Savannah Energy PLC said it has signed a Share Purchase Agreement (SPA) with ExxonMobil Corporation, ExxonMobil International Holdings, Inc. and Esso Exploration Holdings, Inc., and has also separately signed an SPA with Petronas E&P Overseas Ventures SDN. BHD.
The agreement relates to the purchase of each of their entire upstream and midstream asset portfolios in Chad and Cameroon respectively. The SPAs both have an economic effective date of 1 January 2021.
This follows Savannah’s initial announcement on 2 June 2021 regarding the proposed transaction with Exxon, and Savannah’s earlier announcements today regarding the Exxon acquisition and the Petronas acquisition.
Completion of both the Exxon acquisition and the Petronas acquisition would result in the Savannah Energy acquiring a 75 per cent controlling interest in the Doba Oil Project and an effective 70 per cent indirect controlling interest in the Chad-Cameroon export transportation system.
The remaining 25 per cent interest in the Doba Oil Project is held by the national oil company of Chad, SHT Petroleum Chad Company Limited (SHT). The remaining 30 per cent interest in the Chad-Cameroon export transportation system is held indirectly by affiliates of SHT together with the Republic of Chad and the national oil company of Cameroon, Société Nationale Des Hydrocarbures.
For reference, in 2020 the Doba Oil Project produced an average gross 33.7 thousand barrels of oil per day (Kbopd) and the Chad-Cameroon pipeline transported a gross 129.2 Kbopd. Due to their size and nature, both the Exxon acquisition and the PETRONAS acquisition individually constitute reverse takeover transactions pursuant to AIM Rule 14 and, accordingly will be subject to, inter alia, shareholder approval.
The Company intends to publish the associated AIM Admission Document, which will contain a notice of general meeting, on or around 17 December 2021, following which point the Company would seek restoration to trading on AIM of its ordinary shares.
Chief Executive Officer, Savannah Energy PLC, Andrew Knott, said: “I am delighted that we are announcing this afternoon the signature of SPAs to acquire control of the upstream and midstream assets of Exxon and Petronas in Chad and Cameroon.
“These assets have generated billions of dollars of critical tax revenues for their host countries and free cashflow to their owners since the onset of first oil production in 2003. Further, under our stewardship, we expect these assets in aggregate to generate positive free cash flow and fiscal revenues for Chad and Cameroon for a further twenty-five plus years.
“For Savannah, these deals are expected to see our production levels and reserve base more than double. Further, we see strong potential to significantly increase upstream production and midstream throughput volumes from current levels through incremental investments and look forward to providing more information around our forward plans for the assets, and their potential, upon publication of our AIM Admission Document and the Company’s restoration to trading on AIM on or around December 17.
“I would also like to this opportunity to welcome the incoming employees to Savannah and acknowledge with gratitude the support we have received from our stakeholders in government. Lastly, I would thank the ExxonMobil, PETRONAS and Savannah deal and advisory teams for the hard work that has been undertaken to get to this point.”
Savannah Energy PLC is an AIM listed British independent energy company. In Nigeria, the Company has controlling interests in Uquo and Stubb Creek oil and gas fields, and the Accugas midstream business in South East Nigeria, which provides gas enabling over 10 per cent of Nigeria’s thermal power generation. In Niger, the Company has licence interests covering approximately 50 per cent of the Agadem Rift Basin of South East Niger, where the Company has made five oil discoveries and seismically identified a large exploration prospect inventory consisting of 146 exploration targets to be considered for potential future drilling activity.