Savannah Petroleum PLC
29 July 2014
29 July, 2014
Savannah Petroleum Plc
("Savannah" or "The Company")
Intention to Float on the AIM Market of the London Stock
Exchange
Savannah Petroleum, the Niger focused oil and gas company, today
announces its intention to proceed with an initial public offering
(the "IPO" or "Offer") and to apply for admission of its ordinary
shares to trading on the AIM of the London Stock Exchange.
Savannah is involved in the exploration, appraisal and
anticipated eventual development and production of conventional oil
deposits located in the R1/R2 PSC area, which represents a
significant oil and gas exploration licence in Niger, West
Africa.
Highlights:
-- The primary Eocene oil exploration target in the R1/R2 PSC
Area has been estimated by leading geoscience consultancy, CGG
Robertson, to contain "Best Estimate" risked gross prospective
resource of 573 mmbbls (un-risked: 819 mmbbls), of which 544mm bbls
(un-risked: 778mmbbls) are net to the Company
-- CGG Robertson also recognised substantial upside potential in
the deeper Upper Cretaceous, Lower Cretaceous and Palaeocene
horizons
-- The R1/R2 PSC Area covers 30.5 per cent. of the original
Agadem permit under the CNPC PSC, which has seen an estimated 77
discoveries having been made from 99 exploration wells over the
past five years
-- Niger has demonstrated its receptiveness to inward investment
and to the development of the country's oil and gas resource,
enabling CNPC to deliver first oil for Niger approximately three
years after acquisition of the original Agadem permit
-- The Company has an experienced management team with extensive
developing country oil and gas industry experience and with a broad
range of technical, operational and financial skills
-- Savannah intends to create value by maintaining a strong
focus around the exploration and appraisal of the resource in the
R1/R2 PSC Area.
The Company is, among western companies, an early mover into
this emerging oil and gas province, which is expected to see
significant oil and gas infrastructure build-out over the coming
years led by the Asian national oil companies CNPC and CPC
Corporation (Taiwan).
Savannah is proposing to raise approximately GBP29.3 million
(approximately US$50.0 million) through the issue of 52.3 million
new Ordinary Shares at 56 pence per share. The net proceeds of the
placing will principally be used to allow the Company to undertake
its planned exploration programme, which includes the acquisition
of full tensor gravity and significant seismic surveys over the
R1/R2 PSC Area.
Commenting, Steve Jenkins Chairman of Savannah Petroleum,
said:
"Savannah Petroleum is a company with a great asset and an
experienced board and management team, and I am excited to be
appointed Chairman. The foundations for future growth are in place,
and with a busy work programme focused on the exploration and
appraisal of the Company's PSC area, Savannah has a real
opportunity to unlock and realise substantial value for Niger and
shareholders alike."
Andrew Knott, CEO of Savannah Petroleum, said:
"Following the signature of the R1/R2 PSC on July 3 2014,
listing on AIM marks another significant milestone for Savannah
Petroleum and a platform from which we can develop our asset base
and create value for our stakeholders. We have been delighted with
the interest shown in our business by the institutional investment
community. I would like to thank our Pre-IPO investors and new
shareholders for making their investments in Savannah. The high
quality of our investor base is a testament to the exciting
opportunity that Savannah presents. I would also like to thank our
advisory banks and Burness Paull for their support over the last
year, without whom we would not be in this position today."
Mirabaud Securities LLP acted as Global Co-ordinator and Joint
Bookrunner, Renaissance Capital Limited acted as Joint Bookrunner,
FirstEnergy Capital LLP acted as Joint Lead Manager and Ladenburg
Thalmann & Co. Inc. acted as U.S. Placing Agent to the Placing
and Strand Hanson Limited acted as Financial and Nominated Adviser
in connection with the Placing and Admission.
Capitalised terms used in this announcement carry the same
meaning as that ascribed to them in the AIM Admission Document
dated 29 July 2014, unless the context requires otherwise.
For further information contact:
Savannah Petroleum
Andrew Knott
Steve Jenkins +44 (0)20 3102 6896
Strand Hanson (NOMAD)
Rory Murphy
James Spinney
Ritchie Balmer +44 (0) 20 7409 3494
Mirabaud (Broker)
Peter Krens +44 (0) 20 7878 3362
Bell Pottinger (PR)
Mark Antelme
Philip Dennis +44 (0)20 7861 3800
Notes to Editors
Savannah Petroleum is a UK oil and gas company focused on the
exploration, appraisal and anticipated eventual development of the
R1/R2 Production Sharing Contract in Niger. Savannah intends to
systematically execute its long-term business plan to maximise the
value of the R1/R2 PSC for its stakeholders. This will initially
encompass a geological survey phase, with exploration drilling
activity expected to commence in 2015. Savannah's experienced Board
and Management team, including Chairman Steve Jenkins and Director
David Jamison, have many years' experience in establishing, growing
and ultimately monetizing exploration and production companies.
Background
Savannah is a public limited company. It was incorporated in the
UK on 3 July 2014 and is the holding company of the Group which was
originally formed in July 2013 and which operates from offices in
London, UK, and Niamey, Niger. The Company's current principal
business is the exploration, appraisal and eventual development and
production of conventional oil deposits located in the R1/R2 PSC
Area.
The R1/R2 PSC Area represents a significant oil and gas
exploration licence in Niger. On 3 July 2014, the Company's 95%
owned Niger subsidiary, Savannah Niger R1/R2 S.A. entered into a
Savannah PSC with the State of Niger to acquire a 100% working
interest in the R1/R2 PSC Area for which it is required to pay a
signature bonus.
The Blocks were formerly part of the original permit in the
Agadem Area of South East Niger operated by CNPC, 50% of which CNPC
mandatorily relinquished in June 2013 in accordance with the terms
of the CNPC PSC.
The Board
The board and the Company's senior management have significant
experience in establishing, growing, financing and subsequently
monetising early stage oil & gas companies.
Following Admission, Savannah is chaired by Steve Jenkins. Steve
is widely recognised as one of the most capable oil and gas
executives in the UK, having delivered for his investors as CEO of
Nautical Petroleum a GBP414 million sale to Cairn Energy in Q3
2012. Prior to Nautical Petroleum, Steve held a variety of roles in
Nimar Petroleum, a private Saudi Arabian company with extensive
global exploration and production interests. Steve is a geologist
by profession and is currently Chairman of the Oil and Gas
Independents Association, Circle Oil plc, Franklin Petroleum Ltd
and Terrain Energy Ltd.
The Company's executive management is headed by its Chief
Executive Officer and principal founder, Andrew Knott. Andrew has
held leading roles in the European oil and gas sector for the last
decade and has extensive energy and investment experience across
emerging markets. Andrew was previously Head of Global Energy
Investments for GLG Partners / MAN Group which, at December 2012,
was the largest listed hedge fund in the world by assets. Prior to
GLG Partners, Andrew held various roles at Merrill Lynch and
Dresdner Kleinwort Wasserstein.
On Admission, the other non-executive Board members will be
David Jamison and Mark Iannotti. David was a founding partner and
first managing director of (the modern day) Vitol, one of the
largest private oil and gas companies in the world. Mark has
enjoyed a 20 year career in equity capital markets, largely focused
around the oil and gas sector. Until July 2013, Mark was a member
of Bank of America Merrill Lynch's EMEA Executive Committee.
R1 / R2 PSC Area
The key observations and conclusions of the assessment of the
R1/R2 PSC area made by CGG Robertson are as follows:
-- An active petroleum system has been demonstrated in the
Agadem Basin, with all elements (source rock, maturity and
migration, reservoir rocks and trapping structires) present within
the Eocene section
-- 2P reserves of over 800mmbbls have been identified by CNPC in
the more heavily faulted flanks of the basin, in up to 82 separate
discoveries in Eocene reservoir sands. The R1 licence block, in the
northwest part of the basin, is expected to be geologically very
similar.
-- The R2 licence block is more axial within the Agadem Basin,
and appears to be less faulted in the Eocene section, although some
broad structures can be seen. The Eocene petroleum system is
expected to be fully operative in the area and, although there may
be fewer accumulations in this block, they could be much larger
than in R1
-- Additional potential exists in the Palaeocene and Cretaceous
sections of the basin and may be particularly important on the R2
licence block
-- "Best Estimate" gross resource potential on a risked basis
for the R1 block is estimated to be 316mmbbls, with 300mmbbls net
to the Company
-- The corresponding estimate for the R2 Block is 275mmbbls, with 245mmbbls net to the Company
CGG Robertson has applied the Petroleum Resource Management
System (SPE 2007) as the Standard in its evaluation and has
designated these Risked resource volumes as the Prospective
Resource potential for the two licence blocks.
Niger/Agadem Overview
Niger is landlocked country located in West Africa. It has a
population over 17 million people and substantial mineral resource,
yet remains one of the most underdeveloped countries in the world
with an average GDP per capita of US$395. Niger is a constitutional
democracy with a fast growing economy and western-facing
government. GDP is forecast to grow by the World Bank by 6.2% in
2014 and 6% in 2015.
Exploration activities in the Agadem region of Niger have been
ongoing since the 1970s. Between 1974 and 2004, five discoveries
were made from a total of 25 exploration wells, all of which were
drilled based on 2D seismic backed geological models. Companies
active at that time included Elf, Texaco, Conoco, Esso and
Petronas.
In 2008, CNPC acquired the exploration rights to the Agadem
production sharing contract through paying a US$300m signature
bonus to acquire the five existing discoveries and the exploration
rights to the area for eight years. Over the period 2008-2013, CNPC
made an additional 77 discoveries and established an 832mmbbl
reserve base for the permit (having adopted a primary 3D seismic
driven exploration model). In doing so, CNPC clearly demonstrated
the pro-business environment of Niger, given the magnitude of the
work programme pursued in a relatively short period of time. First
production from the CNPC PSC licence area (and the country) was
achieved in 2011. CNPC completed the sale of 20% of the licence to
CPC Corporation (the Taiwanese national oil company) in early 2013.
CNPC's official target date for commencing exports is 2016.
Reasons for Admission and use of proceeds
To provide:
-- the Company with the required capital to enable it to
initiate its planned exploration programme in the R1/R2 PSC
Area;
-- Savannah with the required capital to repay any outstanding debts;
-- the required capital to establish an office and operations in Niger;
-- access to a wider range of potential investors and broaden the investor base;
-- a flexible financial structure for further development, both
organically and via potential acquisitions or join ventures;
-- a high level of transparency and corporate governance;
-- a higher profile for the Company and assist in recruiting,
retaining and incentivising skilled employees;
-- an enhanced reputation and financial standing with key
partners and suppliers and with potential vendors of additional
assets
This information is provided by RNS
The company news service from the London Stock Exchange
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