Savannah Energy takes over Sinopec’s Nigerian unit SIPEC in $37m deal
Savannah Energy Plc has announced the completion of the acquisition of the 100 percent of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
The British independent energy company said in March last year that it signed share purchase agreements (SPAs) with Sinopec International Petroleum Exploration and Production Corporation, a subsidiary of Chinese energy giant Sinopec Group, and Jagal Ventures Limited for the acquisition.
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 company said on Monday.
”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,” it said.
The transaction is fully funded through a drawdown under a $60 million reserve-based lending debt facility arranged by The Standard Bank of South Africa Limited, according to the statement.
Savannah said it paid about $35.1 million (inclusive of approximately $19.5 million of cash available to SIPEC) at completion, with $2 million in deferred cash consideration payable in eight quarterly installments post-completion.
The company intends to commence an up to 18-month expansion programme, which is anticipated to increase Stubb Creek Field gross production from an average of 2,700 barrels of oil per day (bopd) in 2024 to about 4,700 bopd.
Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil field with considerable undeveloped, non-associated 2C gas resources.
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.
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.”
