British independent energy firm Savannah Energy has signed Share Purchase Agreements (SPA) with Chinese energy and chemical company Sinopec International Petroleum Exploration and Production Corporation (SIPC) and Nigerian energy conglomerate Jagal Ventures Limited. The SPAs will see Savannah Energy acquire 100% of the outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
At a cost of $52 million, Savannah Energy will acquire SIPC’s 75% stake in SIPEC – payable on completion and subject to customary adjustments. Additionally, the British firm will obtain a 25% stake in SIPEC under the agreement with Jagal Ventures Limited for a cash consideration of $7.5 million – payable on completion without adjustment – in addition to $2 million in deferred cash consideration.
The deals enable Savannah Energy to gain access to gas resources from the Stubb Creek oil and gas field to supply power generators and industrial clients across Nigeria via its subsidiary Accugas Limited. SIPEC currently holds a 49% stake in the Stubb Creek field, where Savannah Energy already possesses a 51% interest through its affiliate, Universal Energy Resources.
Savannah Energy will implement a de-bottlenecking program to boost gross production at Stubb Creek from 2,700 barrels of oil per day (Kbopd) to 4.7 Kbopd within 12 months of finalizing the SIPEC acquisition.
