Savannah Energy PLC, a British independent energy company committed to delivering impactful projects, has successfully completed its acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC). This follows the company’s initial announcement on March 19, 2024. SIPEC’s main asset is a 49% non-operated stake in the Stubb Creek oil and gas field, which is operated and 51% owned by Universal Energy Resources Limited, a Savannah affiliate.
The acquisition significantly boosts Savannah’s reserves and resources, increasing them by approximately 30%—from 151 million barrels of oil equivalent (MMboe) to 197 MMboe. Additionally, it brings an estimated 227 billion standard cubic feet (Bscf) of 2C gross gas resources at Stubb Creek Field, ensuring a larger supply of long-term feedstock gas for Accugas customers.
Funding for the transaction was secured through a drawdown from a $60 million Reserve-Based Lending debt facility arranged by The Standard Bank of South Africa Limited. The total consideration paid at completion amounted to approximately $35.1 million, which includes $19.5 million in cash available to SIPEC. An additional $2 million in deferred cash consideration will be paid in eight quarterly installments post-completion.
Savannah now plans to embark on an expansion program lasting up to 18 months, aimed at increasing gross production at Stubb Creek Field. The output is projected to rise from an average of 2,700 barrels of oil per day (Kbopd) in 2024 to approximately 4,700 Kbopd.
Located in Akwa Ibom State, Nigeria, Stubb Creek Field is a producing oil field with significant undeveloped, non-associated 2C gas resources. As of year-end 2024, the field held an estimated 11 million stock tank barrels (MMstb) of 2P gross oil reserves and 515 Bscf of 2C gross gas resources. Since the start of commercial oil production in 2015, cumulative production has reached 8.1 MMstb as of December 31, 2024. Oil from the field is processed on-site and transported via a 25-kilometer pipeline to the Qua Iboe terminal. In line with the Petroleum Industry Act 2021, the field was converted into a 20-year petroleum mining lease, effective from December 1, 2023.
Commenting on the acquisition, Savannah’s Chief Executive Officer, Andrew Knott, stated:
“We are delighted to announce the completion of the SIPEC Acquisition – the achievement of one of our core business priorities for 2025. 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. 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.
“I would like to thank the Government of Nigeria for the support that they have shown our Company in approving the SIPEC Acquisition, and I extend a warm welcome to the SIPEC employees joining Savannah today.”
For more updates on energy sector developments and business news in Nigeria, visit LouisaOlaniyi.com.ng for more in-depth analyses.
