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Savannah offers equity to fund Niger exploration programme

30th July 2014

Savannah Petroleum is proposing to raise approximately USD 50m through equity sales on the London Stock Exchange in order to undertake its planned exploration programme, which includes the acquisition of full tensor gravity and significant seismic surveys over the R1/R2 PSC Area, onshore Niger

Savannah offers equity to fund Niger exploration programme
Savannah intends to create value by maintaining a strong focus around the exploration and appraisal of the resource in the R1/R2 PSC Area

The primary Eocene oil exploration target in the R1/R2 PSC Area has been estimated by leading geoscience consultancy, CGG Robertson, to contain "Best Estimate" risked gross prospective resource of 573 mmbbls (un-risked: 819 mmbbls), of which 544 mmbbls (un-risked: 778 mmbbls) are net to the company.

Following this, Savannah Petroleum has announced its intention to proceed with an initial public offering and to apply for admission of its ordinary shares to trading on the AIM of the London Stock Exchange.

CGG Robertson also recognised substantial upside potential in the deeper Upper Cretaceous, Lower Cretaceous and Palaeocene horizons

The R1/R2 PSC Area covers 30.5 per cent of the original Agadem permit under the CNPC PSC, which has seen an estimated 77 discoveries having been made from 99 exploration wells over the past five years

Niger has demonstrated its receptiveness to inward investment and to the development of the country's oil and gas resource, enabling CNPC to deliver first oil for Niger approximately three years after acquisition of the original Agadem permit

Savannah intends to create value by maintaining a strong focus around the exploration and appraisal of the resource in the R1/R2 PSC Area.

The company is, among western companies, an early mover into this emerging oil and gas province, which is expected to see significant oil and gas infrastructure build-out over the coming years led by the Asian national oil companies CNPC and CPC Corporation (Taiwan).

"Savannah Petroleum is a company with a great asset and an experienced board and management team, and I am excited to be appointed chairman,” said Steve Jenkins, chairman of Savannah Petroleum. “The foundations for future growth are in place, and with a busy work programme focused on the exploration and appraisal of the company's PSC area, Savannah has a real opportunity to unlock and realise substantial value for Niger and shareholders alike."

Savannah is involved in the exploration, appraisal and anticipated eventual development and production of conventional oil deposits located in the R1/R2 PSC area, which represents a significant oil and gas exploration licence in Niger, West Africa.

"Following the signature of the R1/R2 PSC on July 3 2014, listing on AIM marks another significant milestone for Savannah Petroleum and a platform from which we can develop our asset base and create value for our stakeholders,” said Andrew Knott, CEO of Savannah Petroleum. “We have been delighted with the interest shown in our business by the institutional investment community. I would like to thank our pre-IPO investors and new shareholders for making their investments in Savannah. The high quality of our investor base is a testament to the exciting opportunity that Savannah presents.  I would also like to thank our advisory banks and Burness Paull for their support over the last year, without whom we would not be in this position today."

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