TIDMSAVE
RNS Number : 5699L
Savannah Energy Plc
30 April 2020
30 April 2020
Savannah Energy PLC
("Savannah" or "the Company")
Publication of Supplemental Admission Document
In line with previous announcements, Savannah Energy PLC, the
British independent energy company focused around activities in
Nigeria and Niger, is pleased to announce the publication of a
Supplemental Admission Document (the 'Document') relating to the
Seven Energy Transaction (the 'Transaction'). Completion of the
Transaction was announced on 15 November 2019.
Selected extracts from Part 1 of the Document: Information
Relating to the Company have been reproduced below. Shareholders
are however encouraged to read the Document in full.
In line with AIM Rule 14, following publication of the Company's
AIM Admission Document relating to the Transaction in December
2017, Shareholder approval was sought and granted at the Company's
General Meeting on 8 January 2018. No further shareholder votes in
relation to the Transaction are therefore required.
Strand Hanson Limited acted as Financial & Nominated Adviser
to the Company on the Transaction.
Mirabaud and Numis continue to act as joint brokers to the
Company.
The Document is available to download from the Company's website
in accordance with AIM Rule 20: www.savannah-energy.com
Andrew Knott, CEO of Savannah Energy, said:
"I am pleased to announce the publication of the Supplemental
Admission Document relating to the value accretive Seven Energy
Transaction. In this transaction, we were able to acquire a set of
high quality, cash flow generative assets, which transformed
Savannah into a full cycle E&P company, with a considerable
footprint in West Africa. We have made significant strides with the
assets to date and have a clear plan for growth laid out. We look
forward to providing further updates to shareholders on our plans
in Nigeria in due course."
For further information contact:
+44 (0) 20 3817
Savannah Energy 9844
Andrew Knott, CEO
Isatou Semega-Janneh, CFO
Sally Marshak, Communications
+44 (0) 20 7409
Strand Hanson (Nominated Adviser) 3494
James Spinney
Ritchie Balmer
Rory Murphy
+44 (0) 20 7878
Mirabaud (Joint Broker) 3362
Peter Krens
Ed Haig-Thomas
+44 (0) 20 7260
Numis Securities (Joint Broker) 1000
John Prior
Emily Morris
Alamgir Ahmed
+44 (0) 20 8434
Celicourt Communications 2754
Mark Antelme
Jimmy Lea
Ollie Mills
The information contained within this announcement is considered
to be inside information prior to its
release, as defined in Article 7 of the Market Abuse Regulation
No.596/2014 and is disclosed in accordance with the Company's
obligations under Article 17 of those Regulations.
Notes to Editors
Savannah Energy
Savannah Energy PLC is an AIM listed energy company with
exploration and production assets in Nigeria and Niger. In Nigeria,
the Company has controlling interests in the cash flow generative
Uquo and Stubb Creek oil and gas fields, and the Accugas midstream
business in South East Nigeria, which provides gas to approximately
10% of Nigeria's available power generation capacity. In Niger,
Savannah has interests in two large PSC areas located in the highly
oil prolific Agadem Rift Basin of South East Niger, where the
Company has made five oil discoveries and seismically identified a
large exploration prospect inventory, consisting of 146 prospects
and leads to be considered for potential future drilling
activity.
Further information on Savannah Energy PLC can be found on the
Company's website: www.savannah-energy.com
Selected extracts from Part 1: Information Relating to the
Company from the Document
Readers of the below should refer to the Document for
explanation of the defined terms included within the text, as well
as for the figures referred to in the text but not shown below.
1. Introduction
The Company is the holding company of the Enlarged Group and
currently operates from offices in the UK (London), Nigeria (Lagos,
Abuja, Eket and Uyo) and Niger (Niamey). The Enlarged Group in its
current form resulted from a reverse takeover transaction by the
Company, pursuant to Rule 14 of the AIM Rules for Companies, of the
Nigerian Assets. The Transaction is more fully described in this
Part 1 and Part 2 of this document.
The Company has two high-quality and high-growth business units
located in Nigeria and Niger. In Nigeria, following the
Acquisition, the Company has a significant interest in a
large-scale integrated gas production and distribution business
which is capable of supplying gas to c. ten per cent. of Nigeria's
power generation capacity. In Niger, the Company holds two
significant licences in the country's main petroleum basin.
The Company is a public limited company and was incorporated in
the UK on 3 July 2014. The Company was admitted to trading on AIM
on 1 August 2014 at the same time as raising approximately US$50
million in new equity. Since being admitted to trading on AIM, the
Company has raised a further US$203 million through the issue of
new Ordinary Shares, which funded the acquisition of the R3/R4 PSC,
further exploration activity on the Savannah PSCs (including the
acquisition/processing of 806 km(2) of 3D seismic and a five well
exploration drilling campaign which delivered a 100 per cent.
success rate) as well as the Acquisition.
Nigeria
The Company acquired the Nigerian Assets from Seven Energy in
November 2019 following completion of the Transaction.
The Nigerian Assets comprise interests in two large-scale oil
and gas fields, the Uquo Field and the Stubb Creek Field, with net
2P Reserves and net 2C Resources of 71.0 MMboe and 58.6 MMboe
respectively, and the Accugas Midstream Business. Gas produced from
the Uquo Field is processed and transported through Accugas's
infrastructure, which includes a 200 MMscfpd processing facility
and a c. 260km pipeline network connecting the Uquo Field to its
end user gas customers, including the Calabar and Ibom power
stations, that comprise ten per cent. of Nigeria's available power
generation capacity, and the Unicem cement factory.
Niger
The Company's licence interests in Niger are located in the
highly prospective Agadem Rift Basin in South East Niger covering
an area of approximately 13,655km(2) . The ARB is comparable in
scale to the North Sea rift system, and forms part of the Central
African Rift System. The Central African Rift System runs through
Niger, Chad, Sudan, South Sudan and also Nigeria, with over 6
bnbbls of oil discovered to date. The Company's interests, which
were acquired over the course of 2014 and 2015, cover c. 50 per
cent. of the ARB, and of the original Agadem PSC Area which was
compulsorily relinquished by CNPC in July 2013. Following a
successful exploration drilling programme in 2018 on the R3 East
portion of the R3/R4 PSC ("R3 East"), and in accordance with the
terms of the R3/R4 PSC, the Company relinquished the R4 area of
this PSC. The Company has agreed with the Ministry of Energy and
Petroleum that the R4 area will be combined with the R1/R2 PSC Area
into a new PSC, which would see the Group retaining the full
acreage position previously covered by the R1/R2 PSC and the R3/R4
PSC. As later described in this section, formalisation of this
arrangement is ongoing.
The Company has proven its ability to operate in Niger, having
acquired a 36,948km FTG Survey over the ARB as well as 806 km(2) 3D
seismic over part of the R3 portion of the R3/R4 PSC Area. In 2018,
Savannah launched its maiden exploration drilling campaign on the
R3 East portion of the R3/R4 PSC, delivering five discoveries from
five wells. The Company has a strong operational track record in
Niger, with all projects having been delivered with no lost-time
incidents and ahead of budgeted time. Current focus projects in
Niger are the delivery of first production and cash flows from the
planned R3 East early production scheme, and preparation for the
Company's next drilling campaign where further material resource
additions are expected through targeting some of the 146 potential
exploration targets which have been identified on the Savannah PSC
areas. Subject to market and financing conditions, Savannah expects
both of these projects to be launched in 2020 and believes that its
existing (and potential further) Niger discoveries have the
potential to deliver meaningful cash flows to the Group in the
future.
Further details on the Nigerian Assets are set out in this Part
1 and in Part 4 and Part 8 of this document. Further information on
the Company's Niger assets is set out in this Part 1 and in Part 5
and Part 9 of this document. Further details of the Transaction and
the Capital Restructuring are set out in this Part 1, Part 2 and
Part 11 of this document.
2. Acquisition of the Nigerian Assets
Since the Company first announced the proposed transaction with
Seven Energy and certain of the financial creditors of Seven Energy
in 2017, the terms of the Transaction and the interests being
acquired by the Company as described in the Dec 2017 Admission
Document were amended.
The key differences between the Acquisition as it was initially
described in the Dec 2017 Admission Document and as it was
subsequently amended (as described by the Company's RNSs of 20
September 2018, 21 December 2018 and 1 October 2019) are summarised
in Figure 3 and described in further detail below.
Figure 3, Summary of Interests Acquired by the Company Following
Transaction Amendments
Upon
December Transaction
2017 Completion Comment
Amended per FOL Transaction
Uquo Gas & Condensate 87.7% 80.0%(1) and
AIIM Transaction
Uquo Oil 85.0% - Amended per FOL Transaction
Acquisition of Universal
Universal (Stubb Creek) 62.5% 100.0%(2) minority shareholders
Amended per FOL Transaction
Accugas Midstream Business 20.0% 80.0%(3) and
AIIM Transaction
Notes
1. The Uquo interests reflects the Company's net economic
interest in the Uquo Field after taking into account the 20 per
cent. equity interest held by AIIM, via African Upstream Holdings
Mauritius, in Uquo HoldCo, the holding company of SUGL;
2. This represents the Company's economic interest in Universal,
which holds a 51 per cent. operating interest in the Stubb Creek
Field; and
3. This represents the Company's shareholding interest in
Accugas HoldCo, which is the holding company for the Accugas
Midstream Business.
The Directors took the decision to make these amendments, whilst
recognising that they would result in a delay to the completion of
the Transaction, as the Board believes the amendments represent
material positives for the Enlarged Group going forward. In
aggregate, the amendments give the Company control of the
integrated Accugas Midstream Business and the Uquo Gas Project
(affording Savannah increased operational control across the gas
value chain) and the Directors believe that the amendments are
demonstrably NPV and cash flow accretive and significantly increase
the upside exposure of Savannah's Nigerian gas business given the
current unutilised processing and transportation capacity of the
Accugas Midstream Business.
Under the final terms of the Acquisition and the AIIM
Transaction, the Company acquired the following assets:
A. 80 per cent. economic interest in the Uquo Field gas project
Savannah holds an indirect 80 per cent. economic interest in the
exploration, development and production of gas within the Uquo
Field through its 80 per cent. equity ownership interest in
Savannah Petroleum (Uquo) Limited and its wholly owned subsidiary.
Seven Uquo Gas Limited, which has a 100 per cent. economic interest
in the Uquo Gas Project (including associated condensate
production). SUGL holds responsibility for all operations of the
gas project at the Uquo Field, including control of gas-related
capital investment projects and day to day gas operations.
The remaining 20 per cent. economic interest in the Uquo Field
is held by African Infrastructure Investment Managers, a leading
African-focused private equity firm, through its 20 per cent.
equity interest in Savannah Petroleum (Uquo) Limited.
Further details about AIIM are included in paragraph 8 of Part 1
of this document.
Changes to the Acquisition structure since the Dec 2017
Admission Document
At the time of the Dec 2017 Admission Document, it was intended
that the Company would acquire a 40 per cent. participating
interest in the Uquo Field, through the acquisition of SUGL. At
that time, the Company would have had an effective 87.7 per cent.
gas and 85 per cent. oil revenue interest in the Uquo Field under
the terms of the joint operating agreement and technical services
agreement between SUGL and Frontier (which held the balance of
interest in the Uquo Field) in which SUGL acted as the technical
and funding partner to Frontier and as project manager for the
development of the Uquo Field.
The Company announced on 1 October 2019 that Frontier, SUGL and
Accugas had entered into final long-form documentation in relation
to the restructuring of economic interests in the Uquo Field and
the operatorship of the Uquo CPF, in line with the Company's RNS
dated 20 September 2018. Pursuant to the terms of the FOL
Transaction, Frontier, SUGL and Accugas Limited agreed to undertake
a transaction known as the FOL Transaction.
As previously stated by the Company, the FOL Transaction has led
to a significant reduction in SUGL's capital investment plans,
where approximately US$35 million was anticipated to be spent on
oil related capital expenditure at the Uquo Field following
completion of the Transaction, and the consideration of the FOL
Transaction is therefore expected to be offset against associated
reductions in capital expenditure.
The terms of the FOL Transaction provided that, whilst
Frontier's and SUGL's participating interest in the Uquo Field
remains at 60 per cent. and 40 per cent. respectively, SUGL is
granted economic ownership and control of 100 per cent. of the gas
project at the Uquo Field (including associated condensate
production), Accugas Limited is granted operatorship of the Uquo
CPF and Frontier is granted economic ownership and control of 100
per cent. of the oil project at the Uquo Field, all with an
economic effective date of 31 August 2018.
Under the terms of the FOL Transaction, SUGL made an advance
payment of cash calls of US$20 million to Frontier on the
completion of the FOL Transaction. A further US$14.13 million of
advance cash calls is payable in Naira across three yearly
instalments, with the first instalment of US$5 million due twelve
months following the completion of the Transaction, the second
instalment of US$5 million due twenty-four months following
completion of the Transaction and the final instalment of US$4.13
million due thirty-six months following completion of the
Transaction. The three yearly instalments payable to Frontier are
subject to a deduction of NGN 1.2 billion in respect of gas sales
proceeds received by Frontier between 31 August 2018 and the date
of completion of the FOL Transaction (net of royalties paid by
Frontier in respect of the corresponding volumes of gas).
As previously announced, AIIM's 20 per cent. ownership of
Savannah Petroleum (Uquo) Limited was formalised on 8 July 2019
with the signature of final long-form documentation.
B. 100 per cent. economic interest in Universal, which holds a
51 per cent. operating interest in the Stubb Creek Field
Savannah holds a 51 per cent. interest in the Stubb Creek Field.
This interest is held via a 100 per cent. economic interest in
Universal, which in turn holds a 51 per cent. interest in the Stubb
Creek Field. The remaining 49 per cent. interest in the field is
held by Sinopec International Petroleum Exploration and Production
Company Nigeria Limited.
Changes to the Acquisition structure since the Dec 2017
Admission Document
At the time of the Dec 2017 Admission Document, it was intended
that the Company would acquire a minimum 62.5 per cent. interest in
Universal.
The Company announced on 20 September 2018 that an agreement had
been reached for Seven Energy to acquire the remaining 37.5 per
cent. minority shareholders' interests in Universal for total
consideration of US$3 million, increasing the Company's effective
participating interest in the Stubb Creek Field to 51 per cent.
upon completion of the Transaction.
Prior to completion of the Transaction, a newly incorporated
company within the Seven Group ("Stubb Creek HoldCo") acquired the
37.5 per cent. minority shareholders' interests in Universal. Upon
completion of the Transaction, Stubb Creek HoldCo and the 62.5 per
cent. interest in Universal otherwise held by the Seven Group were
transferred to Savannah, such that the Company acquired a 100 per
cent. economic interest in Universal and a 51 per cent. operating
interest in Stubb Creek Field.
C. 80 per cent. interest in Accugas Midstream Business
Savannah holds an 80 per cent. indirect interest in the Accugas
Midstream Business, which owns and operates the 200 MMscfpd Uquo
CPF and c. 260km gas pipeline network and related gas distribution
infrastructure, as well as holding a number of gas sales agreements
with downstream customers. The remaining 20 per cent. of the
Accugas Midstream Business is held indirectly by AIIM.
Changes to the Acquisition structure since the Dec 2017
Admission Document
Previously, as described in the Dec 2017 Admission Document, the
Company had entered into a conditional investment agreement
pursuant to which AIIM, together with potentially one or more
co-investors, would acquire an 80 per cent. interest in the Accugas
Midstream Business with AIIM to invest at least US$45 million into
the business in return for its equity interest. Pursuant to this
conditional investment agreement, the Company would acquire a 20
cent. carried interest in the business.
As announced by the Company on 21 December 2018, the Company
stated its intention to acquire an additional 60 per cent. interest
in the Accugas Midstream Business, which would have the result of
the Enlarged Group owning an 80 per cent. interest in the Accugas
Midstream Business. On 8 July 2019, the Company signed final
long-form documentation in respect of, inter alia, the AIIM
Transaction. Pursuant to the Acquisition, the Company acquired a
100 per cent. indirect interest in Accugas Limited and, pursuant to
the AIIM Transaction, immediately thereafter, new ordinary shares
representing a 20 per cent. interest in Accugas HoldCo, the holding
company of Accugas Limited, were issued to AIIM (via African
Midstream Holdings Mauritius) with the effect that the Company
maintained an 80 per cent. indirect interest in the Accugas
Midstream Business.
AIIM acquired its 20 per cent. indirect interest in both Uquo
HoldCo (see above) and Accugas HoldCo for a total cash
consideration of US$54 million, which was transferred directly to
the Company (on behalf of Accugas HoldCo and Savannah Petroleum
(Uquo) Limited) upon completion of the AIIM Transaction. As a
result of the transaction amendments, which were NPV and cashflow
accretive, Savannah gained control of the Accugas Midstream
Business thereby increasing the upside exposure of the Group to a
rise in gas volumes and prices.
Proforma Net Assets of the Enlarged Group
The Unaudited Proforma Statement of Net Assets of the Enlarged
Group following completion of the Transaction is set out in Part 7
of this document. A comparison of the proforma net assets of the
Enlarged Group following the Transaction as initially described in
the Dec 2017 Admission Document and the Transaction as subsequently
amended and described in this document is summarised below.
Dec 2017 Admission
Proforma Net Assets of the Enlarged Group Transaction
Document
US$000 US$000
Note 2 Note 1
Non-current assets
1,224,342 455,030
Current Assets
163,417 66,046
Total Assets
1,387,759 521,076
Current Liabilities
210,772 29,669
Non-current liabilities
729,042 111,785
Total liabilities
939,814 141,454
Net assets
447,945 379,622
Notes
1. Proforma Net Assets of the Enlarged Group as at 30 June 2017
2. Proforma Net Assets of the Enlarged Group as at 30 June 2019
Further details on the Acquisition of the Nigerian Assets and
the Transaction, and the Enlarged Group structure, are set out in
Part 2 of this document.
Good standing opinions
It is noted that as a result of the COVID-19 outbreak, it has
not been possible for the Company's Nigerian counsel to undertake,
immediately prior to publication of this document, the necessary in
person searches that are required in Nigeria to confirm the good
standing of the Group's Nigerian licences and subsidiaries. The
relevant searches were last completed in March 2020 by the
Company's Nigerian counsel confirming the good standing of the
local subsidiaries and pipeline licences as at that date. The Stubb
Creek licence was confirmed to be in good standing in a letter from
the DPR in February 2020 and the Uquo Field licence good standing
confirmation is subject to the payment of a fee, the question of
which is currently under negotiation between Savannah and the DPR
(a matter which is further described in Risk Factor 5.13 in Part 3
of this document).
Whilst the Company has no reason to believe that the good
standing of its Nigerian licences and subsidiaries will have
changed between the date of the searches and the date of this
document, it cannot rely on up to date searches to evidence this
fact, and in the unlikely event that a successful challenge had
been lodged, in this interim period, as to the good standing nature
of the Company's assets in Nigeria, it may result in the Enlarged
Group being required to halt development or production or
operations or, ultimately, in the loss of such assets.
3. Key investment proposition
Under the guidance of Savannah's Board and management team, the
Enlarged Group's business model is centered on the delivery of
material long-term returns for its stakeholders through the
sustainable development and ultimate monetisation of high-quality,
high-potential energy projects.
The Directors believe that an investment in the Company should
be attractive to prospective investors for the following
reasons:
Nigeria
-- Independently assessed average expected base case net asset
free cash flows before debt service of approximately US$130 million
p.a. (2020-2023)[1];
-- Existing infrastructure has significant spare capacity, and
therefore there is strong operational gearing associated with the
signature of new gas contracts, which are typically long-term in
nature; and
-- Strongly positioned to deliver further organic and inorganic
upstream oil and gas projects.
Niger
-- Near term first production and cash flow potential from the R3 East development;
-- Significant exploration potential of over 6.7 Bnbbls unrisked
best estimate Oil-Initially-In-Place independently assessed, with
146 mapped prospects and leads;
-- Proven ability to successfully operate, cost efficiently, in
country with a 100 per cent. exploration success rate on five wells
drilled to date;
-- Proximity of operations to existing large scale
infrastructure, with current focus around potential creation of an
early production system aiming to monetise up to 5 Kbopd of
production; and
-- Planned 2,000 km cross border pipeline network funded by CNPC
and due for completion in 2021/22 increases potential export
market.
Corporate
-- Supportive, long-term oriented institutional shareholder base
-- Focus on creating significant shared value and lasting
benefits for all stakeholders; and
-- Strong culture of governance and delivery.
4. The Capital Restructuring
As part of the Transaction, in February 2018 the Company
acquired US$305,623,123 of Senior Secured Notes issued by Seven
Energy Finance Limited for cash consideration of US$40,910,505.74
and the issue of 224,021,689 new Ordinary Shares. A further US$552
million of Seven Energy's existing indebtedness was restructured
and has been re-instated as follows (and shown as a comparison with
the capital restructuring as described in the Dec 2017 Admission
Document):
Figure 4 - Seven Energy re-instated debt (US$ mi l ion)
Accugas HoldCo Accugas
$mn Limited SUGL Total
20 $mn $mn $mn
Senior Secured Notes - - 20
SUGL Notes 105 105
First Bilateral Facility 20 - - 20
Second Bilateral Facility - - - -
Accugas IV Facility - 371 - 371
DSA Facility - 11 - 11
Working Capital Facility 13 13
Promissory Note 12 - - 12
------------------------------- -------- ---- ------------
Total 52 382 118 552
------------------------------- -------- ---- ------------
Dec 2017 Admission Document 82 386 85 553
------------------------------- -------- ---- ------------
Note: Since Completion, US$40 million of the re-instated debt
has been paid down by Savannah
6. Nigerian Upstream Assets
The Nigeria upstream assets comprise the Uquo Field and Stubb
Creek Field, both of which are located onshore in southern Nigeria,
in the South East of the prolific petroleum system of the Niger
Delta. As further detailed in the Nigeria CPR prepared by CGG, the
respected international geophysical consultancy, a summary of the
gross and net 2P Reserves and 2C Resources and the expected asset
free cash flows of the Uquo Field and the Stubb Creek Fields are
set out below:
Figure 5, Summary of Gross and Net 2P Reserves and 2C Resources
2C Resources
2P Reserves
Oil & Liquids (MMstb)
Gross Net Gross Net
Uquo 0.7 0.5 - -
Stubb Creek 15.4 3.7 - -
Gas (Bscf)
Uquo 500.9 400.7 72.5 58.0
Stubb Creek 515.3 293.7
----------- ---------- ------ ------
Total (MMboe) 99.6 71.0 98.0 58.6
----------- ---------- ------ ------
Figure 6, Summary of expected net asset free cash flows from the
Uquo Field, Stubb Creek Field and Accugas Midstream Business (see
below table for Nigeria CPR key assumptions)
Nigeria CPR Forecast Asset Free Cash Flow, Net (US$ million)
2020 104.2
2021 128.1
2022 141.3
2023 141.3
Average 128.7
CGG has conducted a review of the value of the Savannah's
interests in the Uquo Field and the Stubb Creek Field, which has
been incorporated in the Nigeria CPR. The base case NPV10, based on
2P Reserves, for Savannah's interests in the Uquo Field and the
Stubb Creek Field have been assessed at US$227.7 million and
US$56.7 million, respectively.
Key assumptions used by CGG in its analysis include Brent
futures oil price (inflated at 2 per cent. p.a. from 2027)(2) ,
contracted gas prices and Take or Pay ("ToP") volumes. For full
details of the assumptions used by CGG in its analysis, please see
the Nigeria CPR, as set out in full in Part 8 of this document, and
as announced by the Company on 11 December 2019.
Uquo Field
Savannah holds an 80 per cent. interest in the exploration,
development and production of gas within the Uquo Field through its
80 per cent. owned subsidiary SUGL. Pursuant to the FOL
Transaction, SUGL is responsible for all operations of the gas
project at the Uquo Field, including control of gas-related capital
investment projects and day to day gas operations.
Under the Uquo JOA, which was amended to reflect the terms of
the FOL Transaction on an ongoing basis with effect from 31 August
2018, SUGL and Frontier have separated the oil and gas operations
at the Uquo Field such that:
-- SUGL has 100 per cent. of the economic benefit of, shall
retain all gas and associated condensate produced and gross
proceeds from (including associated natural gas produced from the
oil production), shall pay for all costs, taxes and royalties, and
take all risks, obligations and liabilities with respect to the
Uquo Gas Project; and
-- Frontier has 100 per cent. economic benefit of, shall retain
all crude oil produced and gross proceeds from, shall pay all
costs, taxed and royalties, and take all risks, obligations and
liabilities with respect to the oil production from the Uquo
Field.
Discovered by Shell in 1958, the Uquo Field was awarded to
Frontier in the 2003 Marginal Field round, with Seven Energy
acquiring its interest in 2009. Nine wells have been drilled to
date on the field and these have proven three separate structures
with 19 hydrocarbon bearing reservoirs (14 gas, 4 oil and 1
potential oil) all of which lie within the Early Miocene Agbada
Formation. Commercial production from the Uquo Field commenced in
2014.
The Uquo CPF has processing capacity of 200 MMscfpd and was
designed and built by respected industry contractor Petrofac. The
Uquo CPF is modular in nature, with the flexibility to add
additional gas processing capacity. Gas is sold under the Upstream
GSA to Accugas Limited, as SUGL's sole customer, at a current price
of US$1.31/Mscf for 2020, which is expected to increase by a
weighted average (based on DCQ volumes) of over five per cent. per
annum over the next five years and up to 1.5 per cent. per annum
thereafter due to price indexation clauses which are included in
the downstream GSAs. Current liquids facility capacity at the field
is 2 Kbopd, with liquids evacuated via pipeline to the QIT, which
is located c. 10 km from the Uquo Field, under a crude offtake
agreement with ExxonMobil Sales and Supply LLC.
The Uquo Field is, in the Board's opinion, a low-cost field,
with CGG having assessed life of field gross capital and operating
costs to be US$0.9/boe (US$0.15/Mscf) and US$1.5/boe
(US$0.25/Mscf), respectively on a forward basis, in the Nigeria
CPR. Near-term operational plans at the field include the drilling
and completion of a gas production well, recompletion of an oil
well as a gas producer and work over of the current gas production
wells at an estimated cost of US$33.7 million.
Stubb Creek Field
Savannah has a 51 per cent. participating interest in the Stubb
Creek Field. Savannah's interest is held via a 100 per cent.
economic interest in Universal, which in turn holds a 51 per cent.
interest in the field. The remaining 49 per cent. interest in the
field is held by Sinopec. Universal is the operator of the Stubb
Creek Field.
The commercial agreement in relation to the crude oil and
natural gas at the Stubb Creek Field is allocated on the following
terms:
Figure 7, Commercial agreement between Universal and Sinopec
with respect to the Stubb Creek Field
Natural gas produced Non-associated
Crude oil with crude oil natural gas
Funding Profit Funding Profit Funding Profit
Universal 20% 51% 20% 51% 50% 60%
Sinopec 80% 49% 80% 49% 50% 40%
Discovered by Shell in 1971, the Stubb Creek Field was awarded
to Universal as a Marginal Field in 2003. Seven acquired its
interest in 2009 and 2010 through a two-stage acquisition of a 62.5
per cent. shareholding in Universal and brought the field into
commercial production in January 2015 using the Stubb Creek EPF,
which is capable of processing oil at a gross rate of c. 3
Kbopd.
The Stubb Creek Field is an oil asset, with a considerable (515
Bscf gross 2C) undeveloped, non-associated gas resource. Nine wells
have been drilled to date on the Stubb Creek Field, of which four
were drilled by Shell between 1971 and 1983 and five development
wells were drilled, tested and completed between 2007 - 2009 by
Universal.
Stubb Creek Field crude oil is exported from the Stubb Creek
Field to QIT, which is operated by ExxonMobil and sold under the
terms of the ExxonMobil COSA, as detailed in Part 11 of this
document.
The Board believes that the acquisition of the minority
shareholders' interest in Universal, in addition to the acquisition
of Seven's interest, materially further increases the Enlarged
Group's reserves and resources and provides the Enlarged Group with
control over Universal's cost structure and Universal's share of
Stubb Creek cash flows.
It is anticipated in 2021 that the existing Stubb Creek EPF will
be debottlenecked, to increase oil production capacity to c. 5
Kbopd. The total capital investment anticipated for this project,
involving bringing two existing wells into production and drilling
a downdip water disposal well, is estimated at US$28million. The
gas Contingent Resources are currently expected to be developed in
2030, as the Uquo Field comes off plateau, and to be tied back to
the Uquo CPF via a new 31 km pipeline. The development of the gas
resources required to fulfil the current GSAs, includes
drilling/completion of four gas wells and construction of the
pipeline. The pipeline cost is to be borne by Accugas.
Further information on the Uquo Field and the Stubb Creek Field
is set out in Part 4 and Part 8 of this document.
7. Accugas Midstream Business
The Accugas Midstream Business focuses on the marketing,
processing, distribution and sale of gas to the Nigerian market.
The business comprises the 200 MMscfpd Uquo CPF, a c. 260km
pipeline network and long-term GSAs with downstream customers.
Accugas buys raw gas from its sole current supplier, 80 per cent.
owned subsidiary of Savannah, SUGL, at a price of US$1.31/Mscf for
2020, and sells this gas to three separate customers in long term
gas sales agreements at a weighted average price of US$3.88/Mscf
for 2020. This price is expected to increase by an average of over
five per cent. per annum over the next six years due to price
indexation clauses which are included in the gas sales agreements,
the key terms of which are summarised below.
Figure 8, Accugas Summary of Key Gas
Sales Agreements
Calabar Unicem Ibom
Power Plant Cement Plant Power Plant
Length of contract 20 years 20 years 10 years
Contract end Sept 2037 Dec 2031 Dec 2023
DCQ 131.0 MMscfpd 38.7 MMscfpd 19.7 MMscfpd
Take or Pay (ToP) 80% 80% 80%
Further information about the GSAs is included in Part 11 of
this document.
CGG has conducted a review of the value of Accugas, which has
been incorporated in the Nigeria CPR. The base case enterprise
value (NPV10) for Savannah's 80 per cent. interest in the Accugas
Midstream Business has been assessed at US$672.8 million.
The Uquo CPF consists of two identical gas processing trains,
each designed to process up to 100 MMscpfd.
Accugas new customer plans
Accugas' historical focus has primarily been on high volume, but
lower margin power station customers, which sell their electricity
into the regulated Nigerian distribution network. These customers
underpinned the contracted forward gas sales which were required to
justify the initial capital investment into Accugas' business
infrastructure. Going forward, Accugas intends to focus on new gas
supply opportunities with both power station customers and new "low
volume, high value" industrial customers whose typical alternative
source of power is from higher cost diesel-fuelled generation, with
Accugas' facilities able to reach three principal industrial
activity hubs (the areas surrounding Calabar, Port Harcourt and
Aba).
The Company announced on 21 December 2018 that Accugas had
entered into an agreement with Calabar Generation Company Limited
and NDPHC in relation to the supply of gas to the Alaoji power
station (which, like Calabar NIPP, is owned by NDPHC). Alaoji is a
504MW gas fired power station which is connected to the Accugas
pipeline network via the Ukanafun Manifold and NGC/Shell gas
pipelines. Potential gas demand from the two NDPHC power stations
at full dispatch is currently estimated to be 225 - 270 MMscfpd
(versus current Calabar DCQ volumes of 131 MMscfpd), presenting
Accugas with significant long-term gas sales growth potential.
The Company announced on 31 January 2020 that Accugas had
entered into a new interruptible gas sales agreement ("IGSA") with
First Independent Power Limited ("FIPL") in relation to the
provision of gas sales to the FIPL Afam power plant ("Afam"). FIPL
is an affiliate company of Sahara Group, a leading international
energy and infrastructure conglomerate with operations in over 38
countries across Africa, the Middle East, Europe and Asia.
Afam has a current power generation capacity of 180MW. The FIPL
IGSA envisages the supply of gas (produced by Uquo, with a maximum
daily nominated quantity of 35 MMscfpd or approximately 5.8 Kboepd)
by Accugas to Afam in order to augment its existing gas supply on
an interruptible basis for an initial term of one year with the
ability to extend upon mutual agreement. The commercial terms of
the IGSA are expected to augment the weighted average profitability
of the Accugas portfolio while Accugas' sales volumes, revenues and
cash flows are expected to increase with no incremental capital
expenditure.
Accugas continues to make good progress in relation to the
negotiation of contracts to supply gas to several other potential
new customers, expected to diversify customer-mix and sources of
revenue.
8. Partnership with African focused private equity investor AIIM
The Africa focused private equity fund manager, African
Infrastructure Investment Managers, acting through its AIIF3 fund
(via African Midstream Holdings Mauritius and African Upstream
Holdings Mauritius) has acquired a 20 per cent. interest in each of
SUGL and Accugas.
AIIM, which is a subsidiary of Old Mutual Investment Group, is
one of the longest running and largest infrastructure fund managers
in Africa, with US$2.1 billion assets under management over seven
funds which since 2000 have concluded investments in more than 60
portfolio companies with operations in 19 countries. AIIM has
extensive Nigerian experience, with total invested, committed and
earmarked capital of greater than US$300 million in country, the
majority of which is in the power, energy and telecommunications
sectors.
As a leading infrastructure manager across Africa, central to
AIIM's investment objectives and processes is its commitment to
responsible investment. In this regard, the environmental, social
and governance (ESG) factors are fully integrated within AIIM's
investment process to support the pursuit and creation of positive
futures and obtaining sustainable returns. AIIM has a proven track
record of providing strategic, commercial and financial expertise
into infrastructure investment activities.
Savannah and AIIM have indirectly entered into shareholders'
agreements and technical services agreements with SUGL and Accugas.
Pursuant to the shareholders' agreements, Savannah has the right to
appoint the management, three out of the five directors and the
chairman of the board of each of Uquo HoldCo and Accugas HoldCo and
the operating subsidiaries will have the same board
composition.
13. Overview of Niger Operations
The Company's license interests in Niger are located in the
highly prospective Agadem Rift Basin in South East Niger covering
an area of approximately 13,655 km(2) . The ARB is comparable in
scale to the North Sea rift system, and forms part of the Central
African Rift System. The Company's interests, which were acquired
over the course of 2014 and 2015, cover c. 50 per cent. of the ARB.
Following a very successful exploration drilling programme in 2018
on the R3 East portion of the R3/R4 PSC, and in accordance with the
terms of the respective PSCs, the Exclusive Exploration
Authorisation on the R3/R4 PSC was renewed for a further two year
term expiring 31 August 2021 and the Company relinquished the R4
area of the R3/R4 PSC. The initial term of the Exclusive
Exploration Authorisation on the R1/R2 PSC has expired however, the
Company has agreed with the Ministry of Energy and Petroleum that
the R4 area will be combined with the R1/R2 PSC Area into a new PSC
(the "R1/R2/R4 PSC") to be issued under the Petroleum Code 2017,
thus retaining the full acreage position previously covered by the
R1/R2 PSC and the R3/R4 PSC. The new R1/R2/R4 PSC covering the R1,
R2 and R4 areas is subject to approval by the Council of Ministers
and is expected to be formally awarded to Savannah on payment of
the signature bonus and a fee in relation to the Government's
expenses incurred in connection with the signing of the R1/R2/R4
PSC. The Directors expect that the Council of Ministers approval
will be forthcoming shortly after publication of this document.
Please refer to Appendix C for the key terms of the Savannah
PSCs.
Savannah's stated business model in Niger is to discover
material oil resources for a low finding cost relative to the
expected net present value per barrel of the cash flows which it
ultimately expects to yield from these discoveries. The Company's
assessment of the historic ARB finding cost is c. US$1/bbl versus
an expected net present value of c. US$5/bbl for a generic
discovery. This business model is underpinned by three core views,
being that:
1. The Company's PSC areas are technically low risk - the
Company believes that large portions of its Niger PSC areas are
analogous to that of the neighbouring Agadem PSC area, which has
seen 110 oil discoveries from 137 exploration wells drilled on it
to date (an 80 per cent. success rate) and that therefore the
Company's exploration activities on its acreage may see similar
repeatable exploration success.
2. The ARB is an established oil and gas jurisdiction conducive
to successful operations: The ARB operating environment is proven,
with established logistics and service company networks, giving
Savannah confidence to deliver exploration, development and
production projects. For example, the established service companies
in the ARB have acquired over 18,000 km 2D and 13,000 km(2) 3D
seismic, drilled over 200 wells and built production, pipeline and
refinery facilities.
3. Commercialisation of ARB discoveries is relatively
straightforward: The ARB has existing downstream infrastructure in
place and as noted above, the country has plans for export
infrastructure to be installed over the coming years, most notably
through the Niger-Benin Export Pipeline. First oil was delivered on
the neighbouring Agadem PSC from a standing start three years from
license award (including the construction of a new 463 km pipeline
and associated refinery). Further, an appropriate legal framework
for sharing third party infrastructure exists in Niger.
Exploration drilling campaign
Following the acquisition of 806 km(2) high-quality 3D seismic
over the R3 East portion of the R3/R4 PSC area in 2016/2017, the
interpretation of this dataset enabled the Savannah technical team
to identify high-grade drilling targets for its exploration
campaign on the area. GWDC acted as the Company's drilling
contractor for the campaign, using the GWDC 215 rig ("Rig GW-215").
Prior to the commencement of Savannah's operations, Rig GW-215 had
successfully drilled over 40 wells on the ARB and in total GWDC had
drilled over 200 wells on the ARB, acquiring significant knowledge
and experience of the geological and technical aspects of drilling
in the area.
In April 2018, Savannah commenced its maiden exploration
drilling campaign with the spud of the Bushiya-1 well, which
delivered the Company's first discovery. This was followed by
successes at Amdigh-1 and Kunama-1, leading to Savannah electing to
exercise two individual well options and resulting in two further
discoveries at Eridal-1 and Zomo-1. Following the Zomo-1 discovery,
Savannah chose to conclude its campaign in order to allow its team
to evaluate results from the campaign.
2018 was thus a validation of Savannah's Niger business model in
which the exploration campaign resulted in the discovery of five
new oil fields - Bushiya, Amdigh, Kunama, Eridal and Zomo -
delivering a 100 per cent. exploration success rate and confirming
the Company's belief that its PSCs are technically low risk.
Following the successful results of the five exploration wells
drilled, Savannah Niger elected to commission Pre-Stack Depth
Migration re-processing of the R3 East 3D seismic dataset, which
showed an overall improvement in seismic imaging (better event
continuity and fault definition) at all levels versus the existing
Pre-Stack Time Migration dataset. The interpretation phase, which
commenced in June 2019, will assist in confirming drilling targets
to support the proposed early production scheme ("EPS") as well as
identifying additional prospectivity in the deeper Yogou and Donga
Cretaceous intervals. The Company also plans on proceeding with its
planned Amdigh-1 and Eridal-1 well tests.
Route to market
Following Savannah's successful 2018 exploration drilling
campaign, the Company has focused on commercialising the
discoveries through an EPS which would accommodate the well-testing
operation and seamlessly continue to produce oil into the existing
local infrastructure. This would see oil produced from the
discovery wells in the R3 East area of the R3/R4 PSC produced for
sale into the Société de Raffinage de Zinder ("SORAZ") refinery.
SORAZ is connected to the ARB via the 463 km Agadem-Zinder
pipeline.
In August 2018, Savannah signed an agreement with the Republic
of Niger in relation to the EPS. This agreement sets out how the
Niger Government and Savannah intend to work together, and how
Savannah will be supported by the Niger Government, in order to
deliver first production from the EPS.
Achieving first oil from Savannah's discoveries in Niger is a
key strategic priority for the Company and has the potential to
deliver meaningful cash flows for the business, which the Company
believe could occur within the next twelve months, market
conditions and financing permitting.
The EPS is anticipated to be developed in two phases ("Phase 1"
and "Phase 2"). Phase 1 is expected to see crude oil trucked from
Amdigh 120 km to the Goumeri Export Station ("GES"), then piped to
the SORAZ refinery via the existing pipeline and is anticipated to
deliver plateau production of up to 1,500 bopd. Phase 2 foresees a
pipeline being laid from Amdigh to the GES, with production
expected to ramp up to 5,000 bopd.
As noted earlier, on 15 September 2019 CNPC and the Republic of
Niger entered into a Transportation Convention in relation to the
planned crude oil export Niger-Benin Export Pipeline. The
Niger-Benin Export Pipeline is expected to run for c. 2,000 km from
the ARB in Niger to Port Seme on the Atlantic coast in Benin, and
is expected to be complete by the end of 2021. Under the terms of
Savannah's PSCs, the Petroleum Code of Niger and its Implementing
Decree, Savannah is entitled to access such third-party
infrastructure. Importantly, the Niger-Benin Export Pipeline
provides Savannah with a significant additional potential route to
market, alongside the existing SORAZ refinery.
Contingent Resources
Each of the five wells drilled by Savannah in 2018 can be
classified as 'Discoveries' under the Petroleum Resource Management
System (PRMS) 2018 definitions, and for which Contingent Resource
volumes can be estimated, as determined by CGG in the Niger CPR.
These amount to over 33 MMstb net attributable to Savannah in the
2C, mid case.
Figure 11, Contingent Resource estimates
Gross on Licence Chance of Operator
net attributable
development
Discovery 1C 2C 3C 1C 2C 3C
----- ----- ------ ----- ----- ------ ------------------ ---------
Amdigh 7.2 18.4 83.9 6.8 17.5 79.7 High Savannah
----- ----- ------ ----- ----- ------ ------------------ ---------
Eridal 4.3 6.2 8.5 4.0 5.9 8.1 High Savannah
----- ----- ------ ----- ----- ------ ------------------ ---------
Bushiya 3.3 6.2 12.9 3.2 5.9 12.3 High Savannah
----- ----- ------ ----- ----- ------ ------------------ ---------
Kunama 1.8 4.2 9.3 1.8 4.0 8.8 High Savannah
----- ----- ------ ----- ----- ------ ------------------ ---------
Total MMstb 16.7 35.0 114.6 15.8 33.3 105.1
----- ----- ------ ----- ----- ------ ------------------ ---------
Zomo 0.0 0.2 0.0 0.2 Medium Savannah
----- ----- ------ ----- ----- ------ ------------------ ---------
Note: Net Attributable volumes are given pre-Royalties,
pre-Taxes and pre-Government share of profit. Source: Adapted from
the Niger CPR
Four of these discoveries are assessed by CGG as having a high
probability of commercial development, allowing relatively
near-term future conversion of these volumes to Reserves under PRMS
guidelines. Evaluation of the Zomo discovery is preliminary,
pending further seismic evaluation, and the indicative resources
shown are excluded from the total.
Prospective Resources
CGG recognises a total of eleven exploration Prospects and
Leads, for which Prospective Resource estimations have been made
(Figures 37 and 38 of Part 5 of this document). Five of these are
located on the R3/R4 PSC, with an aggregate gross Best Estimate
resource potential of 90 MMstb, and assessed Chance of Success of
25 per cent. to 75 per cent. Three of these are deep exploration
targets in the Cretaceous Yogou formation below the shallower
discoveries at Bushiya, Amdigh and Eridal. Two further undrilled
leads are identified on the western edge of the PSC, with
prospectivity in the Sokor as well as the deeper Yogou
formation.
A further six undrilled exploration prospects and leads have
been assessed by CGG in the R1/2/4 PSC Area, within the R1/R2 PSC
Area to the north west of the R3/R4 PSC. These all have exploration
potential throughout the section and have a larger aggregate gross
resource potential of 270 MMstb (Best Estimate). Two of these
features, Kunkuru and Damissa, are covered by 3D seismic and are
thought to have a high chance of exploration Success (>75 per
cent.). The other four features are also large (30 - 80 MMstb) but
are currently regarded as high risk (most <25 per cent. chance
of exploration success).
14. Summary Financial Information of the Target Companies
The summary financial information presented below has been
extracted without material adjustment from the historical financial
information of the Target Companies as set out in Part 6B of this
document. This summary financial information has been derived from
the audited financial statements of Accugas, SUGL, Exoro and
Universal for the year ended 31 December 2018 and the unaudited
interim financial statements of Accugas, SUGL, Exoro and Universal
for the six month period ended 30 June 2019, as adjusted by
Savannah for the purposes of presenting such information in
accordance with Savannah's own accounting policies.
FY 2018 H1 2019
$000 $000
Income Statement Selected Line Items
Revenue 93,572 70,271
Operating Profit 145,016 14,178
Profit/(Loss) Before Tax 45,255 (32,191)
Profit After Tax 42,144 3,376
Balance Sheet Selected Line Items
Total Assets 1,154,252 1,201,650
Total Liabilities 1,555,354 1,599,353
Net Liabilities (401,102) (397,703)
Net Debt (804,800) (814,570)
Cash Flow Statement Selected Line Items
Cash Flow from operating activities 73,758 23,271
Cash used in financing activities (76,149) (23,790)
(Decrease)/increase in cash and cash equivalents (7,264) 1,702
16. Current trading of the Enlarged Group
The operating and financial performance of the Nigerian Assets
continued to improve during the course of 2019 and into the first
quarter of this year. 2019's performance, as compared to 2018, is
summarised in the table below:
Year ended 31 December Year ended 31
2019 December 2019
Gas sales - MMscfpd 93.9 64.2
Average selling price - US$/Mcf 3.57 3.40
Oil production (gross) - bopd 2,519 2,393
Total cash collections - US$ million 168.8 128.7
EBITDAX - US$ million 89.5 6.9
Note: the financial information included above for the year
ended 31 December 2019 is unaudited and may be subject to
adjustment before the results for the year ended 31 December 2019
are published
In 2019, year-on-year gas sales increased by 46 per cent. to an
average of 93.9 MMscfpd, principally as a result of increased
volumes being supplied to Calabar whose offtake increased by
approximately 130 per cent. compared to 2018. The average realised
price was five per cent. higher in 2019 at US$3.57 per Mcf largely
as a result of the price indexation that is embedded into the GSAs.
Oil production was 5 per cent. higher in 2019 at 2,519 bopd,
principally from the Stubb Creek Field which achieved average daily
production of 2,393 bopd as a result of increased uptime compared
to 2018. The unaudited EBITDAX for the Nigerian Assets for 2019 was
US$89.5 million, compared to US$6.9 million in 2018. Total cash
collections from gas sales and oil production amounted to US$169
million in 2019 which was 31 per cent. higher than in 2018.
Q1 2020 trading
Gas sales in the first quarter of 2020 increased by 20 per cent.
compared to the average for 2019 to 113.1 MMscfpd, despite Ibom
Power being offline for much of the period. Calabar's offtake in
this period was a further 40 per cent. higher than its average
offtake for 2019 and a peak daily production rate of 164 MMscfpd
was achieved in February 2020. Oil production was marginally lower
in Q1 2020 compared to last year at 2,387 bopd as a result of the
Stubb Creek Field being shut in for 10 days due to required
maintenance at the FUN Manifold.
Since the Transaction was completed in November 2019, total cash
collections from the Nigerian Assets have amounted to US$96
million, the Enlarged Group has paid down US$40 million of the
restructured debt taken on as part of the Acquisition and the
Capital Restructuring and, as referred to in paragraph 7 above, the
Group entered into its first new GSA for over five years.
Your attention is drawn to the Risk Factors in Part 3 of this
document and, in particular, that relating to the evolving
situation with the COVID-19 pandemic. This has already had a
significant impact on global oil prices and could have further
impact on the Group's business and financial performance if, for
one reason or another, the Group is unable to supply gas to any of
its customers or its customers have to curtail or cease production
and, therefore, take delivery of lower gas volumes.
17. Future strategy of the Enlarged Group
Savannah seeks to enhance and ultimately realise sustainable
value for stakeholders through the successful delivery of material
projects across the energy asset life cycle. The Enlarged Group has
a valuable and stable asset base which provides a strong platform
for future growth, and the Directors believe that energy companies
can create substantial value by acquiring, either organically or
inorganically, oil and gas reserves and resources at a significant
discount to the net present value per share of the cash flows that
they are capable of subsequently realising from those reserves and
resources.
In the near-term, significant benefits to the Enlarged Group are
expected to be realised through the cash flows which are expected
to be generated by the Uquo Field, Stubb Creek Field and Accugas as
well as through the development of the Company's Niger R3 East EPS.
Accugas' immediate focus is on the addition of new customers,
including power stations, and higher margin industrial customers.
Existing Accugas infrastructure is largely ex-capex and with
significant spare capacity, and therefore there is strong
operational gearing associated with the signature of new gas
contracts, which are long-term in nature.
Outside of "on asset" or "near asset" growth opportunities in
Niger and Nigeria, the Company reviews potential acquisitions and
strategic transactions on an ongoing basis. In order for the
Company to progress with a growth opportunity, it assesses the
potential opportunity to deliver material NAV accretion, asset
diversification and medium-term cost of capital reduction.
Opportunities should also be cash flow generative, or close to
delivering cash flow generation, represent controlling interests in
assets (or have a competent, credible operator) and be located in
an emerging market jurisdiction with high-quality subsurface
characteristics.
The Company also keeps under review the best avenue for
developing its Nigerien Assets and Nigerian Assets, which may, in
due course, result in the Company seeking independent finance for
each business.
Savannah's business model is underpinned by the Company's
entrepreneurial and proactive culture. Savannah focuses on
generating long-term value over short-term results and aims to move
quickly to take advantage of opportunities that arise and to react
promptly to changes in the business environment.
Grant of Options
The Company intends, immediately following the publication of
this document, to make the following option awards to each of Sir
Stephen O'Brien, David Clarkson and Michael Wachtel. Such awards
are being made in full satisfaction of the Company's obligation to
grant awards over new Ordinary Shares, as referenced in the Dec
2017 Admission Document, with an aggregate value of GBP50,000
(based on a price per Ordinary Share of GBP0.35) to each of them
(see paragraph 7.2 of this Part 10 for further details). It is
anticipated that each of the above Directors will be granted
142,857 options over new Ordinary Shares, which will be exercisable
for a period of five years and have an exercise price of GBP0.001
per Ordinary Share. There is no current intention to make the
options subject to any vesting or other performance conditions.
[1] Futures price of US$59.3/bbl 2020, US$57.4/bbl 2021,
US$56.9/bbl 2022, US$57.1/bbl 2023. NPVs shown on "take or pay"
basis. i.e. based on the amount of gas that Accugas' customers are
obliged to purchase, take and pay for (or pay for if not
taken).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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