Savannah Energy Accelerates Nigerian Gas Expansion with Uquo North East Development
Savannah Energy, a prominent British independent energy company, is charting an ambitious course for its Nigerian operations, with a clear focus on expanding its gas production capabilities. The company has announced its strategic target to commence first gas production from the Uquo North East development well in the first quarter of 2026. This milestone is a key component of Savannah’s broader gas expansion programme within Nigeria, underscoring its commitment to meeting the region’s growing energy demands.
The company’s recent operational and financial update, covering the 11 months ending November 30, 2025, provided detailed insights into the progress of its key projects. A significant development is the near completion of well site construction for the Uquo NE development well. This crucial preparatory phase is expected to conclude within the current year, paving the way for the anticipated drilling campaign to commence early next year.
Uquo North East: A New Frontier for Gas Production
The drilling activities at the Uquo NE site are officially scheduled to begin in January 2026. Following the successful completion of the drilling operations, Savannah Energy anticipates a swift transition to gas production. The company has set an ambitious target for first gas delivery by the end of the first quarter of 2026. Upon reaching full operational capacity, the Uquo NE well is forecast to contribute substantial gas volumes, with projections indicating an output of up to 80 million standard cubic feet per day. This substantial addition to Savannah’s gas supply chain is expected to significantly bolster its overall production figures.
The successful development of the Uquo gas field is further enhanced by the completion and commissioning of a new compression system at the Uquo Central Processing Facility (CPF). This vital infrastructure upgrade has been successfully implemented and is now fully operational. Notably, the compression project was delivered efficiently, coming in approximately 10 per cent under its original budget of $45 million. The strategic importance of this new compression system lies in its capacity to maximise production from both existing and future gas wells within the Uquo field, ensuring optimal resource utilization.
Gas Dominance in Savannah’s Nigerian Portfolio
Gas continues to be the cornerstone of Savannah Energy’s operations in Nigeria. During the reporting period, the company achieved an average gross daily production of 19.1 thousand barrels of oil equivalent per day. Of this total, gas constituted a dominant 84 per cent, highlighting the company’s strategic focus and success in the gas sector.
Savannah is not resting on its laurels and has already initiated preparations for further drilling activities across the Uquo field. These forward-looking plans include well site preparation for the Uquo South exploration well. This exploration initiative targets an unrisked gross gas initially in place estimated at 131 billion standard cubic feet of incremental prospective gas resources within the Uquo licence area. This exploratory effort signifies Savannah’s ongoing commitment to unlocking new gas reserves and expanding its resource base.
Strengthening Gas Sales and Financial Recovery
In parallel with its production expansion efforts, Savannah Energy is actively working to strengthen its gas sales agreements and improve financial recovery mechanisms. The company’s subsidiary, Accugas, has successfully secured a contract extension with Central Horizon Gas Company Limited (CHGC). This renewed agreement extends the supply of gas up to 10 million standard cubic feet per day until the end of December 2026.
Recent interventions by the Nigerian Federal Government in the power sector are also expected to have a positive impact on Savannah’s cash flow from gas sales. The government’s successful launch of a N590 billion first tranche bond issuance, part of a broader N4 trillion bond programme, is aimed at settling verified legacy invoices owed to power generation companies (Gencos) and gas suppliers. This initiative is creating a more favourable environment for Accugas, which is in discussions with its Genco offtakers regarding the accelerated repayment of outstanding receivables. This development injects renewed positive momentum into these crucial financial discussions.
A Year of Significant Progress and a Strong Outlook
Reflecting on the company’s overall performance, Savannah’s Chief Executive Officer, Andrew Knott, expressed satisfaction with the progress made. “In Nigeria, we increased our rate of cash collections year-on-year and made significant progress in refinancing our debt facilities,” he stated. Knott further emphasized that the advancements recorded throughout the year have established a robust foundation for continued execution and growth in 2026. The company’s strategic investments in infrastructure, exploration, and financial management position it strongly to capitalize on future opportunities in Nigeria’s dynamic energy landscape.
