Savannah Petroleum PLC, the British independent oil and gas company focused around activities in West Africa, is this morning pleased to announce an update on the Seven Energy Transaction and on operations at the Seven Assets in South East Nigeria.

Transaction Update

Good progress continues to be made in relation to the satisfaction of the relevant conditions precedent ahead of the completion of the Transaction, including, inter alia, Ministerial Consent. It is currently anticipated that the Implementation Agreement, which documents the final legal terms and steps which will be taken to effect the Transaction, will be executed by the interested parties by the end of July 2018. Savannah continues to progress the relevant documentation with all relevant stakeholders to achieve this objective. The Transaction is now expected to complete in the third quarter of 2018, and will be followed in due course by the publication of a Supplemental Admission Document.

Production Update

Average daily production from the Seven Assets for the January – May 2018 period has been 18.8 kboepd (gross). Gas production levels in April and May were lower than that achieved in the first quarter of the year due to a maintenance programme conducted at the Calabar National Integrated Power Plant, one of Accugas’ three principal gas supply customers. It is anticipated that gas production levels in the second half of the year will return to those achieved in Q1.

Gas from the Uquo field is sold via Accugas to three principal customers through gas sales agreements (“GSAs”), with take-or-pay volumes under the GSAs set at 152 mmscfd (25.3 kboepd). Gas production in the January – May 2018 period averaged 95 mmscfd (15.9 kboepd, gross), with a peak delivery rate of 156 mmscfd (26.0 kboepd, gross).

Strong operational performance at the Seven Assets has been sustained, with uptime at the Uquo CPF and the Stubb Creek EPF of 100% over the five-month period to end May 2018. Field gas production capacity remains capable of delivering at least 176mmscfd (29.3 kboepd, gross).

Accugas Business Development

Accugas continues to progress plans to add additional customers to the pipeline network. To this end, Accugas has sought permission to commence right of way work to extend its existing pipeline network into the Calabar Free Trade Zone, to enable the supply of gas to a new suite of industrial customers. As previously disclosed, the addition of new industrial customers is expected to be at a significantly higher pricing point than that which is currently being realised (c.US$3.5/mcf). There are compelling economics associated with gas replacing diesel, which is currently priced at greater than US$10/mcfe in South East Nigeria.