Savannah Energy PLC, the British independent energy company, announced that it has completed its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (“SIPEC”).
The company, in a statement, said SIPEC’s principal asset is the 49 per cent non-operated interest in the Stubb Creek oil & gas field, which is operated and 51 per cent owned by Universal Energy Resources Limited (a Savannah affiliate company).
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It explained that the SIPEC acquisition increased Savannah’s Reserves and Resources base by approximately 30 per cent from 151 MMboe to 197 MMboe, adding 227 Bscf of 2C gross gas Resources at Stubb Creek Field, securing significant additional long-term feedstock gas available for sale to Accugas customers.
“Savannah Energy PLC, the British independent energy company focused on the delivery of projects that matter, is pleased to announce, further to its announcement of 19 March 2024, that it has completed its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (“SIPEC”) (the “SIPEC Acquisition”),” the statement said.
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It noted that the transaction consideration is fully funded through a drawdown under a $60 million Reserve-Based Lending debt facility arranged by the Standard Bank of South Africa Limited.
At completion, it said 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 installments post-completion.
“Savannah now intends to commence an up to 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,” it said
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It further explained that the Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil field with considerable undeveloped, non-associated 2C gas resources.
As of year-end 2024, it said Stubb Creek Field had an estimated 11 MMstb of 2P gross oil Reserves and 515 Bscf of 2C gross gas Resources1.
“Commercial oil production started at Stubb Creek Field in 2015, with cumulative production of 8.1 MMstb to 31 December 2024.
“Oil produced at Stubb Creek Field is processed through production facilities onsite and then exported to the Qua Iboe terminal via a 25 km pipeline. The Stubb Creek Field was converted to a 20-year petroleum mining lease in accordance with the Petroleum Industry Act 2021 and effective from 1 December 2023,” it added.
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Andrew Knott, Chief Executive Officer of Savannah, 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 to increase production by almost three quarters over the course of 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.”
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