Savannah Energy expands Nigeria portfolio with 49% interest in Stubb Creek field
() , an Africa-focused oil and gas company, announced the acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria (SIPEC) via separate share purchase agreements with Sinopec International Petroleum Exploration & Production Corp (SIPC) and Jagal Ventures. Savanah also published an updated Competent Persons Report (CPR) compiled by CGG Services, covering its assets in Nigeria.
SIPEC's principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field in Akwa Ibom State, Nigeria. An affiliate of Savannah, Universal Energy Resources, is the 51% owner and operator.
The SIPC share purchase agreement will see Savannah acquire a 75% equity interest in SIPEC for a cash consideration of US$52m. The Jagal share purchase agreement will see Savannah acquire the other 25% equity interest in SIPEC for a cash consideration of US$9.5m. The transactions will be funded through a new bank debt facility arranged by The Standard Bank of South Africa as well as existing cash resources.
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Savannah expands its footprint in Nigeria through the acquisition of SIPEC, expected to contribute significant additional feedstock gas to Savannah's 80%-owned Nigerian gas processing and distribution subsidiary Accugas. Currently, Accugas has 8 major gas customers, including Calabar Generation, Lafarge Africa, and Central Horizon Gas. currently supports 20% of Nigeria's thermal power generation.
At the end of 2023, SIPEC had an estimated 8.1 MMstb of 2P oil reserves and 227 Bscf of 2C Contingent gas resources. SIPEC oil production for 2024 is estimated at an average of 1.4 Kbopd. Savannah's reserve and resource base will increase by c. 46 MMboe following the acquisition. Stubb Creek gross production should increase by c. 2.7 Kbopd to c. 4.7 Kbopd within 12 months of the acquisition through implementation of a de-bottlenecking programme.
The SIPEC acquisition was priced in line with Savannah's expected returns criteria. Identified upside e.g. the oil de-bottlenecking programme and new gas sales to Accugas customers, should add material value to Stubb Creek field over the medium term. For FY22, SIPEC accounts show income after tax of US$27.8m and total assets of US$136.5m.
Savannah's Nigerian CPR has been published by CGG and shows total gross 2P reserves of 88.6 MMboe and total gross 2C reserves of 99.7 MMboe.
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