WTI (Feb) $58.08 +$1.34, Brent (Feb) $61.94 +$1.30, Diff -$3.84 -4c.
USNG (Feb)* $3.99 -1c, UKNG (Jan) 75.25p -0.64p, TTF (Feb)* €27.995 +€0.055.
*Denotes January contract expiry.
Oil price
Oil has bounced in thin trade this week and with Brent February expiring tonight volatility will be exacerbated by any geopolitical issues that may arise. This is highlighted by the Ukraine situation, talks in Florida between Trump and Zelenskyy had appeared to go well but overnight news has put a stopper on that, for the time being.
Putin has claimed that drones from Ukraine hit his residence overnight and he insisted that a mighty response will be imminent. Now, I’m not going to call this but with Zelenskyy in Mar-a- Lago the idea that such a provocative move would be taken seems somewhat fanciful…
Savannah Energy
Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter is pleased to provide the following operational and financial update for the 11 months (“11M”) to 30 November 2025. All figures are unaudited.
Andrew Knott, CEO of Savannah, said:
“Throughout 2025, Savannah has made solid progress across the nine focus areas we set out at the beginning of the year. In Nigeria, we increased our rate of cash collections year-on-year and made significant progress in refinancing our debt facilities.
Operationally, the completion of the SIPEC acquisition in March enabled us to commence an expansion programme at Stubb Creek, with production already materially above 2024 levels. At Uquo we delivered the new compression system under budget and advanced site construction ahead of planned drilling in early 2026. Earlier in the year, we also reported a 21% 2P Reserves upgrade at the Uquo gas field and a 29% upgrade to Stubb Creek oil field 2P Reserves. In Niger, we remain actively engaged with the Government on future activity, with the R3 East development plan significantly enhanced during the year.
In the power sector, we have repositioned our business model and advanced both operating and development opportunities, including the proposed acquisition of interests in three East African hydropower projects, alongside continued progress on our wind, solar and hydro portfolio. We continue to pursue further value-accretive acquisitions across both hydrocarbons and power, with several other opportunities under active discussion. We have also continued to progress our arbitration claims, with the Savannah Chad Inc (“SCI”) and Savannah Midstream Investment Limited (“SMIL”) proceedings currently expected to be concluded in the first half of 2026.
Collectively, this progress provides a strong platform for continued execution in 2026. I would also like to take this opportunity to thank my incredibly dedicated and passionate colleagues, as well as our host governments, communities, local authorities and regulators, shareholders, lenders, customers, suppliers and partners for their continued support. Thank you all.”
This is an impressive year-end update and once I have more background I will comment further. In the meantime the 9 focus areas are making ‘solid progress’ and in Nigeria there is an increased rate of cash collections as well as ‘significant progress’ in refinancing the debt facilities.
At Stubb Creek and also Uquo there has been substantial increases in 2P reserves and Savannah has optionality in Niger. With the power sector seeing restructuring and also ‘value-accretive acquisitions’ having taken place with more to come this is an important area for SAVE.
Plenty more later and I have added the NIPCO and buyback announcement below the trading update, more on that as well shortly.
Highlights
Operational
· 11M 2025 average gross daily production of 19.1 Kboepd (11M 2024: 22.8 Kboepd), of which 84% was gas (11M 2024: 88%)1. Following completion of the SIPEC Acquisition in March 2025, commenced an 18-month expansion programme that has already seen Stubb Creek gross daily production increase to 3.3 Kbopd, approximately 24% above the 2024 average;
· Well site construction for the Uquo NE development well is expected to be completed by the end of December, with an anticipated spud date in January 2026 and first gas targeted by the end of Q1 2026;
· Well site preparation has commenced on the Uquo South exploration well;
· New compression system at the Uquo Central Processing Facility (“CPF”) completed and fully commissioned. This project, which was delivered safely and approximately 10% under the original US$45 million budget, is expected to allow us to maximise the production from our existing and future gas wells;
· Gas contract extension agreed with the Central Horizon Gas Company Limited (“CHGC”) to end December 2026 for up to 10 MMscfpd;
· The previously announced proposed acquisition of indirect interests in three East African hydropower projects is targeted to complete in Q1 2026. The assets include the 255 MW Bujagali power plant, with a 13-year operating and payment track record, and two advanced-stage development projects, marking Savannah’s potential for entry into five new countries – Uganda, Burundi, the Democratic Republic of the Congo (the “DRC”), Malawi and Rwanda;
· Continuing to progress our existing priority Power Division projects, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon;
· Subject to a satisfactory agreement being reached with the Government of Niger, our subsidiary is considering commencing a four-well testing programme and/or a return to exploration activity in the R1234 PSC contract area in 2026/27; and
· Actively reviewing opportunities in both the thermal and renewable power sector, with the expectation of announcing transaction(s) currently under consideration over the course of the next 24 months in the African power space.
Financial (unaudited)
· 11M 2025 Total Revenues2 of US$218.1 million (11M 2024: US$226.7 million) and 11M 2025 cash collections of US$260.8 million, an increase of 5.5% on the prior year (11M 2024: US$247.3 million);
· As at 30 November 2025, cash balances were US$59.8 million (31 December 2024: US$32.6 million) and net debt stood at US$652.5 million (31 December 2024: US$636.9 million). Gross debt as at 30 November 2025 was US$715.3 million of which only US$39.3 million (5.5%) was recourse to the Company, with the balance sitting within subsidiary companies on a non-recourse basis;
· The Trade Receivables balance as at 30 November 2025 was US$506.9 million, a 5.9% improvement on year-end 2024 (31 December 2024: US$538.9 million); and
· Following the previously announced increase in the Accugas debt facility from NGN340 billion to up to approximately NGN772 billion (the “Transitional Facility”), as at 30 November 2025, there was a remaining principal balance under the US$ Facility of approximately US$25 million. It is expected that the remaining residual principal amount outstanding will be fully repaid within the permitted tenor of the US$ Facility.
Operational Update
Hydrocarbons Division
Average gross daily production was 19.1 Kboepd for 11M 2025 (11M 2024: 22.8 Kboepd), of which 84% was gas (11M 2024: 88%)1;
On 10 March 2025, we announced the completion of the SIPEC Acquisition. Following completion, we commenced a planned production expansion programme that has already seen Stubb Creek gross daily production increase to 3.3 Kbopd, approximately 24% above the 2024 average. The full programme, expected to take up to 18 months, is anticipated to raise gross production to as much as 4.7 Kbopd. In parallel, we are evaluating an alternative, lower capex option that could deliver a faster production ramp up, with plateau production sustained for a longer period at a slightly lower rate than under the original expansion programme.
The compression project at the Uquo CPF was completed and fully commissioned. This project, which was delivered approximately 10% under the original US$45 million budget, is expected to allow us to maximise the production from our existing and future gas wells.
The Company’s Accugas subsidiary agreed a contract extension with CHGC to end December 2026 to supply up to 10 MMscfpd of gas. This represents the fourth such extension to the original contract signed with CHGC in February 2022. CHGC is a major gas distribution company situated in the South-South region of Nigeria, operating a 17 km gas pipeline infrastructure network providing natural gas to industrial and commercial users in the Trans Amadi Industrial Area of Port Harcourt as well as the greater Port Harcourt Area, Nigeria.
Well site construction is in the final stages for the Uquo NE development well and is expected to be completed this year. This follows the earlier signing of a turnkey drilling contract in preparation for a planned two-well drilling campaign on the Uquo Field. Drilling for Uquo NE is scheduled to begin in January 2026, with first gas targeted by the end of Q1 2026 and forecast to deliver gas volumes of up to 80 MMscfpd. Well site preparation has also commenced on the Uquo South exploration well, which is targeting an Unrisked Gross GIIP of 131 Bscf of incremental Prospective gas Resources on the Uquo licence area.
The Company notes the supportive public statements made by various officials of the Government of Nigeria during 2025 regarding the Nigerian electricity sector, stating that His Excellency President Bola Tinubu has approved a US$2.6 billion financing package to assist companies operating within the power industry settle outstanding verified invoices to power generation companies (“Gencos”) and subsequently to gas supply companies. In this regard, the Government successfully launched a NGN590 billion first tranche bond issuance in Q4 2025, as part of a wider NGN4 trillion bond programme to settle verified legacy invoices owed to Gencos and gas suppliers. This has created renewed positive momentum in the discussions Accugas Ltd, an 80% Savannah owned subsidiary, is having with its offtakers that are Gencos around the repayment of the Company’s outstanding receivables balance in an accelerated manner.
We continue to actively engage with the Government of Niger around our forward work programme plans in country. Subject to a satisfactory agreement being reached with the Government, our subsidiary is considering commencing a four-well testing programme and/or a return to exploration activity in the R1234 PSC contract area in 2026/27. The R3 East development plan, itself, has been significantly re-worked since the last published Niger Competent Persons’ Report (“CPR”) of December 2021, with a plateau production rate of around 10 Kbopd now assumed (previously 5 Kbopd). The Company has updated its internal management estimates of the potential PV10 value (on an unrisked basis) at an asset level basis for R3 East to US$184.4 million (vs the last CPR asset value estimate of US$150 million). Assuming a successful well test programme is conducted, we would look to accelerate plans to commence commercial oil production from the R3 East Area and intend to incorporate the data acquired into our field development plan.
Power Division
In 2025, we have repositioned our power sector business model to pursue operating asset opportunities in both the thermal and renewable energy spaces alongside interests in large scale renewable energy development projects.
Proposed Acquisition of Three East African Hydropower Projects
On 19 September 2025, we announced the proposed acquisition of interests in three East African hydropower projects with the signing by our wholly owned subsidiary, Savannah Energy EA Limited, of a Share Purchase Agreement (“SPA”) with Norfund, the Norwegian investment fund for developing countries, to acquire its current 50.1% interest in Klinchenberg for a total consideration of up to US$65.4 million (the “Klinchenberg Transaction”). Klinchenberg has interests in a portfolio of hydropower assets, as set out below:3
· an indirect 13.6% interest in the operating 255 MW Bujagali run-of-river hydropower plant (“Bujagali”) in Uganda;
· an indirect 12.3% interest in the 361 MW Mpatamanga hydropower development project (“Mpatamanga”) in Malawi; and
· an indirect 9.8% interest in the 206 MW Ruzizi III hydropower development project (“Ruzizi III”) spanning Burundi, the DRC and Rwanda.
The Klinchenberg Transaction is targeted to complete in Q1 2026.
Existing Projects
We continue to progress our existing portfolio of wind, solar and hydroelectric projects, with our principal focus projects being on the up to 250 MW Parc Eolien de la Tarka project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon.
Our Parc Eolien de la Tarka project has made significant progress in the year to date, with the Minister of Energy confirming that the project is on the Government’s list of priority projects and, as such, is included in the Niger Energy Compact document adopted in Dar es Salaam during the Mission 300 Africa Energy Summit held in January this year. We are continuing to progress the Environmental and Social Impact Assessment which we expect to complete and submit to the relevant authorities in early 2026. Having officially obtained favourable opinions for the project from both the regulator and the strategic agency in charge of PPPs, we continue to seek to negotiate outline terms in relation to the project’s proposed power purchase agreement and continue to work on the project in close collaboration with the International Finance Corporation (World Bank) and the US International Development Finance Corporation.
Negotiations with the Government of Cameroon are at an advanced stage regarding a Joint Development Agreement for the up to 95 MW Bini a Warak hybrid hydroelectric and solar project. This is expected to replace the Memorandum of Agreement signed in April 2023 and secure the terms under which Savannah will collaborate with the Government of Cameroon to develop the project further. We also plan to introduce a development partner to the project, alongside Savannah, during the next development phase.
Future M&A Activity
The Company continues to view mergers and acquisitions activity as a core driver of potential future value creation and is actively pursuing opportunities across both the hydrocarbon and renewable energy sectors.
Savannah is in an exclusivity period in respect of the proposed acquisition of majority interests in a portfolio of renewable projects located in Sub-Saharan Africa, with an aggregate gross capacity in excess of 100 MW and a strong payment history. The proposed acquisition would also include a portfolio of renewable development projects in the same country with a targeted gross capacity of approximately 40 MW. The transaction, which remains subject to the execution of long-form documentation and other customary conditions, is envisaged to involve a potential gross consideration in the US$70 million to US$90 million range and would be expected to be funded through a combination of debt and cash resources.
This proposed acquisition represents the most advanced transaction currently being progressed by Savannah. However, shareholders are advised that there can be no certainty that the transaction will proceed on the above summarised terms or be completed at all. The Company maintains an active business development pipeline comprising a number of potential transactions at various stages of evaluation, although no other opportunities have, at this stage, reached such a level to necessitate disclosure under applicable regulations. The Business development pipeline is sufficiently large that we are however confident of announcing further transaction(s) over the course of the next 24 months in the African oil and gas and power space.
Financial Update (unaudited)
11M 2025 Performance Highlights
11M 2025 Total Revenues2 were US$218.1 million (11M 2024: US$226.7 million) and 11M 2025 cash collections were US$260.8 million, an increase of 5.5% over the comparable prior year period (11M 2024: US$247.3 million).
As at 30 November 2025, cash balances were US$59.8 million (31 December 2024: US$32.6 million) and net debt stood at US$652.5 million (31 December 2024: US$636.9 million). This included debt associated with the SIPEC Acquisition and, for comparison purposes, if this were excluded, net debt would have further reduced to US$609.4 million. It should be noted that only 5.5% of outstanding debt as at 30 November 2025 was recourse to Savannah, with the balance sitting within subsidiary companies on a non-recourse basis.
The Trade Receivables balance as at 30 November 2025 was US$506.9 million, a 5.9% improvement on year-end 2024 (31 December 2024: US$538.9 million). This relates primarily to amounts due under various gas sales agreements in Nigeria. Delivering an increase in our rate of cash collections in Nigeria remains a key focus area for the business in 2026.
Debt Facilities
In January 2024, a NGN 340 billion term facility was signed by Accugas with a consortium of five Nigerian banks (the “Transitional Facility”). This facility was fully utilised earlier this year with the resulting funds converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility. In October 2025, we signed agreements with the consortium of five Nigerian banks to increase the Transitional Facility to up to approximately NGN772 billion enabling the remaining outstanding US$ balance to be converted into Naira. As at 30 November 2025, there was a remaining residual principal amount outstanding under the US$ Facility of approximately US$25 million, which is expected to be fully repaid within the permitted tenor of the US$ Facility. This process, when complete, is expected to align Accugas’ debt facility with the currency in which gas revenues are received.
Arbitration Update
Our wholly owned subsidiary, SCI, commenced arbitral proceedings in 2023 against the Government of the Republic of Chad in response to the March 2023 nationalisation of SCI’s rights in the Doba fields in Chad, and other breaches of SCI’s rights. Another wholly owned subsidiary, SMIL, commenced arbitral proceedings in 2023 in relation to the nationalisation of its investment in TOTCo, the Chadian company which owns and operates the section of the Chad-Cameroon pipeline located in Chad. SMIL has also commenced arbitral and other legal proceedings for breaches of SMIL’s rights in relation to COTCo, the Cameroon company which owns and operates the section of the Chad-Cameroon pipeline located in Cameroon. We currently expect these arbitral proceedings to be concluded in the first half of 2026.
SCI and SMIL are claiming in excess of US$775 million (plus interest which is currently estimated at in excess of US$215 million and costs) for the nationalisation of their rights and assets in Chad.4 SMIL has a claim valued at approximately US$330 million (plus interest which is currently estimated at in excess of US$67 million plus costs) for breaches of its rights in relation to COTCo.5 Whilst the Government of the Republic of Chad has acknowledged SCI’s and SMIL’s right to compensation, no compensation has been paid by the Government of the Republic of Chad to date. Savannah remains ready and willing to discuss with the Government of the Republic of Chad an amicable solution to the disputes. However, in the absence of such discussions, SCI and SMIL intend to vigorously pursue their rights in the arbitrations.
SCI is involved in further arbitral proceedings in which designates of Société des Hydrocarbures du Tchad allege breaches by SCI of the Doba fields joint operating agreement.6 SCI is defending the claims vigorously. We currently expect these arbitral proceedings to be concluded in H2 2026.
Announcement of Proposed Relationship Agreement with NIPCO Plc
and Proposed Termination of Off-market Share Buyback Agreement
Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa, announces the intended entry into a relationship agreement (the “Relationship Agreement”) with its largest shareholder, NIPCO Plc (“NIPCO”), in connection with the Company facilitating NIPCO increasing its shareholding in Savannah, as further detailed below.
NIPCO Shareholding Increase and Termination of Buyback Agreement
NIPCO proposes to acquire further existing Ordinary Shares in the Company through a series of secondary market transactions. In connection with these proposed acquisitions, the Company intends to terminate the off-market share buyback agreement (the “Buyback Agreement”) announced on 22 October 2025 and approved by shareholders on 28 November 2025.
Following termination of the Buyback Agreement, NIPCO proposes to acquire 118,083,927 of the 143,565,582 Ordinary Shares that were subject to the Buyback Agreement, which would increase NIPCO’s stake to approximately 25% of the Company’s current issued share capital.
In addition, NIPCO has indicated to the Company its intention to acquire up to a further approximately 1.5% of the Company’s current issued share capital through additional secondary market transactions with identified existing shareholders. If completed in full, these additional acquisitions would increase NIPCO’s ownership interest in Savannah to approximately 26.5% of the Company’s current issued share capital. There can be no certainty such further acquisitions will occur and to the extent that they do occur, the Company would expect to update its website to reflect the increased ownership holding.
The Relationship Agreement
The proposed Relationship Agreement is expected to provide a number of important protections for the Company and its minority shareholders, and to ensure that the Company is at all times able to carry on its business independently of NIPCO.
The Relationship Agreement is expected to include: (i) undertakings by NIPCO to exercise its voting rights in support of Board-recommended governance-related shareholder resolutions; (ii) confirmation that NIPCO has no right to board representation; (iii) an undertaking from NIPCO not to pursue any hostile takeover of the Company (subject to certain exceptions); and (iv) orderly market disposal obligations governing any future disposals of shares by NIPCO, covering both on market and off market trades, with the Company being afforded a certain period of time in the latter instance to attempt to identify an alternative purchaser (should it so choose).
The Relationship Agreement is expected to remain in force for so long as NIPCO and its affiliates hold, in aggregate, 12.5% or more of the Company’s issued share capital. Entry into the Relationship Agreement is expected to occur shortly following regulatory consultation, and NIPCO is expected to undertake to the Company imminently to agree to any amendments to the draft Relationship Agreement that may follow the regulatory consultation.
Background to termination of Buyback Agreement
In reaching its decision to terminate the Buyback Agreement, the Board, having taken appropriate external professional advice, concluded that the proposed entry into the Relationship Agreement would be of significant strategic value to the Company and its minority shareholders. In particular, the Board considered that: (1) the Relationship Agreement would deliver meaningful minority shareholder protections and provide important assurances regarding the Company’s continued operational and decision-making independence from its largest shareholder; and (2) the proposed termination of the Buyback Agreement would preserve approximately £10.05 million of the Company’s cash resources (due to the Company not having to buyback the Ordinary Shares subject to the Buyback Agreement), enhancing financial flexibility while retaining the Company’s ability to return capital to shareholders through Board-approved on-market share buybacks under the authority granted by shareholders at the general meeting held on 28 November 2025.
Director Share Purchase
The Company’s Chief Executive Officer, Andrew Knott (the “CEO”), proposes to acquire the balance of 25,481,655 Ordinary Shares that were subject to the Buyback Agreement and are not being acquired by NIPCO, thereby increasing his total interest to 292,764,370 Ordinary Shares, equal to approximately 13.8% of the Company’s current issued share capital. The Company’s Board of Directors (the “Board”) considers this additional investment, which is to be undertaken via an investment vehicle wholly owned by the CEO, to be a further demonstration of senior management’s confidence in the Company’s strategy and prospects and to enhance the alignment of senior management’s interests with those of shareholders.
Related Party Transactions
The arrangements pursuant to which the Company has agreed to terminate the Buyback Agreement and to enter into the Relationship Agreement, in connection with the intended share purchases by NIPCO and Andrew Knott, constitute related party transactions for the purposes of the AIM Rules for Companies.
The Company’s independent directors, being all of the directors other than Andrew Knott, consider, having consulted with Strand Hanson Limited, the Company’s nominated adviser, that the terms of these arrangements and the actions to be taken by the Company in connection therewith are fair and reasonable insofar as shareholders are concerned.
Zephyr Energy
Zephyr has provided a year-end update, including:
· A material increase in hydrocarbon production from the non-operated asset portfolio during the third quarter of 2025 (“Q3”), compared to the second quarter of 2025 (“Q2”);
· An active portfolio management strategy which continues to generate value and additional cash proceeds;
· An extension to the initial six-month term of the strategic partnership which was announced in Q2 and is designed to fund non-dilutive growth in the Company’s non-operated portfolio;
· A successful renewal of, and lowered interest rate on, Zephyr’s existing revolving credit facility; and
· An update on ongoing activity at the Company’s flagship project in the Paradox Basin, Utah, U.S. (the “Paradox project”), including progress towards first gas and the receipt of marketing/funding proposals.
Q3 production – initial results
· Q3 production from the Company’s non-operated asset portfolio averaged 925 barrels of oil equivalent per day (“boepd”), net to Zephyr, versus average net production in Q2 of 632 boepd.
o The increase demonstrates the impact of the $7.3 million acquisition of accretive production assets announced on 26 August 2025 (the “Acquisition”), offset by standard decline of the existing non-operated portfolio.
o As previously announced, production in Q2 and Q3 was impacted by six wells operated by Slawson Exploration (the “Slawson wells”) which were shut-in during those periods. Production from the Slawson wells recommenced in October 2025 and is expected to add additional production of circa 130 boepd, net to Zephyr, in the fourth quarter of 2025 (“Q4”).
· At 30 September 2025, Zephyr’s post-Acquisition portfolio consisted of interests in over 600 gross wells (or approximately 30 net wells) available for production, versus 228 gross wells at the end of Q2. Zephyr’s portfolio now consists of well and acreage interests in Utah, Colorado, Wyoming, Montana and North Dakota, providing diversity across multiple operators and basins.
· During Q3, the Company hedged a total of 24,000 barrels of oil (“bbls”) at a weighted average price of $65.18 per barrel of oil (“bbl”).
Non-operated portfolio management and update to strategic partnership
The Company continues to actively manage its non-operated asset portfolio to generate value for shareholders.
While the Acquisition valuation was based solely on the production assets acquired, approximately 6,350 undeveloped acres in the Williston and Powder River Basins were also acquired as part of the transaction.
Since the completion of the Acquisition, the Company has evaluated the incremental acreage to assess its current and future value potential. In parallel with this internal valuation process, the Company received an unsolicited offer for a minority of the newly acquired acreage in the Powder River Basin, Wyoming.
As the Company deemed this acreage non-core and with a significant lead time to development, a transaction was negotiated and closing occurred on 29 December 2025. Zephyr is pleased to announce it received initial cash proceeds of $1.14 million (subject to post-closing adjustments) and has not relinquished any existing production as part of the transaction.
In addition, after closing the Acquisition the Company disposed of small, operated assets in North Dakota, Wyoming and Colorado for a total consideration of a further $1.5 million (comprised of a combination of cash and assumption of near-term plugging and abandonment liabilities).
The non-operated leasehold portfolio continues to provide access to new drilling investment opportunities, and Zephyr expects more non-operated drilling activity across its portfolio in the new year. As a direct result of this, and by mutual agreement, Zephyr is pleased to have agreed an extension to the initial six-month term of the strategic partnership with a U.S. based capital provider focused on the energy sector (the “Investor”). As announced on 13 May 2025, the Investor will make available up to $100 million to fund 100% of capital expenditures related to the drilling, completing and equipping of new non-operated wells within the Williston Basin (although the parties may consider opportunities in other Rocky Mountain basins). To date, circa $2.5 million has been committed to the programme.
Extension of Revolving Credit Facility
Following the recent successful refinancing of the Company’s term loans (as announced on 20 November 2025), the Company’s senior lender has also completed its annual renewal of Zephyr’s $15.15 million revolving credit facility (the “facility”) through to 16 December 2026.
As part of the renewal, the fixed interest rate on the facility was reduced from 10% to 8.99% per annum. $11.0 million of the $15.15 million facility is currently drawn.
Paradox project update
The Company continues to make solid progress towards delivering first commercial production from the Paradox project, and is pleased to report it has reached a framework agreement with Enbridge, the owner of the pipeline positioned to provide interconnect services from Zephyr’s Powerline Road Gas Plant to the Williams Northwest Pipeline for sales to the U.S. gas market.
As detailed by the framework agreement, Enbridge will construct, own, operate, and maintain the interconnect facilities. The operations being conducted by Enbridge include survey, engineering, environmental, land and right-of-way work, as well as the design, inspection and obtaining regulatory approvals required to run bi-directional flows on the existing Enbridge pipeline. Zephyr will update shareholders on Enbridge’s timing as their operational and regulatory processes advance.
In the interim, Zephyr continues to evaluate marketing and joint venture/farm-in partners with potential to accelerate further development of the Paradox project. Given the recent strength of the western U.S. gas markets, the Company has been encouraged by the level of interest from potential partners. At present, Zephyr is in receipt of multiple proposals which could provide hydrocarbon marketing solutions and funding for additional drilling across its operated acreage. While there is no guarantee that a marketing/financing transaction will come to fruition in the near-term, Zephyr will update the market as negotiations progress.
Colin Harrington, Zephyr’s Chief Executive, said:
“2025 was an extremely active year, during which we successfully drilled, completed and tested a highly encouraging well on our Paradox acreage, and subsequently received a significant upgrade to our reserves and resource estimates. We also continued to grow our non-operated portfolio via acquisition and third-party investment, and I am pleased to see both increased production and the delivery of additional value through the divestment of non-core acreage and operations.
“I believe 2026 will bring the next significant phase of growth for Zephyr as we utilise our strong foundation to create value for shareholders. Interest in the Western U.S. gas and oil markets markedly increased during 2025, and the Company is encouraged by its ongoing discussions regarding the acceleration of Paradox development activity.
“I would like to thank our shareholders, stakeholders, advisers and employees for all their support in 2025 – and wish everyone a healthy and fulfilling 2026. We are entering the new year with strength, momentum and a clear pathway to deliver significant growth and value.”
Shareholders should be delighted with this excellent year-end update which shows in some detail quite how much has been achieved. Not only has further success been recorded at the Paradox it has grown reserves and resources estimates ‘significantly’ with encouraging signs of interest in the Western U.S. markets with ‘ongoing discussions with regard to the development activity in the basin.
The shares remain one of the most attractive in the sector and will undoubtedly feature in the upcoming Bucket List update and whilst the shares are up some 20% in the last month I think that there is still huge upside for the shares. I hope that I can persuade Colin Harrington into the TV studios in the new year for an interview as I think that 2026 is loaded with promise.
Europa Oil & Gas
Europa has announced that its associated company, Antler Global Limited, has signed a binding Farm-out Agreement with Fuhai (Beijing) Energy Limited, a wholly owned subsidiary company of the privately owned Fuhai Group New Energy Holding Co., Ltd (“Fuhai Holding”) to farm-out a 40% interest in the EG-08 production sharing contract (“PSC”) in offshore Equatorial Guinea.
The key features of the FOA include:
· Fuhai will acquire 40% working interest in EG-08 in return for funding 95% of the costs (the “Fuhai Carry”) of the Barracuda well, up to a cap of $53 million for the total well cost (“Total Well Cost”). Antler shall fund the remaining 5% of the Total Well Cost
· Well costs include drilling and testing of the 893 BCF Barracuda prospect
· Antler will retain operatorship of EG-08
· Any cost over-runs above the $53 million cap will be shared equally between Fuhai and Antler
· Upon commercial hydrocarbon sales Fuhai will have a preferential recovery right to recover the Fuhai Carry
· 45% of the Fuhai Carry will accrue interest, capped at 5% per annum, which will accrue from funding until full recovery from asset cashflows. Interest will be cancelled if the Barracuda prospect does not result in a commercial discovery
The deal remains subject to approval from the Ministry for Mining and Hydrocarbons Department of Equatorial Guinea (“MMHD”) and Overseas Direct Investment (“ODI”) approval from the Shandong Provincial government.
Europa has a 42.9% equity interest in Antler which, as a result of the FOA, holds a 40% working interest in the EG-08 PSC, with 40% held by Fuhai and the remaining 20% held by GEPetrol (Guinea Equatorial de Petróleos), the national oil company of Equatorial Guinea, representing the State’s interest.
Fuhai Holding (www.fuhaikonggu.com) is a large-scale energy and chemical business that integrates petrochemicals, logistics and distribution and ranks as one of the top 500 businesses in China. Its operations include:
· Crude oil processing capacity of 10 MT/A
· 2,000 hazardous chemical transportation vehicles with a capacity of 20 MT/A
· 800 petrol stations
· PX production of 1.5 MT/A
· PTA production of 2.5 MT/A
· Oil production from the Kenli Block in Bohai Bay, China
· 2024 Revenue of US$12.7 billion
Following further geophysical analysis of the EG-08 block the prospective volumes have remained broadly in line with previous iterations whereby Antler now believes that the block contains 2.213 TCF (Pmean), with the primary prospect being Barracuda which is estimated to be 893 BCF (Pmean), as detailed in the following table:
The net attributable percentage to Europa is 17.2%1
As a result of the FOA Antler intends to drill Barracuda at the earliest opportunity, which is expected to be during 2026.
As EG-08 PSC is pre-production, Europa recognised a loss of £2,000 in its 2024 Annual Report relating to its interest in Antler, reflecting minor pre-operational costs.
William Holland, Chief Executive Officer of Europa, said:
“This is a significant milestone for Europa and I am delighted to have entered into this agreement with Fuhai, who are undoubtedly an excellent partner and completely aligned with Antler’s ambition to drill and develop the Barracuda prospect at pace. Although the deal is still subject to MMHD and ODI approval, we are confident that this will be secured within the coming months and as such have now entered a period of detailed engineering and procurement in order to spud the well as soon as possible.
The signing of the Farm-Out Agreement with Fuhai is the culmination of three years of hard work to first identify the opportunity at EG08 and then, working as one team with Antler, to work up the prospectivity of the EG08 block then to secure an excellent partner to carry us through drilling. The farm-in is without question a great result for Europa and equates to a 2.38 for 1 carry which reflects the quality of the asset, namely the high chance of success and the size of the resource potential.
2026 is going to be a pivotal year for Europa and I look forward to updating the market as we secure the necessary approvals to conclude the transaction and continue to make progress with our plans to spud the Barracuda well.”
This looks like a good, and much needed deal for Europa and justifies CEO Will Holland’s faith in the project. The shares have run hard this year ahead of this deal but the upside is substantial and so today’s fall seems rather churlish although the travelling and arriving mantra probably applies.
And finally…
The Prem has a lot of fixtures over the New Year, tonight Burnley host the Magpies, the Cherries are at Stamford Bridge, Forest entertain the Toffees, the Hammers host the Bees, Villa go to the Gooners and Wolves are at the Theatre of Dreams.
On New Years Day a few derbies, the Eagles welcome the Cottagers, Liverpool host Leeds, Spurs are at the Bees and the Black Cats host the Noisy Neighbours.
What can you say about the cricket….? Firstly I don’t want to abandon Bazball but after a week on the hit and miss it looks like it should now be called Boozeball. With awful prep and some selections doubts I think Key is most likely in the firing line but going into the Sydney test without four front line pace bowlers out through injury asks questions of its own…
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. The writer may or may not hold investments in the companies under discussion
