Savannah Energy Completes Acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC)

SIPEC's principal asset is the 49 per cent non-operated interest in the Stubb Creek oil and gas field which is operated and 51-per cent owned by Universal Energy Resources Limited

British independent energy company, Savannah Energy Plc, has completed its previously announced acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).

This was disclosed by the company in a statement on Friday.

According to the company, the acquisition of the remaining 49 per cent non-operated interest in the Stubb Creek oil and gas field from Universal Energy Resources Limited (a Savannah affiliate company) is being completed by JV operating company, being funded through a $60 million reserve-based lending debt facility arranged by the Standard Bank of South Africa Limited.

It was further explained that the transaction is highly accretive to the group net asset value management, with an estimated value of $194 million on a pre-debt basis.

There is also material 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 which is available for sale to Accugas customers.

At completion, the cumulative consideration paid was approximately $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, is a producing oil field with considerable undeveloped, non-associated 2C gas Resources. Oil produced at Stubb Creek field is processed through production facilities on-site 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 December 1, 2023.

Speaking on the completion of the deal, Chief Executive Officer of Savannah, Andrew Knott, 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 will increase production by almost three-quarters throughout 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.”