Yemie ADEOYE

LAGOS-BARELY two weeks after President Muhammadu Buhari assented to the deep offshore and inland basin bill, The country has recorded another economic booster in the upstream sub-sector of the oil and gas industry, as Savannah Petroleum PLC, a British independent oil & gas company with activities around Niger republic and Nigeria, has announced the completion of the Seven Energy transaction, thereby  becoming a full-cycle Exploration & Production company following the transformational acquisition.

The success of this move is expected to further boost Nigeria’s oil production output as Savannah Petroleum aims to bring its global experience in oil and gas administration to bear thereby increasing the current acquired oil and gas portfolios in Nigeria to very competitive heights.

At a court hearing on 13 November, administrators were appointed to Seven Energy International Limited and yesterday effected the transfer of all Seven Energy Assets to group of companies controlled by Savannah and AIIM.

Crude Oil

Following this step, final long-form documentation with respect to the Transaction was executed in accordance with the agreed steps as set out in the Implementation Agreement, and the Transaction has now been completed.

This was contained in a statement endorsed by the Chief Executive Officer Andrew Knott, the CFO
Isatou Semega-Janneh, and Jessica Ross, Vice president  Corporate Affairs of the organisation.

Following the completion of this transaction, Savannah now owns the Seven Assets, which comprise:

An 80% interest in Seven Uquo Gas Limited (“SUGL”) which in turn holds a 40% participating interest in the Uquo field located in South East Nigeria (with SUGL assuming responsibility for all operations of the gas project at the Uquo field following the occurrence of the Frontier Transaction);

A 51% interest in the Stubb Creek field located in South East Nigeria (through 100% ownership of Universal Energy Resources Limited); and

An 80% interest in the Accugas midstream business, comprising the 200 mmscfd Uquo gas processing facility, a c.260km pipeline network and long-term gas sales agreements with downstream customers.

One of Savannah’s partners in the transaction is African Infrastructure Investment Managers (“AIIM”) who, as part of the Transaction completion, acquired 20% interests in SUGL and Accugas in return for cash consideration to Savannah of US$54m which has now been received.

The completion of this transaction gives Savannah: A material producing asset base which is expected to generate significant asset-level free cash flows, complementing the Company’s prolific  exploration and development assets;

Exposure to significant upside potential, through both volume and margin uplift, via the utilisation of additional capacity within Accugas’ infrastructure; and

A strong platform in the well-established and high potential Nigerian oil and gas industry. Issue of new Ordinary Shares, Admission to Trading and Total Voting Rights. As previously anticipated, 116,638,985 new Ordinary Shares have been issued in aggregate as part of the Transaction completion process (the “Consideration Shares”).

Application for the admission to trading on AIM of 90,666,308 consideration shares has been made and is expected to become effective at 8.00 a.m. on 18 November 2019. Application for admission to trading on AIM will be made for the 25,972,677 remaining consideration shares and it is expected that such admission will take effect at 8.00 a.m. on or around 21 November 2019.

Following the issue of the Consideration Shares, the Company will have 996,408,412 Ordinary Shares in issue and there are no shares held in Treasury. This will be the total number of voting rights in the Company and may be used by Shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA’s Disclosure Rules and the Transparency Rules.

Immediately after the completion of the Transaction, the Company is required to publish a Supplemental Admission Document, which is progressing well and is intended to be published in the coming months.

CEO of Savannah Petroleum, Andrew Knott, stated expressed his satisfaction over the development.  “We are very pleased to have completed the Seven Energy Transaction. The deal transforms Savannah into a full-cycle E&P company in West Africa and marks the start of a very exciting time for us. We have acquired a business with great people and a strong set of exploration, appraisal, development and production assets which are expected to be highly cash flow generative for the Company.

I would like to thank all of our staff, advisers and stakeholders for their hard work and cooperation throughout the transaction. I am very excited for the future of our business and the growth potential it contains, and I look forward to updating shareholders on company developments going forward.”

The Chairman of Savannah Petroleum, Steve Jenkins, also said: “Today marks a significant milestone in Savannah’s corporate history and elevates the Company to being a leading oil and gas producer in the London market. We can now focus on further developing the high quality, world class assets that we have in our portfolio, which we believe this has the potential to deliver material long-term returns for our stakeholders.

In Nigeria, our focus is on delivering further growth in the Company’s revenue base, and as we continue to develop in country we see strong potential for additional resource growth over time. In Niger, we look forward to recommencing activity in 2020, with expected delivery of first oil from R3 East and a multi- well exploration drilling campaign. Given the recently signed Niger-Benin export pipeline Transportation Convention, we believe this is a very exciting time for Niger’s oil and gas industry and we look forward to updating our investors on our plans in country in due course.

I would like to echo Andrew’s statement in thanking all of our stakeholders for their hard work and support in completing this transaction.”

The Seven Energy Transaction refers to the acquisition by Savannah of the Seven Assets and the restructuring of Seven Energy’s existing indebtedness, as more fully described in the Company’s admission document dated 22 December 2017 and per the Company’s RNS announcements dated 20 September 2018 (specifically relating to the Frontier Transaction and the buy-out of minority shareholders in Universal Energy Resources Limited) and 21 December 2018 (specifically relating to the acquisition of an additional 60% interest in Accugas as well as the sale of a 20% interest in SUGL and Accugas to AIIM). Unless otherwise defined, capitalised terms in this announcement are per the above admission document and RNS announcements. the statement reads in part.