Savannah targets first oil in 2019

02 October 2018, Week 39, Issue 757

Savannah intends to test its Amdigh-1 well in December, the company said last week. An electric submersible pump (ESP) will be installed in the Nigerien well, using a workover rig from Great Wall Drilling Co. Niger. 

A proposed early production scheme (EPS) on the development of 52 million barrels, could begin producing in the first quarter of 2019, focused on the Amdigh field. This would involve output of around 1,000 bpd, ramping up to 5,000 bpd over the year. Spending to achieve first oil is projected to be less than US$5 million. The EPS will take resources discovered on the R3 portion of the company’s R3/R4 licence, in the Agadem Rift Basin. 

A pre-feasibility study on the EPS will be submitted to the government by November 6. The facilities will allow future fields – Bushiya, Kunama and Eridal – to be tied into the EPS. Oil from the project will initially be trucked to the Jaouro export station, from where it will be introduced into the 463 km Agadem-Zinder pipeline, which runs to the Societe de Raffinage de Zinder (SORAZ) refinery. A pipeline with capacity of up to 10,000 bpd will be laid in 2019 to replace the truck route. 

The company has made four discoveries from four wells, Savannah’s CEO, Andrew Knott, said “and have established clear pathways for their monetisation through both domestic and export sales”. The four wells are Bushiya-1, Amdigh-1, Kunama-1 and Eridal-1, with the first drilled in March. 

Savannah is in the process of drilling the Zomo-1, with results due to be announced shortly, it said last week. The company has options for another four wells. 

The Nigerien Ministry of Energy and Petroleum has completed a pre-feasibility study on a second export pipeline, running to the Benin coastline. A feasibility study should be completed by the end of this year, with first oil exports in 2021. Niger has previously signed a memorandum of understanding (MoU) on a pipeline running to a refinery in Nigeria. 

Another 120 exploration targets have been identified on its blocks in Niger. Most of these are in the Sokor Alternances trend, which will be the main focus of the company’s drilling plans, primarily on R3. 

 

Lender lined up

Savannah Petroleum has signed up a US$50 million debt facility from an unnamed Geneva-based trader. In a statement on September 28, the company said this was made up of an initial amount of US$20 million, with an additional uncommitted amount of US$30 million. 

Interest payable on the debt has been set at LIBOR plus 6%, with interest payments made on a yearly basis. In addition, there is a US$1 million fee on the first use of the debt. The facility will run for three years. 

The cash is secured with a right of first refusal for Savannah’s oil trading for five years, covering activities in Nigeria – although excluding those connected to Seven Energy – and in Niger. 

As of the end of June, Savannah had US$11.7 million in cash. 

Edited by

Ed Reed

Editor

Any questions? Please get in touch