Savannah Moves to a Fuller Control of Stubb Creek Oil Field - Africa’s premier report on the oil, gas and energy landscape.

Savannah Moves to a Fuller Control of Stubb Creek Oil Field

Savannah Energy, a UK minnow, has signed separate Share Purchase Agreements (SPAs) with Sinopec International Petroleum Exploration and Production Corporation (SIPEC) and Jagal Ventures Limited (Jagal) to acquire 100% of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited

SIPEC’s principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field, located onshore Akwa Ibom State, Nigeria. “An affiliate of Savannah, Universal Energy Resources Limited, is the 51% owner and operator”, Savannah explains.

Savannah holds 62.5% equity interest in Universal Energy. A take over of SIPEC will see Savannah controlling Stubb Creek field, a marginal hydrocarbon accumulation which produces 2,700Barrels of Oil Per Day (BOPD).

“The SIPEC SPA will see Savannah Energy SC Limited (a wholly owned subsidiary of Savannah) acquire a 75% equity interest in SIPEC for cash consideration of $52Million, payable on completion and subject to customary adjustments for a transaction of this nature from 1 September 2023”, Savannah notes in the release..

The Jagal SPA will see Savannah Energy SC Limited acquire a 25% equity interest in SIPEC for cash consideration of $7.5Million (without adjustment), payable on completion, plus $2Million 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.

As at year end 2023, SIPEC had an estimated 8.1MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. SIPEC oil production is estimated at an average for 2024 of 1.4 Kbopd. Savannah’s Reserve and Resource base will increase by approximately 46 MMboe following completion of the SIPEC Acquisition.

Savannah says it anticipates that, within 12 months following completion of the SIPEC Acquisition, Stubb Creek gross production should increase by approximately 2.7Kbopd to approximately 4.7KBOPD through implementation of a de-bottlenecking programme.

 

Share Article


Sponsored

No comments yet.

Leave a comment

Comment form

All fields marked (*) are required

© 2024 Festac News Press Ltd..