# Savannah Energy reports first gas from Uquo 13 and higher Stubb Creek production

- Link: https://www.directorstalkinterviews.com/savannah-energy-reports-first-gas-from-uquo-13-and-higher-stubb-creek-production/4121261145
- Published: 2026-08-25T08:03:29+01:00
- Author: Amilia Stone

**Savannah Energy PLC **(LON:SAVE), the British independent energy company focused
around the delivery of _Projects that Matter,_ has provided the following trading
update for the seven months to 31 July 2026. All figures are unaudited.

> **Andrew Knott, CEO of Savannah Energy, said:**
> _“Savannah continues to make strong progress against the nine core focus areas
> we set out for the business at the start of 2025._
> _In Nigeria, I am particularly pleased that Uquo 13, formerly known as Uquo NE,
> has achieved first gas and is on stream, after having successfully been tested
> at approximately 50 MMscfd. We are also currently completing the Uquo South exploration
> well, where we have discovered gas in most of the targeted reservoirs. Following
> completion of the well, we will undertake further testing and evaluation to assess
> the significance and potential resource implications of the discovery._
> _At Stubb Creek, our production expansion programme continues to deliver, with
> average gross daily production increasing by 29% year-on-year to 3.7 Kbopd for
> the first seven months of 2026 and exceeding 5.0 Kbopd for July. The programme
> as a whole is targeting annual average gross production of up to 4.7 Kbopd._
> _Financially, we have maintained a strong momentum in cash collections in the 
> year to date, with collections increasing by 13% year-on-year to US$247.9 million
> for the first seven months of 2026. Revenue increased by 10% over the same period,
> while our Trade Receivables balance has reduced by 22% since year-end 2025 to 
> US$394.6 million. We have also strengthened our financial flexibility through 
> the increase of the Stubb Creek Reserve Based Lending facility (the “RBL Facility”)._
> _Looking ahead, our focus is on delivering further operational progress from our
> existing asset base, including the testing and evaluation of Uquo South and the
> continued expansion at Stubb Creek, while actively pursuing value-accretive acquisition
> opportunities across both hydrocarbons and power.”_

**Highlights**

_Operational_

·     Drilling and completion activities at the Uquo 13 well location have been 
concluded. The well was tied back to the Uquo Central Processing Facility (“CPF”),
achieved first gas in July and is on stream, after having successfully been tested
at approximately 50 MMscfd;

·      The Uquo South exploration well spudded in early August 2026 and is currently
being completed. Gas has been confirmed in most of the targeted reservoirs through
pressure measurements, fluid sampling and logging. The Uquo South discovery is expected
to be fully evaluated following completion of the well and the planned testing programme;

·      Following completion of the SIPEC Acquisition in March 2025, the production
expansion programme underway at Stubb Creek has delivered a 29% year-on-year increase
in average gross daily production to 3.7 Kbopd for 7M 2026 (7M 2025: 2.8 Kbopd).
Average production in July 2026 was in excess of 5.0 Kbopd;

·      Group average gross daily production was 16.3 Kboepd for 7M 2026 (FY 2025:
18.8 Kboepd). With Uquo 13 now on stream, average gross daily production is expected
to exceed 20 Kboepd over the remaining five months of the year, with FY 2026 average
gross daily production anticipated to be in the range of 18-20 Kboepd, including
further upside potential from the Uquo South exploration well^(1); and

·      Actively reviewing opportunities in both the oil and gas and thermal and 
renewable power sectors, with the expectation of announcing transaction(s) over 
the course of the next 24 months.

_Financial (unaudited)_

·     Stubb Creek RBL Facility increased to US$130.0 million, with the tenor extended
to August 2031 and margin reduced to 7.5% per annum;

·      7M 2026 cash collections increased by 13% year-on-year to US$247.9 million(
7M 2025: US$219.2 million);

·      7M 2026 Revenue increased by 10% year-on-year to US$160.6 million (7M 2025:
US$146.0 million);

·     As at 31 July 2026, cash balances totalled US$62.0 million (31 December 2025:
US$42.7 million) and net debt stood at US$672.0 million (31 December 2025: US$658.8
million); and

·     Trade Receivables balance as at 31 July 2026 was US$394.6 million, a 22% reduction
on year-end 2025 (31 December 2025: US$508.5 million).

_[Sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)_

·      Published the Sustainability Review 2025;

·      Published Savannah’s first disclosure report in accordance with IFRS S1 and
S2; and

·      Published Savannah’s Sustainability Accounting Standards Board (“SASB”) 2025
disclosure report.

**Operational Update**

Drilling of the Uquo 13 development well commenced in early April 2026 and was successfully
completed at the end of May 2026. The well was subsequently tied back to the Uquo
CPF, achieved first gas in July 2026 and is on stream, after having successfully
been tested at 50 MMscfpd. The Uquo South exploration well was spudded in early 
August 2026 and is currently being completed. Gas has been discovered in most of
the targeted reservoirs, with the potential resource implications of the discovery
to be assessed following completion of the well and the subsequent well testing 
and evaluation programme. The well was targeting an unrisked gross GIIP of 131 Bscf
and, subject to the results of the well testing programme, has the potential to 
provide incremental gas resources within the Uquo licence area.

Following completion of the SIPEC Acquisition in March last year, the Stubb Creek
expansion programme continues to progress well, already delivering a 29% year-on-
year increase in average gross daily production to 3.7 Kbopd in 7M 2026. The full
programme, expected to take up to 24 months, is anticipated to raise annual gross
production to as much as 4.7 Kbopd. The Front-End Engineering and Design phase of
the expansion programme has been completed, while we are planning the execution 
phase, with the expected signing of an Engineering, Procurement and Construction
contract by the end of 2026. In parallel, early works have been fast-tracked to 
support an accelerated production ramp-up ahead of the broader expansion programme,
with average production in July 2026 in excess of 5.0 Kbopd.

Average gross daily production was 16.3 Kboepd for 7M 2026 (FY 2025: 18.8 Kboepd),
of which 77% was gas (FY 2025: 83%)^(1). With Uquo 13 now on stream, average gross
daily production is expected to exceed 20 Kboepd over the remaining five months 
of the year, with further upside depending on the success of the Uquo South exploration
well. Savannah expects FY 2026 average gross daily production to be in the range
of 18-20 Kboepd.

The Company continues to engage with the Government of Niger in relation to the 
R1234 PSC and the forward work programme. These discussions are aimed at resolving
disputed issues arising under this contract and notably cover the contractual and
operational framework for recommencing activity, including the treatment of periods
during which operations have been materially constrained. The Company continues 
to reserve its rights under the R1234 PSC and is seeking to agree a mutually acceptable
basis with the Government for future operations. Work will only recommence on these
assets if, and when, the Company reaches such a satisfactory agreement with the 
Government.

**Financial Update (unaudited)**

_7M 2026 Performance Highlights_

7M 2026 cash collections increased by 13% year-on-year to US$247.9 million (7M 2025:
US$219.2 million), while 7M 2026 Revenue rose by 10% year-on-year to US$160.6 million(
7M 2025: US$146.0 million).

As at 31 July 2026 cash balances were US$62.0 million (31 December 2025: US$42.7
million) and net debt stood at US$672.0 million (31 December 2025: US$658.8 million).
Gross debt as at 31 July 2026 was US$734.0 million, of which only US$55.7 million(
8%) was recourse to the Company, with the balance sitting within subsidiary companies
on a non-recourse basis.

The Trade Receivables balance as at 31 July was US$394.6 million, a 22% reduction
on year-end 2025 (31 December 2025: US$508.5 million). This relates primarily to
amounts due under various gas sales agreements in Nigeria. Delivering an increase
in cash collections in Nigeria remains a key focus area for the business._

_Hedging_

Savannah implements a rolling hedging programme for Stubb Creek oil production to
ensure appropriate levels of cash flow in periods of oil price weakness. This strategy
is primarily achieved through purchasing put options together with some limited 
volumes of collars where appropriate. Savannah does not utilise swaps or other fixed
price instruments.

For H2 2026, Savannah has hedged 325,000 bbls of production using put options with
a weighted average strike price of US$52/bbl and a further 215,000 bbls of production
with collars with a weighted average floor price of US$59/bbl and weighted average
ceiling price of US$83/bbl. Over 80% of the forecast oil production for the next
12 months has unlimited oil price upside and the remainder has a ceiling price broadly
in line with the current average forecast oil price for the period.

_Stubb Creek RBL Facility_

Savannah Energy SC Limited (a wholly owned subsidiary of the Company) has signed
an amendment to the Stubb Creek RBL Facility, increasing the RBL Facility to US$
130.0 million and extending the final maturity date to August 2031. The Standard
Bank of South Africa Limited and Stanbic IBTC Capital Limited are the Mandated Lead
Arrangers of the RBL Facility.

**Arbitration Update**

Our wholly owned subsidiary, SCI, commenced arbitral proceedings in 2023 against
the Government of the Republic of Chad in response to the March 2023 nationalisation
of SCI’s rights in the Doba fields in Chad, and other breaches of SCI’s rights. 
Another wholly owned subsidiary, SMIL, commenced arbitral proceedings in 2023 in
relation to the nationalisation of its investment in TOTCo, 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 COTCo, the Cameroon company which owns and operates the section
of the Chad-Cameroon pipeline located in Cameroon. We currently expect these arbitral
proceedings to be concluded in H2 2026.

SCI and SMIL are claiming in excess of US$775 million (plus interest, which is currently
estimated at in excess of US$215 million, and costs) for the nationalisation of 
their rights and assets in Chad.^(2) SMIL has a claim valued at approximately US
$330 million (plus interest, which is currently estimated at in excess of US$67 
million, and costs) for breaches of its rights in relation to COTCo.^(3) Whilst 
the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to
compensation, no compensation has been paid 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, SCI and SMIL intend to vigorously pursue their rights in the
arbitration proceedings.

SCI is involved in further arbitral proceedings in which designates of Société des
Hydrocarbures du Tchad allege breaches by SCI of the Doba fields joint operating
agreement.^(4) SCI is defending the claims vigorously. We currently expect these
arbitral proceedings to be concluded in H1 2027.

**Capital Allocation**

As stated in the Company’s update on 4 February 2026, Savannah’s capital allocation
policy remains unchanged. The Company intends to allocate any excess capital to 
its highest risk-adjusted return investment opportunities, assessed against the 
potential to return capital to shareholders. In this context, the Company has authority,
granted by shareholders at the Annual General Meeting held on 1 June 2026, to purchase
up to 313,288,589 Ordinary Shares and may undertake share buybacks opportunistically,
subject to the Company being in an open period and not being in possession of inside
information, and having regard to corporate liquidity and prevailing market conditions.

**Update on FY 2025 Annual Report**

The Company currently expects to release its FY 2025 Annual Report in September 
2026. Pursuant to the requirements of AIM Rule 19, trading in the Company’s shares
will remain suspended until publication of the FY 2025 Annual Report.

**AIM Quotation Review Update**

As previously announced on 22 October 2025, the Board initiated a review of the 
appropriateness of Savannah’s admission to trading on AIM and the potential alternative
options available to the Company, including alternative listing venues or structures(
the “Review”). The Review remains ongoing and no decision has been taken by the 
Board in relation to its outcome. A further announcement will be made as and when
appropriate.

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