Paragraph 1: Savannah Energy’s Strong Financial Performance in Q1 2025
Savannah Energy commenced 2025 with a robust financial performance, reporting a 19% surge in total revenue for the first quarter, reaching $73.3 million compared to $61.4 million in Q1 2024. This growth was primarily fueled by the successful acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC) and the expansion of the Stubb Creek oil field, which collectively contributed approximately $3.6 million to the overall revenue. The company also experienced a 6% increase in cash collections, reaching $124.8 million in Q1 2025, up from $117.7 million in the same period the previous year. This positive financial momentum demonstrates the immediate benefits of the SIPEC acquisition and the efficacy of Savannah Energy’s operational strategies.
Paragraph 2: Improved Liquidity and Debt Management
Savannah Energy’s financial health further strengthened during Q1 2025, as evidenced by a significant improvement in its cash position and a reduction in net debt. The company’s cash balances as of March 31, 2025, stood at $110.4 million, a substantial increase from $32.6 million at the end of 2024. Concurrently, net debt decreased to $597.8 million from $636.9 million at the end of 2024. This decrease included the debt associated with the SIPEC acquisition; excluding this, the net debt would have been even lower, at $570 million. These figures highlight Savannah Energy’s prudent financial management and its ability to leverage acquisitions for growth while maintaining a healthy balance sheet.
Paragraph 3: Operational Highlights and Production Growth in Nigeria
Savannah Energy’s operational activities in Nigeria during Q1 2025 were marked by increased production and a focus on expansion projects. The company’s average gross daily production in Nigeria reached 23.6 thousand barrels of oil equivalent per day (kboepd). Following the SIPEC acquisition, production at the Stubb Creek oil field saw a 15% increase, reaching 3.1 thousand barrels of oil per day (kbopd) in April 2025, compared to 2.5 kbopd in Q1 2024. This improvement is attributed to the commencement of an 18-month expansion program at Stubb Creek, which is anticipated to further boost gross production to approximately 4.7 kbopd.
Paragraph 4: Reserve Upgrades and Development Projects
Savannah Energy reported significant upgrades to its oil reserves, reflecting the positive impact of enhanced field monitoring and reservoir modelling techniques. At the Stubb Creek field, Gross 1P (Proven) oil reserves increased by an impressive 197%, while Gross 2P (Proven and Probable) reserves rose by 29%. This echoes a similar upward revision of 27% in Gross 2P Reserves at the Uquo Field announced in 2021. These reserve upgrades underscore the company’s commitment to maximizing the value of its assets through advanced technological applications and a deeper understanding of its reservoirs. Furthermore, a $45 million compression project at the Uquo Central Processing Facility (CPF) neared completion, with one compressor already operational and the second scheduled for commissioning in the near future. This project, expected to be delivered under budget, will optimize production from both existing and future gas wells at Uquo.
Paragraph 5: Future Drilling Campaigns and Exploration Potential
Savannah Energy is actively preparing for a two-well drilling campaign at the Uquo Field, slated to commence in Q4 2025. Preparatory work, including well site and flowline surveys, has already been completed for the Uquo NE development well. This well is projected to contribute significantly to gas production, with an estimated output of up to 80 million standard cubic feet per day (MMscfd). In addition to the Uquo NE well, the company is considering an additional exploration well in the Uquo Field, potentially to be drilled concurrently. This exploration well, targeting the Uquo South prospect, has the potential to uncover substantial incremental prospective gas resources, further enhancing the company’s production capacity and long-term growth prospects.
Paragraph 6: CEO’s Perspective and Strategic Outlook
Andrew Knott, CEO of Savannah Energy, expressed satisfaction with the Q1 2025 results, highlighting the company’s progress towards its key objectives. He emphasized the strong revenue growth, robust cash collections, and the production increase at the Stubb Creek oil field following the SIPEC acquisition. Mr. Knott also highlighted the significance of the upcoming Uquo Field drilling campaign, which holds the potential to add substantial reserves, resources, and production capacity, contributing to the company’s future growth and profitability. The CEO’s comments reflect confidence in Savannah Energy’s strategic direction, which focuses on leveraging existing assets, pursuing strategic acquisitions, and exploring new opportunities for growth in the energy sector.
