Savannah Energy secures full ownership of Stubb Creek Field with additional $60M Deal

Savannah Energy, the British independent energy company, has sealed a deal worth $60 million to acquire the remaining 49 percent stake in the Stubb Creek oil and gas field from Sinopec International Petroleum Exploration and Production Corporation (SIPC). 

The acquisition solidifies Savannah Energy’s complete ownership of the Stubb Creek asset, adding to its already existing 51 percent stake through its affiliate, Universal Energy Resources Limited. 

This was made known in the company’s recent statement, highlighting its commitment to consolidating assets in Nigeria.

In the words of Savannah Energy PLC: “We are pleased to announce the finalisation of separate Share Purchase Agreements with Sinopec International Petroleum Exploration and Production Corporation and Jagal Ventures Limited, marking a significant milestone in our pursuit of projects that matter.”

Under the terms of the deal, Savannah Energy will pay $52 million in cash to acquire the majority stake from SIPC. in addition, it will allocate $9.5 million to purchase shares from Jagal Energy, further cementing its control over the Stubb Creek field.

“Savannah Energy SC Limited, a wholly owned subsidiary of Savannah, will acquire a 75 percent equity interest in SIPEC for cash consideration of $52 million,” the company elaborated. 

“The Jagal SPA will see Savannah Energy SC Limited acquire a 25 percent equity interest in SIPEC for cash consideration of $7.5 million, payable on completion, plus $2 million in deferred cash consideration payable in eight equal quarterly instalments post-completion.”

To finance this acquisition, Savannah Energy has secured a debt agreement from Standard Bank of South Africa, in addition to utilising its existing cash resources. This financing arrangement underscores the company’s confidence in the long-term viability and profitability of the Stubb Creek asset.

Looking ahead, Savannah Energy anticipates a substantial increase in gross production from the Stubb Creek field. Within the next 12 months following the completion of the transaction, the company projects production to surge from 2.7 thousand barrels of oil per day (Kbopd) to 4.7 Kbopd. This growth trajectory will be driven by an ambitious de-bottlenecking program aimed at optimising operational efficiency.