
Exploration and evaluation assets and Right-of-use assets.
3. Refer to the Note 2, Accounting Policies - Basis of Preparation;
Note 19, Discontinued operations and Note 20, Contingent Liabilities, which
collectively sets out the Company's position with respect to the Chad Assets.
4. Revenue
(a) Revenue from contracts with customers
Set out below is the disaggregation of the Group's revenue from contracts with
customers:
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Gas sales 101,759 115,887
Oil and condensates sales 13,029 7,841
Revenue from contracts with customers 114,788 123,728
Gas sales represent gas deliveries made to the Group's customers under gas
sale agreements. The Group sells oil and condensates at prevailing market
prices.
(b) Other operating income
Other operating income of US$109.9 million (2023: US$28.9 million) relates to
the invoicing of foreign exchange losses incurred on certain customer trade
receivables that are settled in a currency other than the invoiced currency
and are permitted to be invoiced to the relevant customer. The prior period's
comparative has been represented from Foreign exchange losses to conform with
the presentation in the financial statements for the year ended 31 December
2023 and to more appropriately reflect the nature of these transactions.
5. Cost of sales
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Depletion - oil and gas, and infrastructure assets (Note 11) 16,126 17,832
Facility operation and maintenance costs 15,975 14,928
Royalties 2,594 2,704
34,695 35,464
6. Operating profit
Operating profit has been arrived at after charging:
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Staff costs 13,130 14,022
Depreciation - other assets (Note 11) 276 261
Depreciation - right-of-use assets 485 522
Amortisation of intangibles 713 1,021
Transaction and other related expenses(1) 8,914 2,833
1. Transaction and other related expenses primarily relate to the
Group's legal and other costs in relation to the Chad and Cameroon arbitration
processes, and acquisition related expenses relating to the proposed
acquisition of assets in South Sudan and Nigeria.
7. Finance costs
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Interest on bank borrowings and loan notes 42,061 41,350
Amortisation of balances measured at amortised cost(1) 3,316 5,667
Unwinding of decommissioning discount 542 2,119
Interest expense on lease liabilities 85 136
Bank charges and other finance costs 2,860 2,480
Reversal of prior period finance costs (9,593) -
39,271 51,752
1. Includes amounts due to unwinding of a discount on a long-term payable, contract liabilities (Note 16) and amortisation of debt fees.
8. Foreign exchange loss
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Realised loss 17,717 28,204
Unrealised loss 49,875 54,689
67,592 82,893
Realised foreign translation loss mainly relates to the translation of Naira
denominated transactions into US Dollars. The comparative for Realised loss
has been represented in accordance with Note 4b. Unrealised loss relates to
the revaluation of monetary items held in currencies other than in US Dollars.
9. Taxation
The tax expense/(credit) for the Group is:
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Current tax
Adjustments in respect of prior years - (42)
Current year 15,198 9,798
15,198 9,756
Deferred tax
Adjustments in respect of prior years 1,118 (989)
Write down and reversal of previous write downs of deferred tax assets - 5,300
Origination and reversal of temporary differences 10,544 (25,800)
11,662 (21,489)
Total tax expense/(credit) for the period 26,860 (11,733)
Income tax expense is recognised based on the actual results for the period and principally arises on Nigerian profits.
10. Earnings/(loss) per share
Basic earnings per share amounts are calculated by dividing the profit or loss
for the period attributable to owners of the Company by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the profit or
loss for the periods attributable to owners of the Company by the weighted
average number of ordinary shares outstanding during the period, plus the
weighted average number of shares that would be issued on the conversion of
dilutive potential ordinary shares into ordinary shares.
As there is a profit attributable to the owners of the Company for the six
months ended 30 June 2024, the diluted weighted average number of shares has
been calculated. In the comparative period, the basic average number of shares
was used to calculate the diluted loss per share given there is a loss
attributable to the owners of the Company, meaning the diluted weighted
average number of shares reduces the loss per share. Therefore, the basic
weighted average number of shares was used to calculate the diluted loss per
share.
The weighted average number of shares outstanding excludes treasury shares of
99,858,893 (30 June 2023: 99,858,893).
2024 2023
Unaudited Unaudited
Six months ended 30 June US$'000 US$'000
Profit/(loss) from continuing operations 20,353 (45,189)
Profit/(loss) attributable to owners of the Company(1) 16,268 (37,534)
Profit/(loss) attributable to non-controlling interests 4,085 (7,655)
(1. ) The earnings per share calculation only
takes into account profit/(loss) attributed to owners of the Company.
Number of shares Number of shares
Basic weighted average number of shares 1,214,693,115 1,214,693,115
Add: employee share options 59,887,307 63,727,684
Diluted weighted average number of shares 1,274,580,422 1,278,420,799
US cents US cents
Earnings/(loss) per share for continuing operations
Basic profit/(loss) per share 1.34 (3.09)
Diluted profit/(loss) per share 1.28 (3.09)
23,853,457 options granted under share option schemes are not included in the
calculation of diluted earnings per share because they are anti-dilutive for
the six months ended 30 June 2024 (30 June 2023: 23,853,457). These options
could potentially dilute basic earnings per share in the future.
To calculate the EPS inclusive of discontinued operations (Note 21), the
weighted average number of ordinary shares
for both the basic and diluted EPS is as per the table above. The following
table provides the profit/(loss) amount in addition to the above used:
2024 2023
Unaudited Unaudited
Six months ended 30 June US$'000 US$'000
Profit for the period including discontinued operations
Profit attributable to owners of the Company 16,268 54,428
US cents US cents
Earnings per share including discontinued operations
Basic profit per share 1.34 4.48
Diluted profit per share 1.28 4.26
11. Property, plant and equipment
Oil and gas assets Infrastructure assets Other assets
Total
US$'000 US$'000 US$'000 US$'000
Cost
Balance at 1 January 2023 (audited) 315,174 422,340 5,012 742,526
Additions 296 9,525 456 10,277
Disposals - - (250) (250)
Decommissioning remeasurement adjustment (287) (1,699) - (1,986)
Transferred to discontinued operations (121,558) - - (121,558)
Balance at 31 December 2023 (audited) 193,625 430,166 5,218 629,009
Additions 13 6,178 114 6,305
Disposals - - (301) (301)
Balance at 30 June 2024 (unaudited) 193,638 436,344 5,031 635,013
Accumulated depreciation
Balance at 1 January 2023 (audited) (59,245) (57,118) (3,045) (119,408)
Depletion and depreciation charge (20,097) (14,722) (504) (35,323)
Disposals - - 250 250
Transferred to discontinued operations 1,616 - - 1,616
Balance at 31 December 2023 (audited) (77,726) (71,840) (3,299) (152,865)
Depletion and depreciation charge (9,207) (6,919) (276) (16,402)
Disposals - - 212 212
Balance at 30 June 2024 (unaudited) (86,933) (78,759) (3,363) (169,055)
Net book value
1 January 2023 (audited) 255,929 365,222 1,967 623,118
31 December 2023 (audited) 115,899 358,326 1,919 476,144
30 June 2024 (unaudited) 106,705 357,585 1,668 465,958
Upstream assets principally comprise the well and field development costs
relating to the Uquo and Stubb Creek oil and gas fields in Nigeria.
Infrastructure assets principally comprise the Nigerian midstream assets
associated with the Group's network of gas transportation pipelines, oil and
gas processing facilities and gas receiving facilities. Other assets include
vehicles, office equipment and building improvements. Decommissioning
remeasurement adjustments reflect updated cost estimates for the
period/year.
Each year, management performs a review of each CGU to identify potential
impairment triggers. During the six months ended 30 June 2024 and the year
ended 31 December 2023, no such triggers were identified.
12. Trade and other receivables
30 June 31 December
2024 2023
US$'000 US$'000
Unaudited Audited
Trade receivables 477,487 389,911
Receivables from a joint arrangement 4,109 5,388
Other financial assets 5,788 5,829
487,384 401,128
Expected credit loss (66,431) (53,487)
420,953 347,641
Loans and advances 1,315 2,093
VAT receivable 1,645 1,100
Prepayments and other receivables 18,388 20,023
442,301 370,857
The following has been recognised in the Condensed statement of comprehensive
income relating to expected credit losses for the period:
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Provision for expected credit losses 12,944 33,840
Expected credit loss and other related adjustments 12,944 33,840
13. Cash at bank
30 June 31 December
2024 2023
US$'000 US$'000
Unaudited Audited
Cash and cash equivalents 41,254 48,134
Amounts held for debt service 1,627 58,807
42,881 106,941
Cash and cash equivalents includes US$0.4 million (31 December 2023: US$0.3
million) of cash collateral on the Orabank revolving facility. The cash
collateral was at a value of XOF216.0 million (31 December 2023: XOF210.0
million).
Amounts held for debt service represents Naira denominated cash balances which
are held by the Group for debt service, and this has been separately disclosed
from Cash and cash equivalents.
14. Trade and other payables
30 June 31 December 2023
2024
US$'000 US$'000
Unaudited Audited
Trade payables 24,701 26,461
Accruals 25,328 29,273
VAT and WHT payable 17,271 16,601
Royalty and levies 6,821 6,815
Employee benefits 20 35
Financial liability 19,328 19,328
Other payables 5,144 9,487
Trade and other payables 98,613 108,000
Other payables - non-current
Employee benefits 1,422 2,030
1,422 2,030
100,035 110,030
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.
15. Borrowings
30 June 31 December 2023
2024
US$'000 US$'000
Unaudited Audited
Revolving credit facility 8,888 11,376
Bank loans 334,945 345,849
Senior Secured Notes 88,033 86,626
Other loan notes 144,177 136,817
576,043 580,668
30 June 31 December 2023
2024
US$'000 US$'000
Unaudited Audited
Current borrowings 146,124 367,199
Non-current borrowings 429,919 213,469
576,043 580,668
16. Contract liabilities
Contract liabilities represent the value of gas supply commitment to the
Group's customers for gas not taken but invoiced under the terms of the
contracts. The amount has been analysed between current and non-current, based
on the customers' expected future usage gas delivery profile. This expected
usage is updated periodically with the customer.
30 June 31 December 2023
2024
US$'000 US$'000
Unaudited Audited
Amount due for delivery within 12 months 14,677 17,654
Amount due for delivery after 12 months 360,765 346,490
375,442 364,144
30 June 31 December 2023
2024
US$'000 US$'000
Unaudited Audited
As at 1 January 364,144 331,810
Additional contract liabilities 15,793 48,378
Contract liabilities utilised (7,012) (24,871)
Unwinding of discount on contract liabilities 2,517 8,827
As at end of period 375,442 364,144
The unwinding of the discount on contract liabilities relates to the fair
value adjustments made under IFRS 3: Business Combinations following the
acquisition of the Nigerian assets and entities in 2019. The fair value
adjustment was calculated as the discounted, expected cost of the future
deliveries of gas volumes under the terms of customer take-or-pay contracts.
This discounted amount unwinds relative to an apportioned amount of the
contract liabilities volumes at the date of acquisition that have subsequently
been utilised.
17. Cash flow reconciliations
The changes in the Group's liabilities arising from financing activities can be classified as follows:
Borrowings Interest payable Lease liabilities Total
US$'000 US$'000 US$'000 US$'000
At 1 January 2024 (audited) 580,668 136,091 4,796 721,555
Cash flows
Proceeds 39,018 - - 39,018
Repayment (47,236) (56,644) (467) (104,347)
(8,218) (56,644) (467) (65,329)
Non-cash adjustments
Payment in kind adjustment/accretion of interest 9,563 21,578 61 31,202
Net debt fees (760) - - (760)
Re-estimation of lease liability - - (773) (773)
Foreign translation (5,210) (99) 36 (5,273)
Balance at 30 June 2024 (unaudited) 576,043 100,926 3,653 680,622
Borrowings Interest payable Lease liabilities Total
US$'000 US$'000 US$'000 US$'000
At 1 January 2023 (audited) 645,789 105,600 5,079 756,468
Cash flows
Repayment (73,783) (28,545) (484) (102,812)
(73,783) (28,545) (484) (102,812)
Non-cash adjustments
Payment in kind adjustment/accretion of interest 9,723 32,694 136 42,553
Net debt fees 56 - - 56
Borrowing fair value adjustments 543 - - 543
Working capital movements - - 80 80
Foreign translation (3,301) (115) 140 (3,276)
Balance at 30 June 2023 (unaudited) 579,027 109,634 4,951 693,612
18. Capital commitments
At 30 June 2024, capital commitments amounted to US$0.5 million (30 June 2023:
US$6.6 million).
19. Discontinued Operations
As outlined in Note 2 Accounting Policies - Basis of Preparation, the Group
has classified all of the activities associated with the Chad Assets as a
discontinued operation in accordance with IFRS 5. In the six months ended 30
June 2024, no further transactions were recorded within discontinued
operations.
Summarised in the table below for the six months ended 30 June 2023 were the
trading results from the Chad Assets up to the date of the Nationalisation (31
March 2023), together with a (total pre-tax) impairment loss of US$12.4
million (excluding an associated tax credit reversal which amounted to US$32.2
million).
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Revenue - 76,560
Cost of sales - (4,452)
Gross profit - 72,108
Administrative and other operating expenses - (84)
Operating profit - 72,024
Share of profit from associates - 575
Foreign translation loss - (501)
Net impairment of SCI - (6,850)
Impairment of associate - Tchad Oil Transportation Company (TOTCo) - (5,500)
Profit before tax - 59,748
Tax credit - 32,214
Net profit and total comprehensive profit from discontinued operations - 91,962
The net cash flows from the discontinued operations are as follows:
2024 2023
US$'000 US$'000
Six months ended 30 June Unaudited Unaudited
Net cash generated from operating activities - 33,738
Net cash used in investing activities - (10,441)
Net cash used in financing activities - (16,779)
Net cash inflow - 6,518
20. Contingent liabilities
As set out in Note 2, the impact of the Nationalisation of the Chad Assets has
resulted in the Group not being able to determine liabilities within its
subsidiary, SCI, as to both type and quantum. The consequences of the
Nationalisation Law for SCI will be established by an arbitration which SCI
commenced during 2024 against the Republic of Chad. Based upon the legal
advice received and the Group's inability to sufficiently identify and
quantify, through any reasonable means, the liabilities associated with SCI or
the Chad Assets, the Directors believe that these should be considered as
contingent liabilities in line with the requirements of IAS 37: Provisions,
Contingent Liabilities and Contingent Assets.
As reported in the Group's 2023 Annual Report there are conditions remaining
to the completion of the sale of the 10% interest in COTCo to Société
Nationale Des Hydrocarbures (SNH) and if the sale is completed it could result
in a tax liability. Given the uncertainty surrounding the completion, the
impact of the above arbitrations and the shareholder dispute, it is not
possible to properly assess if any tax liability will arise.
21. Events after the reporting date
There are no events after the reporting date other than those described within
this announcement.
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