REG - Savannah Energy Plc - Completion of the SIPEC Acquisition

Savannah EnergyAnnouncement

10/03/2025 07:15

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RNS Number : 9782Z  Savannah Energy Plc  10 March 2025

10 March 2025

 

Savannah Energy PLC

("Savannah" or "the Company")

 

Completion of the SIPEC Acquisition

 

Savannah Energy PLC, the British independent energy company focused around the
delivery of Projects that Matter, is pleased to announce, further to its
announcement of 19 March 2024, that it has completed its acquisition of
Sinopec International Petroleum Exploration and Production Company Nigeria
Limited ("SIPEC") (the "SIPEC Acquisition"). SIPEC's principal asset is the
49% non-operated interest in the Stubb Creek oil & gas field ("Stubb Creek
Field") which is operated and 51% owned by Universal Energy Resources Limited
(a Savannah affiliate company).

 

 

Highlights of the SIPEC Acquisition

·      Increases Savannah's Reserves and Resources base by approximately
30% from 151 MMboe to 197 MMboe(1);

·      Highly accretive to group net asset value - management estimated
value of SIPEC of US$194 million on a pre-debt basis(2);

·      Material potential production upside - Savannah now intends to
commence an up to 18-month expansion programme which is anticipated to
increase Stubb Creek Field gross production from an average of 2.7 Kbopd in
2024 to approximately 4.7 Kbopd;

·      Adds 227 Bscf of 2C gross gas Resources at Stubb Creek Field,
securing significant additional long-term feedstock gas available for sale to
our Accugas customers(1); and

·      Transaction consideration fully funded through a drawdown under a
US$60 million Reserve-Based Lending debt facility arranged by The Standard
Bank of South Africa Limited. At completion the cumulative consideration paid
was approximately US$35.1 million (inclusive of approximately US$19.5 million
of cash available to SIPEC), with US$2 million in deferred cash consideration
payable in eight quarterly instalments post-completion.

 

About Stubb Creek Field

Stubb Creek Field, located in Akwa Ibom State, Nigeria, is a producing oil
field with considerable undeveloped, non-associated 2C gas Resources. As at
year end 2024, Stubb Creek Field had an estimated 11 MMstb of 2P gross oil
Reserves and 515 Bscf of 2C gross gas Resources(1). Commercial oil production
started at Stubb Creek Field in 2015, with cumulative production of 8.1 MMstb
to 31 December 2024. Oil produced at Stubb Creek Field is processed through
production facilities onsite and then exported to the Qua Iboe terminal via a
25 km pipeline. The Stubb Creek Field was converted to a 20-year petroleum
mining lease, PML20, in accordance with the Petroleum Industry Act 2021 and
effective from 1 December 2023.

Savannah's Stubb Creek Field, Oil Processing Facility, Nigeria

Andrew Knott, Chief Executive Officer of Savannah, said:

"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 further information, please refer to the Company's website
www.savannah-energy.com or contact:

 

Savannah
Energy
                                 +44 (0) 20 3817
9844

Andrew Knott, CEO

Nick Beattie, CFO

Sally Marshak, Head of IR & Communications

 

Strand Hanson Limited (Nominated Adviser)
            +44 (0) 20 7409 3494

James Spinney

Ritchie Balmer

Rob Patrick

 

Cavendish Capital Markets Ltd (Joint Broker)
            +44 (0) 20 7220 0500

Derrick Lee

Tim Redfern

 

Panmure Liberum Limited (Joint
Broker)
+44 (0) 20 3100 2000

Scott Mathieson

James Sinclair-Ford

 

Camarco
                         +44 (0) 20 3757 4983

Billy Clegg

Owen Roberts

Violet Wilson

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR").

 

Dr Christophe Ribeiro, Savannah's VP Technical, has approved the technical
disclosure in relation to Savannah's oil and gas Reserves and Resources in
this regulatory announcement in his capacity as a qualified person under the
AIM Rules. Dr Ribeiro is a qualified petroleum engineer with over 20 years'
experience in the oil and gas industry. He holds an MSc in Geophysics from the
Institut de Physique du Globe de Paris and an MSc in Petroleum Engineering and
a PhD in Reservoir Geophysics from Heriot-Watt University. Dr Ribeiro is a
member of the European Association of Geoscientists and Engineers (EAGE) and
Society of Petroleum Engineers (SPE).

 

About Savannah:

Savannah Energy PLC is a British independent energy company focused around the
delivery of Projects that Matter in Africa.

 

Footnotes

(1.) A Competent Person's Report ("CPR") for the Nigeria Assets was compiled
by CGG Services (UK) Ltd ("CGG") which certified 2P reserves and 2C resources
as at 1 January 2024. The Reserves above have been adjusted for produced
volumes to year-end 2024.

(2.)  Please note that these are internal management estimates only which
have not been audited. Whilst they have been prepared using reasonable care,
they remain subject to change at any time.

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