Savannah Energy Plc, a British independent energy firm, has finalized the acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC).
The $35.1 million transaction will boost Savannah Energy’s total reserves and resources by 30% from the current 151 million barrels of oil equivalent (MMboe) to 197 MMboe.
The acquisition includes 227 billion standard cubic feet (Bscf) of 2C gross gas resources at the Stubb Creek oil and gas field, positioning the company for long-term gas supply expansion to its Accugas customers.
Strengthening Nigerian Operations
SIPEC holds a 49% non-operating interest in the Stubb Creek Field, located in Akwa Ibom State while the remaining 51% is owned and operated by Universal Energy Resources Limited, a Savannah affiliate.
The field, which commenced commercial oil production in 2015, has cumulative production of 8.1 million stock tank barrels (MMstb) as of December 31, 2024.
Savannah Energy stated that the acquisition was funded through a reserve-based lending (RBL) facility of $60 million arranged by Standard Bank of South Africa Limited.
The consideration includes $19.5 million in SIPEC’s available cash and a deferred $2 million payment, to be settled in eight quarterly installments.
The company has outlined an 18-month expansion program to increase Stubb Creek Field’s gross production from an average of 2,700 barrels per day (bpd) in 2024 to approximately 4,700 bpd.
This move is expected to enhance oil and gas output while strengthening Savannah Energy’s presence in Nigeria’s upstream sector.
Expansion Strategy and Market Impact
With 11 million stock tank barrels (MMstb) of 2P gross oil reserves and 515 Bscf of 2C gross gas resources, the Stubb Creek Field represents a strategic asset for Savannah Energy’s growth plans.
The oil produced at the field is processed through on-site facilities and exported via a 25-kilometer pipeline to the Qua Iboe terminal.
The field was recently converted to a 20-year petroleum mining lease (PML) under the Petroleum Industry Act 2021, effective from December 1, 2023, further securing its operational future.
CEO’s Statement and Future Plans
Savannah Energy’s Chief Executive Officer, Andrew Knott, expressed enthusiasm over the completion of the SIPEC acquisition, adding that it aligns with the company’s core business priorities for 2025.
“Our focus now shifts to advancing the Stubb Creek expansion project, which is expected to increase production by nearly 74% over the next two years,” Knott stated. “I look forward to updating shareholders on our progress and on the other strategic priorities outlined for 2025.”
Knott also acknowledged the Nigerian government’s support in facilitating the SIPEC acquisition, reaffirming Savannah Energy’s commitment to further investments in Nigeria’s energy sector.
Implications for Nigeria’s Oil and Gas Sector
Savannah Energy’s growing footprint in Nigeria’s oil and gas industry underscores the sector’s continued attractiveness to international investors, despite ongoing challenges such as infrastructure constraints, regulatory uncertainties, and fluctuating market conditions.
With oil prices remaining volatile and Nigeria aiming to boost domestic gas utilization, the acquisition positions Savannah Energy as a key player in the country’s evolving energy landscape. The company’s expansion at Stubb Creek is expected to support local energy supply, create employment opportunities, and contribute to Nigeria’s economic growth.
As Savannah Energy integrates SIPEC’s assets into its portfolio, industry analysts will be watching closely to assess the impact of the expansion on production targets, revenue growth, and Nigeria’s broader oil and gas development efforts.
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