Indian billionaire family-linked Savannah Energy strikes gas at a second Nigerian well

Savannah Energy has struck gas at a second Nigerian well and lifted its production outlook. Its shares have not traded since it missed the deadline for filing last year's accounts.

The London-listed producer, in which the Kansagra family's NIPCO took a 19% stake last October, said its Uquo 13 well reached first gas in July at about 50 million standard cubic feet a day. A neighbouring exploration well, Uquo South, spudded in early August targeting an unrisked 131 billion cubic feet of gas initially in place, and has now found gas across most of the reservoirs it was drilled into. Completion work is under way before testing establishes the size of the discovery.

Group production averaged 16,300 barrels of oil equivalent a day across the first seven months of the year. With Uquo 13 flowing, Savannah expects to exceed 20,000 for the remaining five months and has reaffirmed full-year guidance of 18,000 to 20,000, with room above that if Uquo South proves commercial. At the Stubb Creek field, gross output rose 29% to 3,700 barrels a day and passed 5,000 in July alone.

Revenue for the seven months rose 10% to $160.6 million and cash collections 13% to $247.9 million. Trade receivables, long a problem for the company, fell 22% since December to $394.6 million.

The balance sheet is where the picture changes. Savannah held $62 million of cash at the end of July against net debt of $672 million. It has increased the reserve-based lending facility secured on Stubb Creek to $130 million and extended its maturity to August 2031.

Trading in the shares remains halted. Savannah failed to publish its 2025 annual report on time, which triggered the suspension on London's AIM market, and the shares stay frozen until the document appears. The company says that will happen this month.

A separate case could change everything. Savannah's subsidiaries are pursuing arbitration against Chad seeking more than $775 million plus interest and costs, in a dispute running for years. The company expects a conclusion in the second half of 2026. A ruling in its favour would exceed its net debt.

NIPCO Plc bought into that situation last October. The Nigerian fuel marketer, controlled by the Kansagra family, took 19% of Savannah in a transaction that made it the largest single shareholder without giving it control. Savannah is run by Andrew Knott, who founded it and built the portfolio by buying assets from international oil majors leaving Africa, and the Kansagras hold their position as investors rather than operators.

The family has been in Nigerian energy for decades through NIPCO, which distributes petroleum products and has been among the more active promoters of compressed natural gas for vehicles in the country.

What they bought is a company whose Nigerian assets are performing and whose shares nobody can currently buy or sell.