Savannah Energy, a British independent energy company has reached an agreement to acquire 49% holding in Stubb Creek Oil and gas field.. The shares are currently held by Sinopec International Petroleum Exploration and Production Corporation (SIPC). The deal was said to be valued at $60 million.
According to the statement by Savannah Energy on Tuesday, on the latest consolidation of its assets in Nigeria “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.”
It further explained that within the next 12 months following this transaction, the company 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.
The Chief Executive Officer of Savannah Energy, Andrew Knott, commenting on the deal 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 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.”
