Savannah Energy : Why we do what we do

Strategic Report

Why we do what we do

To make a difference you have to do things differently

Our core beliefs

1	We are focused on energy as we believe it is
the critical enabler of human activity.
	We are focused on Africa as we believe the
2	continent's energy poverty is one of the
most urgent and important problems facing
	the world today.
3	We invest in hydrocarbons AND renewables
as we believe both will be critical
	components of the 2030-50 energy mix.
4	We believe all Africans have the right to
benefit from economic development.
5	We believe that trade and private
sector investment are essential for
	economic development.

Our purpose

We are a pan-African energy and resources company seeking to deliver excellent performance for our stakeholders. We want to meaningfully contribute to the economic development of the countries in which we operate through the development of businesses and projects that make a material difference to those countries. We will continue to evolve to achieve our purpose. We are seeking to pursue Projects that Matter.

What makes us special

We are passionately focused around the achievement of our corporate purpose. We operate in jurisdictions which are often viewed as challenging by peers. We embrace these challenges as opportunities and understand that these are the jurisdictions where we can have the greatest impact. We have a growth/cash flow re-investment orientated mindset. We take a patient and long-term view as to business performance and development.

We believe in human talent development. We operate and hold ourselves accountable to high standards of performance and behaviour.

We make things happen.

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Strategic Report

1	We are focused on energy as we believe it is the critical
enabler of human activity.

Access to energy is essential for economic development and human progress. The chart below demonstrates the strong correlation between GDP per capita and power consumption per capita, using a data set which includes data from 189 countries. It clearly shows that: (1) people who have access to energy are generally wealthier than those who do not; and (2) it appears almost impossible for a country to meaningfully develop without access to power.

For example, Niger has a GDP per capita of US$584 and a power consumption per capita of 449 kWh while the United States, which has a GDP per capita of US$76,348 and a power consumption per capita of 79,480 kWh, 12,983% and 17,614% respectively. Further, energy access is positively correlated with many other key human development metrics including those associated with educational attainment, life expectancy and quality of life. Energy is clearly therefore the critical enable of human activity.

Correlation between GDP and energy use per capita: energy poverty drives economic poverty

(Note: logarithmic scale)

Energy use per capita (kWh)

100,000

10,000

1,000

100

USA

UK

Nigeria

Cameroon

Niger

250	2,500	25,000	250,000
		GDP per capita (US$)

Source: Our World in Data based on BP & Shift Data Portal, World Bank (2019).

Energy consumption as a driver of economic and human development

Improved	Increased
quality of life	GDP

Longer life expectancy

Energy

consumption

Educational attainment

	%
Increased	Increase in
number
government tax
of business
revenues
start-ups

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Why we do what we do continued

We investare focusedin hydrocarbonsAfrica asANDwe brelieven wablthescontinent'sas we believeenergyboth

2 willpovertybe criticalis onecomponentsof the most ofurgentthe 2030and important-50 energyproblemsmix. facing the world today.

				Morocco			Tunisia
						100
Population				100
with access to					Algeria		Libya
electricity (%)					100			Egypt
					70
91-100%		Western Sahara							100
		NA
61-90%
31-60%			Mauritania
			Mali
16-30%			47			Niger				Eritrea
			51
Senegal						Sudan
					19				52
							55
0-15%	70							Chad
Gambia
						11
No data	62			Burkina Faso							Djibouti
	Guinea-Bissau	Guinea		19							62
	45
	33				Nigeria
								Ethiopia
					Ghana
				Côte	55
		Sierra Leone					51
		d'Ivoire	86			C.A.R.	South Sudan
		26	70				15		7
			Liberia			Benin	Cameroon
			28		Togo	41	65					Somalia
					54	Equatorial				Uganda	50
							Republic
						Guinea			42	Kenya
						67	Gabon	of Congo			71
							92	50	Democratic			Rwanda
									Republic of			47
Africa is home to 18% of humanity, but only 56% of her					Congo			Burundi
				19	Tanzania	12
people are estimated to have access to grid connected
						40
electricity (in any form). Over 600 million of her people
lack access to electricity. Despite her size and low
electricity access, however, Africa is estimated to					Angola				Malawi
receive only 5% of all global energy investment¹.
				47
				Zambia	Mozambique	15
									31
									45
										Zimbabwe		Madagascar
										53		34

Namibia	Botswana
56
72
		Eswatini
		80
	South	Lesotho
	47
	Africa
	84

Source: World Bank.

Annual electricity consumption per person

(kWh)

USA

UK

Household fridge

Sub-Saharan Africa

05,000

Source: World Bank, EIA, The Economist.

Light bulb	% of population below World Bank
equivalent	extreme poverty rate (2022)
consumption
per person	100%
25										Population
80%										living in
										extreme
10	60%
									poverty
0.8	40%						32.0%				Access to
	20%										electricity
0.7	0.16%		0.44%
0
		US	UK	Sub-
10,000
							Saharan
	Source: World Bank, Gapminder.			Africa

In Sub-Saharan Africa, aggregate electricity consumption per person is estimated to be less than that consumed by a standard US household fridge, 8% of what an average UK citizen is estimated to consume or 3% of what an average US citizen is estimated to consume.

The impact of energy poverty in Africa is clear to see; 32% of those people living in Sub-Saharan Africa are estimated by the World Bank to be living in extreme poverty (i.e. earning less than US$2.15 per day).

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Otu Inyang, Senior Instrument Technician;

Michael Okonkwo, Operations Lead; Ibom Gas

Receiving Facility, Nigeria

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Why we do what we do continued

We invest in Hydrocarbons AND Renewables as we believe both

3 are critical components of the 2030-50 energy mix.

Energy dominates global capital and operating expenditures

Share of global non-financial corporate CAPEX by sector (%)

Estimating share of OECD GDP spent on energy end use (%)

100%															20%		Second
90%	19%	18%	18%	18%		19%	18%	19%								First	oil				Ukraine
20%	20%	21%	21%	21%	20%	20%		crisis
18%				war
80%																oil
12%	13%	14%	13%	12%	12%	13%									crisis
70%	15%	17%	17%	17%	16%	17%	18%	16%
5%	4%	4%	4%	3%	4%	4%	4%
	4%			4%
60%		12%	10%	11%	11%	11%	12%	4%	4%	6%	5%
13%	13%	14%
50%							15%	15%	15%	15%
								15%	15%
40%															12%
30%	51%	53%	54%	54%	54%	54%	53%	49%	44%	43%	43%	44%			10%
20%							42%	42%
										8%
10%
0%	2008		2010												6%			1980
	2009	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	1970		1990	200	2010	2020
	Energy & utilities	Consumer	Healthcare	IT & Comms	Industrials
Source: S&P Global Market Intelligence, S&P Global Ratings. Universe is Global Capex 2000.				Source: OECD.

Over 80% of today's global energy mix is provided by hydrocarbons, 54% of which is from oil and gas. Approximately 42% of all global capital expenditures relate to energy projects. Similarly, 18% of OECD GDP is spent on energy end use. It is therefore clear that: (1) oil and gas production

is a critical contributor to the current functioning of the global economy and the maintenance of human living standards; and (2) this is clearly evidenced by the money people are prepared to spend to sustain their "status quo" quality of life.

Energy transitions take (a lot of) time

It has taken decades for major energy sources to provide a significant share of global supply:

	Coal									Crude oil									Natural Gas							Modern Renewables
	50 years to contribute 40%			50 years to contribute 30%				50 years to contribute 20%			Still contributes only 5%
	of the global energy mix			of the global energy mix				of the global energy mix			of the global energy mix
50%
45%
40%							40%
35%
30%																			30%
25%																															20%
20%
15%
10%
5%																																					5%
0
0	10	20	30	40	50		60	0	10	20	30	40	50		60	0	10	20	30	40	50		60	0	10	20	30	40	50
1840										1915										1930									2015
												Years after energy source begins supplying 5% of global demand

Sources: Vaclav Smil. Modern renewables include: wind, solar, and modern biofuels; Bill Gates: How to Avoid a climate disaster

Share of global energy supply %

60

Previous energy transitions took over 50 years, and the modern renewable energy transition only began around 2015. The extent to which the world requires oil and gas in the future will depend on the absolute and relative rate of renewable energy and carbon mitigation technological improvements. While it is reasonable to suggest that these processes are generally faster today than in earlier periods, it would also

seem reasonable to recognise that the pace of the global energy transition is likely to take a relatively long time (and foolish for the world to plan on a different assumption).

Further, it is important to note that previous energy transitions have not resulted in the complete displacement of older energy sources with, for example, coal still providing around 26% of the global energy mix in 2022.

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