Savannah Expects Nigeria Deal to Complete 3Q
Tiny AIM-listed Savannah Petroleum said July 3 that its planned acquisition of several assets from indebted Nigerian independent Seven Energy is on course to complete 3Q 2018.
Savannah announced in November 2017 and January 2018 its plans to acquire the mainly upstream gas assets in southeast Nigeria, including an interest in the Accugas midstream business that owns 260 km of pipe network. In return, it is offering cash and Savannah shares to Seven's bondholders.
Savannah also said the Seven assets had produced 18,800 barrels of oil equivalent (gross) during January-May 2018, but that gas production levels dipped in April and May owing to maintenance at the Calabar power plant, which is one of gas marketer Accugas' three principal gas supply customers. It expects gas production to rise to 1Q 2018 levels later this year.
Gas from the Uquo field is sold through Accugas to three principal customers at a total take-or-pay volume of 152mn ft3/d (25,300 boe/d), although gas production in January-May 2018 averaged only 95mn ft3/d. However Savannah said the Seven assets are capable of delivering at least 176mn ft3/d.
Accugas meanwhile plans to add additional customers to the pipeline network, with new industrial customers typically signing up at $3.50/'000 ft3, it said, one-third of the equivalent local price for diesel.