Savannah Petroleum PLC has completed a $125m fund-raise to help fund its proposed acquisition in Nigeria, drilling campaign in Nigeria and for general corporate purposes.
The company has placed 266,462,000 new ordinary shares at a price of 35p per share in two tranches.
Part of the proceeds will support its planned reverse takeover of certain oil and gas assets in Nigeria held by Seven Energy International Limited.
Chief Executive Savannah Petroleum Andrew Knott has committed to invest US$1m in the placing.
“We are extremely pleased to be able to announce the successful results of our placing, which is a major step towards the completion of the Agreed Transaction.” Knott said.
“This fundraise was very well supported by both existing and new shareholders, and we thank them for their support. This is a clear endorsement of our strategy to expand into Nigeria and a vote of confidence in our existing Nigerien assets.”
Knott said the planned takeover of Seven’s assets is “transformational” for Savannah with the enlarged group expected to pay a dividend from its cash flow generative assets.
The deal will boost the group’s operational capability and provide a strong platform to deliver further value accretive organic and inorganic growth, he added.
Additionally, Savannah noted that Seven Energy has been holding talks with the Nigerian oil authorities regarding the potential reinstatement of asset contracts that had expired earlier this year, though at this point these interests aren’t included in the acquisition agreement (but it could be added at a later date
It would be recalled that Savannah Petroleum, a United Kingdom-based oil and gas firm had in a stock market statement said the company would raise US$125m in the share placing, and the placing price is expected to be set at 35p per share.
Seven Energy is an indigenous company established in 2004, with headquarters in Lagos and London and wholly-owned midstream company, Accugas. The company’s portfolio consists of a diversified portfolio of onshore oil and gas interest with substantial reserves and resources base in southeast and Niger Delta with three highly prospective assets in the Anambra Basin.