Savannah Energy PLC said it has completed its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
SIPEC’s principal asset is the 49% non-operated interest in the Stubb Creek oil & gas field, which is operated and 51% owned by Universal Energy Resources Limited (a Savannah affiliate company).
The SIPEC Acquisition increases Savannah’s Reserves and Resources base by approximately 30% from 151 MMboe to 197 MMboe. It adds 227 Bscf of 2C gross gas Resources at Stubb Creek Field, securing significant additional long-term feedstock gas available for sale to Accugas customers.
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 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.
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Savannah 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.
Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil field with considerable undeveloped, non-associated 2C gas resources. As at year-end 2024, 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 under the Petroleum Industry Act 2021 and effective from 1 December 2023.
Chief Executive Officer of Savannah, Andrew Knott said: “We are delighted to announce the completion of the SIPEC Acquisition – achieving 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 throughout 2025/26. I look forward to updating shareholders on this in the coming months and 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.”
