As of the end of 2023, SIPEC had an estimated 8.1 million stock tank barrels of 2P oil reserves. Credit: maxim ibragimov/Shutterstock.

Savannah Energy has agreed to acquire its partners’ 49% interest in the Stubb Creek oil and gas field in Nigeria.  

The London-listed company’s affiliate, Universal Energy Resources, currently holds a 51% stake in the field in Nigeria’s Akwa Ibom State. 

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Savannah’s deal involves two separate share purchase agreements (SPAs) with Sinopec International Petroleum Exploration and Production Corporation (SIPC) and Jagal Ventures (Jagal).  

These SPAs target the complete outstanding share capital of Sinopec International Petroleum Exploration and Production Company Nigeria (SIPEC).  

SIPEC’s key asset is the 49% non-operated interest in the Stubb Creek field. 

Under the SIPC SPA, Savannah Energy SC, a wholly owned subsidiary of Savannah, will acquire a 75% equity interest in SIPEC for a cash consideration of $52m (N77.01bn).  

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The Jagal SPA will see Savannah Energy SC purchase a 25% equity interest in SIPEC for $7.5m in cash upon completion, plus an additional $2m in deferred cash consideration. 

As of the end of 2023, SIPEC had an estimated 8.1 million stock tank barrels of 2P oil reserves and 227 billion standard cubic feet of 2C Contingent gas resources.  

The completion of the SIPEC acquisition is expected to augment Savannah’s reserve and resource base by approximately 46 million barrels of oil equivalent.  

It is also anticipated that within one year following the acquisition, Stubb Creek’s gross production could increase by around 2,700 barrels of oil per day (bopd) to roughly 4,700bopd.  

Furthermore, this acquisition will provide Savannah’s 80% owned Nigerian gas processing and distribution subsidiary, Accugas, with additional feedstock gas for sale.  

Savannah Energy CEO Andrew Knott said: “Savannah remains committed to growing our core business in Nigeria through a combination of both value accretive acquisitions and organic projects. This is reflected in this morning’s announcement of the SIPEC acquisition.  

“The base case acquisition has been priced in line with our expected returns criteria, with the identified upside cases (the oil de-bottlenecking and new gas sales to Accugas projects) hoped to add significant value to the Stubb Creek field over time.” 

The completion of the SPAs is contingent upon the fulfilment of customary conditions precedent, including regulatory approvals.