Savannah Energy PLC on Monday said it has completed the acquisition of Sinopec International Petroleum Exploration and Production Co Nigeria Ltd, or Sipec.

The energy company focused on projects in Africa said Sipec’s main asset was the 49% non-operated interest in the Stubb Creek oil and gas field in Nigeria, which is operated and 51% owned by Savannah-affiliate Universal Energy Resources Ltd.

Savannah paid $35.1 million for Sipec at completion, including $19.5 million in cash, with $2 million in deferred cash payable in eight installments following completion.

The company said the deal increases its reserves and resources base by 30% to 197 million barrels of oil equivalent from 151 million boe.

It said the deal is ‘highly accretive’ to net asset value, with an estimated value of $194 million on a pre-debt basis.

There is ‘material potential production upside’, as Savannah intends to start an 18-month expansion programme to increase Stubb Creek Field gross production by 74% to 4,700 barrels of oil per day from 2,700 barrels of oil per day.

Savannah said the transaction was fully funded through a drawdown under a $60 million reserve-based lending debt facility.

Chief Executive Officer Andrew Knott 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.’

Shares in Savannah Energy were down 7.8% to 9.50 pence in London on Monday afternoon.

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