Savannah Energy Plc has amended its planned four-year capital expenditure programme in Nigeria, as originally set out in the ‘Nigeria Competent Person’s Report.’
In its ‘FY 2020 Trading Update and Guidance Issued for FY 2021’ report released on Monday, the energy company stated that the decision followed the completion of relevant technical and commercial studies.
Savannah Energy would reduce its Nigerian capital expenditure by 15 per cent over the 2020–23 period, from approximately $118m to $100m, according to the report.
This has resulted in a reduction in the overall indicative group capital expenditure plans of around 13 per cent from $137m to $119m over the same period, it added.
Also, the report stated that the principal work programme changes would see only one gas well drilled in the 2020–23 period (as opposed to four assumed previously) on the Uquo field.
The Uquo reservoir continues to perform in line with expectations, and the proposed change in the capital expenditure profile is not expected to impact Uquo field production or expected ultimate reserve recovery, it however explained.
The Chief Executive Officer, Andrew Knott, said, “Looking forward to 2021, we are providing guidance for the year for continued strong revenue generation, investments in key drilling and compression projects, and an increased level of maintenance project activity versus 2020.
“Overall, we have reduced our cost estimate for our indicative 2020–23 capital expenditure programme by around 13 per cent, 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.”