UK-listed Savannah Energy Acquires Nigerian Oil Assets for $35 Million to Boost Production

Savannah Energy, a UK-listed independent energy company, has successfully completed its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria (SIPEC) for $35 million. This move, initially disclosed in March 2024, significantly expands Savannah’s reserves and resource base, increasing it by 30%, from 151 million barrels of oil equivalent (mboe) to 197 mboe. SIPEC, which holds a 49% non-operated stake in Nigeria’s Stubb Creek oil and gas field, adds substantial value to Savannah’s portfolio.

The Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a key asset for Savannah. As of late 2024, the field had 11 million stock tank barrels of probable oil reserves and 515 billion standard cubic feet of gas resources. The acquisition is expected to provide a significant production upside. Savannah plans an expansion program to increase the field’s output from 2,700 barrels of oil per day (bopd) to around 4,700 bopd over the next 18 months, with the added benefit of long-term feedstock gas for its Accugas customers.

The acquisition is financed through a drawdown from a $60 million debt facility arranged by Standard Bank of South Africa. The total transaction consideration amounts to $35.1 million, including $19.5 million in available cash to SIPEC, with an additional $2 million in deferred payments scheduled over eight quarterly installments. Savannah CEO Andrew Knott expressed optimism about the project, emphasizing that the expansion of Stubb Creek will be one of their core business priorities in 2025.

The deal follows Savannah’s decision to terminate its planned acquisition of Petronas’ oil and gas operations in South Sudan in August 2024. With the successful completion of the SIPEC acquisition, Savannah is poised to strengthen its presence in Nigeria’s energy sector, while also benefiting from the Nigerian government’s support in facilitating the transaction.

source: business day