Savannah Energy gets Uquo 13 flowing as Uquo South finds more Nigerian gas

Savannah Energy PLC (AIM: SAVE) has brought its Uquo 13 development well in Nigeria on stream after testing at approximately 50 million standard cubic feet of gas per day, while neighbouring Uquo South has encountered gas across most targeted reservoirs and is being completed ahead of further testing. The combination gives Savannah two potentially important operational developments at a time when its Nigerian oil production, revenue and cash collections are also increasing.

The Uquo South result needs careful interpretation. The well was drilled against an unrisked gross gas-in-place target of 131 Bscf, but Savannah has not yet established that 131 Bscf has been discovered or is commercially recoverable. Pressure measurements, fluid sampling and logging have confirmed gas in most targeted reservoirs, with completion, testing and evaluation still required before the company can determine the discovery’s scale and resource implications.

How important is Uquo 13 to Savannah Energy’s 2026 production outlook?

Uquo 13 began drilling in April, was completed in late May and achieved first gas during July after being connected to the Uquo central processing facility. The approximately 50 MMscfd test rate is meaningful, although it sits below Savannah’s earlier pre-drill forecast that the well could potentially provide up to 80 MMscfd. That difference does not by itself indicate underperformance because tested rates, facility constraints, reservoir management and sustainable production rates can differ materially, but it provides an important benchmark for readers following the programme.

Group average gross production was 16.3 kboepd during the first seven months of 2026, below the 18.8 kboepd reported for full-year 2025. Savannah expects Uquo 13 to help lift gross production above 20 kboepd during the final five months of the year and continues to guide for average 2026 gross production of 18–20 kboepd, with possible additional upside if Uquo South proves commercially meaningful.

Oil production is also moving higher at Stubb Creek following Savannah’s acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited. Average gross Stubb Creek production increased 29% year on year to 3.7 kbopd during the seven months to July, while July production exceeded 5 kbopd.

Are Savannah Energy’s cash collections improving fast enough?

The operating improvements are being accompanied by better collections. Seven-month revenue increased 10% to US$160.6 million, while cash collections rose 13% to US$247.9 million. Trade receivables fell 22% from US$508.5 million at the end of 2025 to US$394.6 million at July 31, showing that Savannah is converting a larger portion of outstanding Nigerian customer balances into cash.

That matters because receivable collection has historically been a key balance-sheet consideration for companies selling energy into markets where payment cycles can extend materially beyond conventional utility terms. Savannah’s US$247.9 million of collections exceeding its US$160.6 million seven-month revenue indicates that the company was drawing down previously accumulated receivables as well as collecting current-period sales.

The balance sheet nevertheless remains the central counterweight to the operating story. Cash increased to US$62 million from US$42.7 million at year-end, but net debt rose to US$672 million from US$658.8 million. Savannah has increased its Stubb Creek reserve-based lending facility to US$130 million, extended maturity to August 2031 and reduced the margin to 7.5%, improving financing flexibility without eliminating leverage.

Why could Uquo South be more important than Uquo 13?

Uquo 13 is a development well, meaning its primary job is to convert an already identified resource into production. Uquo South is exploration, giving it a fundamentally different risk-reward profile.

If testing confirms a material commercial gas resource, Savannah could increase the resource base supporting its existing Nigerian infrastructure without needing to acquire another asset. Existing processing facilities and customer relationships could potentially lower the development threshold compared with a remote standalone discovery, although the company has not yet provided a development plan or commercial resource estimate.

Conversely, confirmation that gas is present does not guarantee sufficient reservoir quality, deliverability or recoverable volumes. Investors should therefore focus on test results rather than the 131 Bscf pre-drill target.

What does Savannah Energy’s suspended share price say about sentiment?

Savannah’s AIM shares cannot currently provide a meaningful market reaction to Uquo 13 or Uquo South because trading remains suspended. London Stock Exchange data show the last quoted price at 5.51 pence, while FTSE Russell said the extended suspension would result in Savannah’s deletion from the FTSE AIM UK 50, FTSE AIM 100 and FTSE AIM All-Share indexes effective August 28.

That makes financial reporting and restoration of normal trading as important to equity sentiment as drilling performance. Operationally, Savannah now has rising Stubb Creek production, Uquo 13 flowing, a new gas discovery under evaluation and stronger collections. Financially, it still carries US$672 million of net debt and almost US$395 million of trade receivables.

The next decisive data points are therefore Uquo South testing, sustained Uquo 13 production, delivery against the 18–20 kboepd full-year guidance and progress toward normalising the company’s public-market position. Savannah has created more operational momentum, but converting that momentum into equity value will require progress on both sides of the balance sheet.