Gain to date: 25% Original entry point: Buy at 26.6p, 6 September 2018
OUR POSITIVE call on Savannah Petroleum (SAVP:AIM) is off to a good start boosted by strong oil prices and continuing operational excellence in Niger.
The company has drilled four successful wells in this location in 2018 and has identified 120 potential structures to drill, demonstrating the scale of the opportunity it is chasing in the African country.
Alongside half year results on 28 September, Savannah unveiled a new $50m debt facility which should enable it to accelerate activity ahead of first output from Niger in 2019. It also flagged imminent results from its fifth well of the current drilling programme, Zomo-1.
The only real disappointment is a further delay in the completion of the Seven Energy acquisition in Nigeria.
The company now says this transaction, which will add material natural gas production to the portfolio mix, will complete before the end of the year.
Broker Cantor Fitzgerald comments: ‘The company has made great strides in a short period of time, and 2019 should prove transformational with first production in Niger and completion of the Seven Energy deal.’
Exciting times at Savannah, keep buying. (TS)