By Ejekwu Chidiebere
Savannah Energy PLC, the British independent energy company with focus around the delivery of “Projects that Matter” says it is pleased to announce, and in furtherance to its announcement of 19 March 2024, that it has completed acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (“SIPEC”) (the “SIPEC Acquisition”). SIPEC’s principal asset is the 49% non-operated interest in the Stubb Creek oil & gas field (“Stubb Creek Field”), which is operated and 51% owned by Universal Energy Resources Limited (a Savannah affiliate company).
The SIPEC Acquisition Savannah says, increases its “Reserves and Resources” base by approximately 30% from 151 MMboe to 197 MMboe. It also 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.”
The Company said in a statement that the transaction consideration is fully funded through a drawdown under a US$60 million Reserve-Based Lending debt facility arranged by The Standard Bank of South Africa Limited. Adding that the cumulative consideration paid upon completion was approximately US$35.1 million (inclusive of approximately US$19.5 million of cash available to SIPEC), with US$2 million in deferred cash consideration payable in eight quarterly installments post-completion.
Savannah now intends to commence, according to the statement, an up to 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.
Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil field with considerable undeveloped, non-associated 2C gas resources. As at year-end 2024, Stubb Creek Field had an estimated 11 MMstb of 2P gross oil Reserves and 515 Bscf of 2C gross gas Resources1. Commercial oil production started at Stubb Creek Field in 2015, with cumulative production of 8.1 MMstb to 31 December 2024. 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 Stubb Creek Field was converted to a 20-year petroleum mining lease in accordance with the Petroleum Industry Act 2021 and effective from 1 December 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.”