A British company, Savannah Energy PLC, announced, yesterday, that it has acquired 100 per cent of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC) and Jagal Ventures Limited.
The acquisition, which saw the company signing separate share purchase agreements (SPAs) and valued at $61.5 million meant that the firm now owns 49 per cent share in the Akwa Ibom Stubb Creek oil field.
Savannah, in a release, also disclosed that it has published an updated competent persons report (CPR) compiled by CGG Services (UK) Ltd, covering its assets in Nigeria.
The company said SIPEC’s principal asset is a 49 per cent non-operated interest in the Stubb Creek oil and gas field in Akwa Ibom, adding that an affiliate of Savannah, Universal Energy Resources Limited, is the 51 per cent owner and operator.
According to the company, SIPC SPA will see Savannah Energy SC acquire a 75 per cent equity interest in SIPEC for cash consideration of $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 per cent equity interest in SIPEC for cash consideration of $7.5 million, payable on completion, plus $2 million in deferred cash consideration payable in eight equal quarterly installments 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.
As at year end 2023, SIPEC had an estimated 8.1 million barrels of 2P oil reserves and 227 billion standard cubic feet of 2C Contingent gas resources.
SIPEC oil production is estimated at an average for 2024 of 1,400 barrels per day. Savannah’s Reserve and Resource base will increase by approximately 46 MMboe following the completion of the SIPEC Acquisition.
It is anticipated that within 12 months following the completion of the SIPEC Acquisition, Stubb Creek gross production should increase by approximately 2.7 Kbopd to approximately 4.7 Kbopd through the implementation of a de-bottlenecking programme.
