Savannah Energy Expands Nigerian Operations with SIPEC Acquisition

Savannah Energy Plc, a British independent energy company, has completed the 100% acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited (SIPEC). This strategic move significantly strengthens Savannah’s footprint in Nigeria’s oil and gas sector, expanding its reserves, production capacity, and long-term gas resources.

Strengthening Reserves and Gas Supply

With this acquisition, Savannah Energy’s reserves and resource base have increased by approximately 30%, rising from 151 million barrels of oil equivalent (mmboe) to 197 mmboe. Additionally, it secures 227 billion standard cubic feet (Bscf) of “2C” gross gas resources at Stubb Creek Field, further bolstering its capacity to supply Accugas customers—one of Nigeria’s key gas distribution networks.

SIPEC’s principal asset is its 49% non-operated interest in the Stubb Creek oil and gas field, located in Akwa Ibom State, Nigeria. The field is operated and 51% owned by Universal Energy Resources Limited, a Savannah affiliate.

Financing and Transaction Details

Savannah Energy financed the acquisition through a $60 million Reserve-Based Lending (RBL) facility arranged by The Standard Bank of South Africa Limited.

• Total consideration paid: Approximately $35.1 million, including:
  • $19.5 million in SIPEC’s available cash
  • $2 million in deferred payments, payable in eight quarterly installments post-completion

Planned Expansion and Production Growth

Following the acquisition, Savannah Energy announced an 18-month expansion program aimed at increasing gross production at Stubb Creek Field from 2,700 barrels per day (kbdopd) in 2024 to approximately 4,700 kbdopd.

• The Stubb Creek Field holds an estimated 11 million stock tank barrels (MMstb) of 2P gross oil reserves and 515 Bscf of 2C gross gas resources as of year-end 2024.
• Oil production at the field began in 2015, with cumulative output reaching 8.1 MMstb by December 2024.
• Crude oil is processed onsite and transported via a 25 km pipeline to the Qua Iboe terminal for export.

The field was converted to a 20-year petroleum mining lease (PML) under Nigeria’s Petroleum Industry Act (PIA) 2021, effective December 1, 2023, reinforcing Savannah’s long-term commitment to the Nigerian market.

Strategic Impact and Future Outlook

Andrew Knott, CEO of Savannah Energy, described the acquisition as a key milestone in the company’s 2025 business strategy.

“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,” Knott stated.

This move aligns with Savannah’s broader expansion goals, enhancing its production scale, operational efficiency, and access to critical gas resources. As Nigeria continues to focus on energy security and industrial gas supply, this acquisition positions Savannah as a key player in the country’s energy landscape.