Savannah Energy has finalized agreements valued at $60 million to acquire Sinopec International Petroleum Exploration and Production Corporation (SIPC) 49% holding in Stubb Creek oil and gas field.
The deal will bring complete ownership of the Stubb Creek oil and gas field in Nigeria to Savannah Energy whose affiliate Universal Energy Resources Limited owns 51% stake in the oil field. This was disclosed in a statement by the company on the latest consolidation of its assets in Nigeria.
Savannah Energy will spend $52 million in cash to acquire a stake in the Stubb Creek oil and gas field from China’s Sinopec, and an additional $9.5 million to purchase shares from Jagal Energy.
What the company said,
- “Savannah Energy PLC, the British independent energy company focused on the delivery ofP rojects that M atter, announces that it has signed separate Share Purchase Agreements (“SPAs”) with Sinopec International Petroleum Exploration and Production Corporation (“SIPC”) and Jagal Ventures Limited (“Jagal”) to acquire 100% of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (“SIPEC”) (the “SIPEC Acquisition”).”
- “The SIPC SPA will see Savannah Energy SC Limited (a wholly owned subsidiary of Savannah) acquire a 75% equity interest in SIPEC for cash consideration of US$52 million, payable on completion and subject to customary adjustments for a transaction of this nature from 1 September 2023. The Jagal SPA will see Savannah Energy SC Limited acquire a 25% equity interest in SIPEC for cash consideration of US$7.5 million (without adjustment), payable on completion, plus US$2 million in deferred cash consideration payable in eight equal quarterly instalments post-completion.”
Financing for the deal
According to the statement, the deal will be financed through a debt agreement from Standard Bank of South Africa coupled with existing cash resources of the company.
The company noted that within the next 12months following this transaction, it projects gross production from the field to increase from 2.7 Kbopd to 4.7 Kbopd through what it calls a de-bottlenecking program. Savannah Energy has operations in Nigeria, Niger and Cameroon.
