Africa‑focused British company Savannah Energy is set to acquire Exxon Mobil’s and Petronas’ entire upstream and midstream asset portfolios in Chad and Cameroon for a total of $626m.
The company has signed share purchase agreements (SPA) with Exxon and Petronas (E&P) overseas ventures to acquire the assets.
The move will further expand Savannah Energy’s operations in Africa. It plans to fund the transactions through a combination of debt and equity/equity-linked financing.
The two deals will provide Savannah with a 75% controlling interest in the Doba oil project, as well as an approximately 70% indirect controlling interest in the Chad-Cameroon export transportation system.
Last year, the Doba Oil Project produced an average of 33,700 barrels per day (bbl/d) of oil. The Chad-Cameroon pipeline system transported a gross of 129,200bbl/d of oil in 2020.
The SHT Petroleum Chad company will hold the remaining 25% interest in the Doba oil project, while its affiliates will indirectly own the remaining stake in the transportation system.
The Exxon transaction has a value of $360m, while the deal with Petronas is worth approximately $266m.
The transactions are subject to shareholder approval.
Savannah Energy CEO Andrew Knott said: “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 cashflow and fiscal revenues for Chad and Cameroon for a further 25+ years.
“For Savannah, these deals are expected to see our production levels and reserve base more than double.”