LONDON (ShareCast) - (Sharecast News) - Africa-focussed Savannah Energy updated the market on its trading in 2020 on Monday, reporting total revenues of $235.9m, up 23% on 2019 and ahead of its previously-issued guidance for at least $200m.
The AIM-traded firm said its group cash balance stood at $106.0m at period end, up 121% year-on-year, and net debt of $408.7m, down 16%.

Total cash collections from its Nigerian assets rose 11% year-on-year to $187.4m, and the board reiterated its guidance on the remaining items to report for the year ended 31 December.

That guidance included group depreciation, depletion and amortisation guidance of between $35m and $37m, and group administrative and operating costs guidance of between $43m and $47m.

Capital expenditure guidance for 2020 was modified to less than $13m, from a previous $8m to $10m, primarily due to the acceleration of previously-assumed 2021 expenditure into 2020 for commercial reasons.

In Nigeria, the company reported average gross daily production of 19,500 barrels of oil equivalent per day, making for a 13.5% increase year-on-year, and at the midpoint of its gross production guidance range for 2020 of 19,000 to 20,000 barrels of oil equivalent per day.

Of the 2020 total average gross daily production of 19,500 barrels of oil equivalent per day, 88% was gas, including a 16.6% increase in production from the Uquo gas field compared to last year, to 102.8 million standard cubic feet per day.

For 2021, Savannah issued guidance for total revenues of at least $205m from upstream and midstream activities associated with the company's three active Nigerian gas sales agreements and liquid sales from its Stubb Creek and Uquo fields.

Any revenues received from new additional gas sales agreements would thus be incremental to that.

Group administrative and operating costs were expected to be between $55m and $65m, while group depreciation, depletion and amortisation would be $19m fixed for infrastructure assets plus $2.60 per barrel of oil equivalent.

Group capital expenditure was expected to be up to $65m.

"As this trading update demonstrates, despite the challenging headwinds, 2020 was a milestone year for Savannah Energy," said chief executive officer Andrew Knott.

"It was our first full year of operating the high margin assets we acquired in Nigeria and I am delighted to report that we have significantly exceeded all of the original financial guidance we presented to the market this year, as laid out in our corporate key performance indicator statement published within our 2019 annual report.

"In 2020 we grew revenues, reduced our underlying cost base and continued to provide gas contributing to over 10% of Nigeria's daily national average power generation, highlighting the resilience of the business."

Knott said that looking to 2021, the company was guiding for continued strong revenue generation, investments in key drilling and compression projects and an increased level of maintenance project activity over 2020.

"Overall we have reduced our cost estimate for our indicative 2020-2023 capital expenditure programme by around 13%, versus our previous indications and are guiding that we expect our underlying operating costs, which include maintenance expenditures, to track levels consistent with 2020 in real terms over the medium term.

"It should also be noted that our 2021 guidance excludes contributions from any new gas sales agreements or any contribution from the R3 East development project in Niger, which would be incremental to this.

"I am excited around the potential for our business to grow further over the coming years, especially given the opportunity-rich West African environment in which we operate, and look forward to keeping our stakeholders up to date on the progress we make."

At 1003 GMT, shares in Savannah Energy were up 7.14% at 15p.

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