Oritsegbubemi Omatseyin Lagos — Savannah Energy Plc, a British independent energy company, has announced the completion of its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, SIPEC.
SIPEC’s principal asset is the 49% non-operated interest in the Stubb Creek oil and gas field which is operated and 51% owned by Universal Energy Resources Limited, a Savannah affiliate company.
According to the company, the SIPEC acquisition increases Savannah’s reserves and resources base by approximately 30% from 151 MMboe to 197 MMboe1. The deal is highly accretive to the group net asset value management, with an estimated value of $194 million on a pre-debt basis.
There is material potential production upside as Savannah now intends to commence an 18-month expansion programme which is anticipated to increase Stubb Creek Field gross production from an average of 2.7 Kbopd
in 2024 to approximately 4.7 Kbopd.
The acquisition adds 227 Bscf of 2C gross gas resources at Stubb Creek Field, securing significant additional long-term feedstock gas available for sale to Accugas customers.
Savannah said the transaction was fully funded through a drawdown under a $60 million reserve-based lending debt facility arranged by the Standard Bank of South Africa Limited.
At completion, the cumulative consideration paid was approximately US$35.1 million, inclusive of approximately $19.5 million of cash available to SIPEC, with $2 million in deferred cash consideration payable in eight quarterly instalments post-completion.
Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil field with considerable undeveloped, non-associated 2C gas Resources. Oil produced at Stubb Creek field is processed through production facilities onsite and then exported to the Qua Iboe terminal via a 25-km pipeline. The field was converted to a 20-year petroleum mining lease, PML20, in accordance with the Petroleum Industry Act 2021 and effective from Dec. 1, 2023.
Andrew Knott, Chief Executive Officer of Savannah, said: “We are delighted to announce the completion of the SIPEC acquisition, the achievement of one of our core business priorities for 2025. Our focus at the Stubb Creek Field will now turn to progressing the expansion project, which we expect to increase production by almost three quarters over the course of 2025/26.
“I look forward to updating shareholders on this in the coming months, as well as on the progress we make towards achieving the other core business priorities we outlined to shareholders earlier this month. I would like to thank the Government of Nigeria for the support that they have shown our Company in approving the SIPEC acquisition and I extend a warm welcome to the SIPEC employees joining Savannah today.”
