Savannah Energy acquires SIPEC

Savannah Energy PLC, a British independent energy company, has announced the completion of its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).

In a statement on Monday, Savannah said the acquisition has expanded its reserves and resources base by approximately 30 percent, rising from 151 million barrels of oil equivalent (mmboe) to 197 mmboe.

The oil company added that the acquisition brings in an additional 227 billion standard cubic feet (Bscf) of “2C gross gas Resources at Stubb Creek Field, securing significant additional long-term feedstock gas available for sale to Accugas customers”.

“SIPEC’s principal asset is the 49% non-operated interest in the Stubb Creek oil & gas field (“Stubb Creek Field”), which is operated and 51% owned by Universal Energy Resources Limited (a Savannah affiliate company),” Savannah said.

“The transaction consideration is fully funded through a drawdown under a US$60 million Reserve-Based Lending debt facility arranged by The Standard Bank of South Africa Limited.

“At completion the cumulative consideration paid was approximately US$35.1 million (inclusive of approximately US$19.5 million of cash available to SIPEC), with US$2 million in deferred cash consideration payable in eight quarterly installments post-completion.”

Following the acquisition, Savannah announced plans for an 18-month expansion programme aimed at increasing gross production at Stubb Creek Field from an average of 2.7 kbdopd in 2024 to approximately 4.7 kbdopd.

“Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil field with considerable undeveloped, non-associated 2C gas resources,” the statement added.

“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 in accordance with the Petroleum Industry Act 2021 and effective from 1 December 2023.”

SAVANNAH ENERGY TARGETS PRODUCTION INCREASE AT STUBB CREEK FIELD 

Andrew Knott, chief executive officer (CEO) of Savannah, described the acquisition as a key milestone for the company’s 2025 business strategy.

“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,” Knott said.

“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.”

Knott expressed gratitude to the Nigerian government for its support in approving the deal and extended a warm welcome to SIPEC employees joining Savannah.