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Savannah Petroleum signs MoU with NNDC and NNPC in Nigeria

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Savannah Petroleum PLC (Savannah) has announced that it is hosting a site visit for analysts and investors to the company’s operations and offices in Niger.

Savannah Petroleum PLC (Savannah) has announced that it is hosting a site visit for analysts and investors to the company’s operations and offices in Niger.

Pesentations will be given by Savannah’s management and operational team, and will include the following highlights:

  • Review and update of the company’s conceptual development solution for potential Agadem discoveries, with an estimated US$200 million (c.50%) reduction in external financing costs to first oil for a c.75 million bbls development.
  • An additional export route for Agadem crude to the Kaduna refinery in northern Nigeria is now advancing.
  • CGG has reviewed the cost structure and associated economic modelling presented by Savannah in relation to the revised conceptual development solution and assessed a breakeven oil price of US$26/bbls and NPV10 of US$5.1/bbl at US$60/bbl to be reasonable for the Agadem-Kaduna pipeline export option.
  • Strong encouragement in relation to new ARB exploration play types and higher recovery factors.
  • R3 3D seismic acquisition on track, with survey completion estimated for February 2017.
  • Exploration drilling remains on track to commence in 1H17.
  • In addition, in a separate announcement, the company has announced the signature of a Memorandum of Understanding with the New Nigeria Development Company Ltd (NNDC) and Nigeria National Petroleum Corporation (NNPC) in relation to collaboration between the three parties in the Nigerian section of the Central African Rift System. Aside from what is outlined above, no new material information is expected to be disclosed.

    License area prospectivity

    As previously announced on 5 July 2016, Savannah has now identified 118 exploration targets across the R1/R2 and R3/R4 PSC areas, while CGG has estimated the gross best estimate risked recoverable prospective resources at 2185 million bbls, using its proprietary 'yet-to-find' methodology. At today’s site visit, Savannah will provide background information in relation to this prospectivity.

    The company will also provide a discussion around: (1) the potential for additional exploration play types in the ARB; and (2) the potential for increased ARB recovery factors over time given the encouraging field performances seen to date. While both of these developments are encouraging, Savannah believes at this stage it is premature to quantify their associated resource potential.

    Seismic acquisition

    To date, good progress has been made with an average of c.9 km2 of data acquired per day on the company’s c.800 km2 3D seismic survey currently being conducted over a portion of the R3 license area. The survey is currently expected to be complete in February 2017. As previously announced, it is anticipated to provide greater definition over 12 existing mapped exploration targets while also being expected to identify additional exploration targets not currently mapped on the company’s existing 2D seismic dataset.

    Drilling plans

    Savannah has continued to progress its plans to commence drilling activity on its Niger permit areas in mid H1 2017, for which it raised funds for in its recent equity placing. Well proposals have been issued, and technical and commercial discussions are in progress with contract signature expected in January 2017. The drilling contract structure is expected to confirm an initial three well drilling campaign, with a series of additional options to lock in equipment availability and associated cost structure for additional drilling thereafter. The campaign is expected to initially target the c.93 million bbls Damissa structure (located on the R1 permit area), the c.37 million bbls Bushiya structure and c.35 million bbls Kunama structure (both located on the R3 permit area).

    For further information please visit:Savannah Petroleum

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