Savannah Energy PLC has announced that it has signed separate share purchase agreements 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.
Savannah has also announced that it has published an updated competent persons report (CPR), compiled by CGG Services (UK) Ltd, covering its assets in Nigeria.
SIPEC’s principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field (Stubb Creek), located in Akwa Ibom State, Nigeria. An affiliate of Savannah, Universal Energy Resources Limited, is the 51% owner and operator.
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. The transaction consideration is expected to be funded through a new bank debt facility arranged by The Standard Bank of South Africa Limited and the existing cash resources of the Company. Completion under each of the SPAs is subject to the parties’ satisfaction of customary conditions precedent, including certain regulatory approvals, as well as a mechanism ensuring that completion under both SPAs occurs simultaneously.
Andrew Knott, CEO, Savannah Energy, said: “Savannah remains committed to growing our core business in Nigeria through a combination of both value accretive acquisitions and organic projects. This is reflected in this morning’s announcement of the SIPEC acquisition. The base case acquisition has been priced in line with our expected returns criteria, with the identified upside cases (the oil de-bottlenecking and new gas sales to Accugas projects) hoped to add significant value to the Stubb Creek field over time. I would like to take the opportunity to thank the members of our team who have worked diligently on this transaction to make it happen. Thank you all.”
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/20032024/savannah-energy-to-take-control-of-stubb-creek-oil-and-gas-field-in-nigeria/