31st Jul 2015 09:00
LONDON (Alliance News) - Savannah Petroleum PLC on Friday said the production sharing contract for the R3/R4 licence area in Niger has been signed by the company and local authorities in the country.
Following the contract signature, a USD28 million payment soon will be made to the Niger government by Savannah.
The signing of the deal comes after shareholders in Savannah approved its large share placing in order to back its acquisition of the licence area. Savannah conducted a conditional placing earlier in July of 61.7 million shares at 38 pence per share to raise GBP36 million, which was approved by shareholders at the company's general meeting Thursday.
"The signing of the R3/R4 PSC is another landmark transaction for Savannah. We have now licensed around 50% of the Agadem Rift Basin, which the board believes places the company in a very strong position for the future given our assessment of the scale, risk profile and cost structure of our assets," said Andrew Knott, Savannah's chief executive.
Savannah shares were up 1.3% to 40.03 pence on Friday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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