LONDON (ShareCast) - (Sharecast News) - British independent oil and gas firm Savannah Petroleum has received a one-year extension to its R1/R2 production sharing contract (PSC) with the government of Niger, the company announced on Thursday.
The extension is in reference to the first phase of the AIM-traded company's exclusive exploration authorization (EEA) under the PSC and has been granted in accordance with provisions set out in Niger's petroleum code.

Following the extension, the first phase will now expire on 5 August 2019 and the following two phases lasting a further two years each.

The R1 and R2 production sharing contract was awarded to Savannah Petroleum in July 2014 and covers areas in the north of the Agadem Rift Basin.

8% of the area has been covered by modern 3D seismic data, upon which Savannah has identified 15 drill-ready exploration prospects, while 42 exploration leads have been identified along the northern flanks based on 2D seismic data of varying vintages.

Andrew Knott, chief executive of Savannah Petroleum, said: "Following our recently announced Bushiya discovery in the R3 section of the R3/R4 PSC area, we are pleased to have been granted this extension. Whilst no firm decisions have been made at this stage, the extension provides us with greater flexibility to plan potential additional 2018 drilling activities, unconstrained by PSC timing issues."

On 23 April, the company announced the discovery of an estimated 10 metres of net oil bearing reservoir sandstones across two intervals at the Bushiya-1 exploration well on the R3 area.

"We look forward to providing our stakeholders with updates on our forward plans in this regard over the course of the coming months. As ever, we remain grateful to The Ministry of Petroleum of Niger for the support they have provided the Company, and in providing this extension to the R1/R2 PSC," said Knott.

As of 1121 BST, Savannah Petroleum's shares were up 3.33% at 31.00p.

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