Savannah Petroleum PLC Kunama Oil Discovery/Drilling Rig Option Exercised (2344U)

TIDMSAVP

RNS Number : 2344U

Savannah Petroleum PLC

11 July 2018

11 July 2018

Savannah Petroleum PLC

("Savannah" or "the Company")

Kunama Oil Discovery and Exercise of Drilling Rig Option

Third oil discovery made in Niger, drilling campaign extended

Savannah Petroleum PLC, the British independent oil and gas company focused around oil and gas activities in Niger and Nigeria, is pleased to announce the result of the Kunama-1 exploration well as an oil discovery. Kunama-1 is the third consecutive discovery Savannah has made in its maiden exploration campaign in the R3 portion of the R3/R4 PSC Area in the Agadem Rift Basin ("ARB"), South East Niger

Well Result

Preliminary results based on the interpretation of the available data set (which includes wireline logs, fluid sampling and pressure data) indicate that the well has encountered a total estimated 9m of net oil bearing reservoir sandstones in the E1 and E5 reservoir units within the primary Eocene Sokor Alternances objective. Wireline logs indicate the reservoir properties to be good quality and the available data indicates light oil equivalent to the Amdigh-1 well (the second discovery well announced by Savannah on 6 June 2018), and consistent with offset wells along trend and the depth/API trend observed across the basin. Oil samples from the E1 and E5 reservoir units have been taken and returned to surface using wireline testing equipment.

Drilling Performance

The well was drilled by the GW 215 Rig to a total measured depth of 2,460m, and encountered the main objective targets at, or near, their prognosed depths. The well took a total of 14 days to reach target depth, and all operations are expected to be completed within 23 days of spud. This compares with a pre-drill expectation of 22 days to reach target depth and 30 - 35 days to complete all drilling operations. No significant geological or drilling hazards were encountered.

Next Steps, Exercise of Drilling Rig Option and Eridal-1

Kunama-1 is currently being suspended for future re-entry. Consistent with standard industry practice in the ARB, a production test is expected to be performed on the well as part of a batch campaign using a dedicated test rig. This extended well testing programme is currently being planned for later in the year and the Company intends to provide further details in due course. Following testing, a downhole completion assembly to Amdigh-1 is expected to be installed so as to enable the well to function as a production well in the future. Savannah does not expect to provide a discovered resource and volumes report until its expected well test programme has been completed.

Following the successful results of the three exploration wells drilled to date on the R3 East area, Savannah has elected to exercise the first of the six individual options under its contract with Great Wall Drilling Company Niger SARL. The GW 215 rig will now mobilise to the Eridal-1 well site, located on the R3 portion of the R3/R4 PSC Area 6km from Amdigh-1, where it will prepare to spud the Eridal-1 exploration well. Following the exercise of this option, Savannah will continue to have options for a further five wells, each of which can be exercised individually at Savannah's discretion.

Eridal-1

The Eridal-1 well site preparation is in the final stages of completion and is on schedule to accept the rig following demobilisation from the Kunama-1 well site. The move is anticipated to take between 10 - 15 days, and the Company will provide an update upon spud of the well.

As with the previous wells drilled in this campaign, the well is designed to evaluate potential oil pay in the Eocene Sokor Alternances as the primary target, with the secondary target of potential oil pay in the Eocene Upper Sokor being considered as upside.

Andrew Knott, CEO of Savannah Petroleum, said:

"This is clearly an exciting time for Savannah and our stakeholders. The Kunama discovery, following on from Amdigh and Bushiya, provides further encouragement for our plans to establish an early production scheme in Niger, which we expect to be able to provide an update on later in this quarter. The improved understanding of the R3 geology we have gained from the outcome of these wells has also given us the confidence to extend our campaign to target the Eridal prospect, located in close proximity to Amdigh, and we expect to provide updates on further potential additional drilling activity over the course of the coming months.

I would also like to take this opportunity to again thank our operations and subsurface teams and oil service company partners for the delivery of a safe and successful campaign which has been achieved within time and budget expectations. We look forward to continuing to work with them, as well as with our local community and governmental stakeholders, as we continue our exploration and appraisal activities and move into the development phase of our Niger project."

A selection of photographs of Savannah's operations at Kunama-1 has been uploaded to the Company's website at http://www.savannah-petroleum.com/en/gallery.php.

Steve Jenkins, Chairman, and David Clarkson, COO, have read and approved the technical disclosure in this regulatory announcement in their capacity as qualified persons under the AIM Rules.

Mr Jenkins is a qualified geologist with 35 years' experience in the oil and gas industry. He holds a BSc (Hons) in Geology and a MSc in Petroleum Geology. Mr Jenkins is a Fellow of the Geological Society.

Mr Clarkson is a Chartered Engineer with over 40 years' experience in the oil and gas industry, and has held senior level leadership roles in major international developments. He holds a BSc (Hons) in Mechanical Engineering. Mr Clarkson is a Fellow of the Institution of Mechanical Engineers

 
 For further information contact: 
 Savannah Petroleum                    [phone] 
 Andrew Knott, CEO 
 Isatou Semega-Janneh, CFO 
 Jessica Ross, VP Corporate Affairs 
 
 Strand Hanson (Nominated Adviser)     [phone] 
 Rory Murphy 
 James Spinney 
 Ritchie Balmer 
 
 Mirabaud (Joint Broker)               [phone] 
 Peter Krens 
 Ed Haig-Thomas 
 
 Hannam & Partners (Joint Broker)      [phone] 
 Neil Passmore 
  Alejandro Demichelis 
 Sam Merlin 
 
 Celicourt Communications              [phone] 
 Mark Antelme 
 Jimmy Lea 
 

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:

About Savannah Petroleum

Savannah Petroleum PLC is an AIM listed oil and gas company with exploration and production assets in Niger and Nigeria. Savannah's flagship assets include the R1/R2 and R3/R4 PSCs, which cover c.50% of the highly prospective Agadem Rift Basin ("ARB") of South East Niger, acquired in 2014/15. The Company is also in the process of acquiring interests in the cash flow generative Uquo and Stubb Creek oil and gas fields and a 20% interest in the Accugas midstream business in South East Nigeria from Seven Energy.

Further information on Savannah Petroleum PLC can be found on the Company's website: http://www.savannah-petroleum.com/en/index.php

About the Agadem Rift Basin

The Agadem Rift Basin is located in South East Niger and covers an area of approximately 30,000 km(2) in size located in South East Niger. In the modern era, China National Petroleum Corporation ("CNPC") has made 97 discoveries from the last 127 exploration wells with the principal discovered geological play being a relatively shallow Eocene Sokor Alternances tilted fault light oil block play. The basin has been in production since 2011 following a first phase of development of the Agadem PSC area (which is adjacent to Savannah permit areas) by a CNPC-led joint venture. Despite the high success rate seen in the ARB to date, Savannah believes the basin to have been relatively lightly explored, both in terms of overall activity levels and stratigraphic horizons which have been targeted. Further exploration activity in the basin is aided by the very large geological dataset managed by the Niger's Ministry of Energy & Petroleum which comprises c.12,000 km(2) of modern 3D seismic, c.30,000 km of 2D seismic and over 250 well data suites.

About Savannah's ARB Project

Savannah's Niger project consists of two PSC areas (R1/R2 and R3/R4) which together cover an area of 13,655 km(2) . Across these permit areas, Savannah has mapped 126 un-drilled exploration prospects and leads.

Following an extensive period of geological data acquisition and evaluation, Savannah commenced a 3 firm well and 6 optional well drilling program with the spud of the Bushiya-1 well in March 2018. The initial focus of this program has been the R3 East area, with all three wells drilled to date by the Company (Bushiya-1, Amdigh-1 and Kunama-1) having resulted in light oil discoveries.

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 [e-mail] or visit www.rns.com.

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July 11, 2018 02:00 ET (06:00 GMT)