Savannah Vitality PLC has signed agreements to take over Sinopec Worldwide Petroleum Exploration and Manufacturing Firm Nigeria Ltd. (SIPEC), the British firm’s co-venturer within the Stubb Creek oil and fuel area in Nigeria, for $61.5 million.
SIPEC owns a 49 % curiosity within the confirmed onshore asset within the Akwa Ibom State, which sits on the southern coast of the Western African nation. Savannah affiliate Common Vitality Assets Ltd. operates Stubb Creek with a 51 % curiosity.
London-based Savannah has now inked separate share buy agreements (SPAs) with the Chinese language and Nigerian homeowners of SIPEC—Sinopec Worldwide Petroleum Exploration and Manufacturing Corp. (SIPC) and Jagal Ventures Ltd., the completion of which is able to lead to Savannah taking full possession of Stubb Creek, SIPEC’s principal asset.
“The SIPC SPA will see Savannah Vitality SC Restricted (a completely owned subsidiary of Savannah) purchase a 75 % fairness curiosity in SIPEC for money consideration of US$52 million, payable on completion and topic to customary changes for a transaction of this nature from 1 September 2023”, Savannah stated in a information launch. “The Jagal SPA will see Savannah Vitality SC Restricted purchase a 25 % fairness curiosity in SIPEC for money consideration of US$7.5 million (with out adjustment), payable on completion, plus US$2 million in deferred money consideration payable in eight equal quarterly installments post-completion”.
Savannah concurrently launched an unbiased evaluation displaying gross confirmed and possible (2P) oil and condensate reserves of 11.9 million inventory tank barrels (MMstb), in addition to a gross finest contingent fuel estimate (2C) of 515.3 billion cubic toes (Bcf), in Stubb Creek as of January 1.
The so-called competent particular person’s report by CGG Providers (UK) Ltd. additionally confirmed that Savannah’s 80 percent-held Uquo area in Nigeria had 456.2 Bcf of gross 2P fuel, 82.8 of gross 2C fuel and 600,000 MMstb of gross confirmed and possible oil as of January 1.
Savannah additionally holds an 80 % curiosity in Accugas Midstream Enterprise, which owns and operates the Uquo central fuel processing facility and 260-kilometer (161.6 miles) pipeline community. The processing facility has a declared capability of 200 million cubic toes a day.
SIPEC in the meantime had an estimated 8.1 MMstb of 2P oil reserves and 227 Bcf of 2C fuel as of yearend, whereas its oil manufacturing is estimated to common 1,400 barrels per day (Kbpd) this 12 months, Savannah stated within the press launch.
“Savannah’s Reserve and Useful resource base will improve by roughly 46 MMboe [million barrels of oil equivalent] following completion of the SIPEC Acquisition”, it stated.
“It’s anticipated that, inside 12 months following completion of the SIPEC Acquisition, Stubb Creek gross manufacturing ought to improve by roughly 2.7 Kbopd to roughly 4.7 Kbopd by means of implementation of a de-bottlenecking program”.
Gasoline property from the SIPEC acquisition will increase the quantity of feedstock on the market to Accugas, which presently has eight principal fuel clients together with thermal energy station Calabar Era Co. Ltd. and industrial gamers Central Horizon Gasoline Co. Ltd. and Lafarge Africa PLC, Savannah stated.
“With a weighted common remaining contract lifetime of 14 years, Savannah’s pure fuel provides are a important enabler of the Nigerian economic system and presently assist roughly 20 % of Nigeria’s thermal energy era”, the media launch added.
“Since Savannah introduced its intention to accumulate Accugas in late 2017: (i) volumes of fuel transported; (ii) the variety of important clients served; and (iii) the Firm’s contribution to thermal energy era in Nigeria have every greater than doubled”.
Savannah expects to fund the SIPEC buy by means of firm money and a brand new financial institution debt facility organized by The Commonplace Financial institution of South Africa Ltd.
“Completion beneath every of the SPAs is topic to the events’ satisfaction of customary circumstances precedent, together with sure regulatory approvals, in addition to a mechanism guaranteeing that completion beneath each SPAs happens concurrently”, it stated.
Savannah chief government Andrew Knott stated, “Savannah stays dedicated to rising our core enterprise in Nigeria by means of a mixture of each worth accretive acquisitions and natural initiatives”.
To contact the writer, e mail jov.onsat@rigzone.com