Savannah Energy, a British independent energy company focused on impactful projects, has completed agreements worth $60 million to acquire a 49% stake in the Stubb Creek oil and gas field in Akwa-Ibom, Nigeria, from Sinopec International Petroleum Exploration and Production Corporation (SIPC).
This transaction will grant Savannah Energy complete ownership of the Stubb Creek oil and gas field, as its affiliate Universal Energy Resources Limited already holds a 51% stake in the field. The company announced this significant consolidation of its assets in Nigeria through a formal statement.
As per the details provided by Savannah Energy, the acquisition involves a cash payment of $52 million to acquire the stake from Sinopec, along with an additional $9.5 million to purchase shares from Jagal Energy.
Key Highlights of the Deal:
- Savannah Energy PLC signed separate Share Purchase Agreements (SPAs) with SIPC and Jagal Ventures Limited to acquire 100% of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
- The SPA with SIPC involves Savannah Energy SC Limited acquiring a 75% equity interest in SIPEC for cash consideration of US$52 million.
- Additionally, the SPA with Jagal entails Savannah Energy SC Limited acquiring a 25% equity interest in SIPEC for cash consideration of US$7.5 million, along with US$2 million in deferred cash consideration payable in eight equal quarterly installments post-completion.
- The financing for the deal will be facilitated through a debt agreement from Standard Bank of South Africa, combined with Savannah Energy’s existing cash resources.
Future Projections:
- Savannah Energy anticipates a significant increase in gross production from the Stubb Creek oil and gas field within the next 12 months following the completion of this transaction.
- The company aims to raise production from 2.7 Kbopd to 4.7 Kbopd through a de-bottlenecking program.
Savannah Energy, with operations in Nigeria, Niger, and Cameroon, continues to expand its presence and strengthen its portfolio in the energy sector.
