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Savannah Petroleum plans to raise US$250mln, shares to resume trading soon

"This transaction is extremely exciting for Savannah and our stakeholders,” said chief executive Andrew Knott said in a statement.
oil and gas operations
New shares will be sold to institutional investors

Savannah Petroleum PLC (LON:SAVP) has updated investors on its proposed acquisition in Nigeria, and gave details of a share placing that’s intended to fund the deal.

It is to issue up to US$250mln of new equity to institutional investors.

As well as supporting the Nigeria transaction, the injection of funds will also help pay for a planned drilling campaign in Niger.

The company in a statement also guided that it expects trading in the group’s shares to resume before the end of this year, with the placing slated to close in January.

"This transaction is extremely exciting for Savannah and our stakeholders,” said chief executive Andrew Knott said in a statement.

“The deal is expected to transform Savannah into a cash generative business expected capable of financing both our upcoming drilling activities in Niger and Nigeria and the introduction of a dividend.

“Further, Savannah is acquiring significant Nigerian operational capabilities and experience which we expect to provide a strong platform for further value accretive in-country growth.”

Savannah is also expanding its boardroom along with the transaction.

Isatou Semega-Janneh will become the chief financial officer, Sir Stephen O'Brien will be vice chairman and non-executive director whereas David Clarkson and Michael Wachtel will also be appointed as non-executive directors.

The acquisition sees Savannah taking a 40% stake in the Uquo oil and gas field, a 62.5% in vehicle that in turns owns 51% of the Stubb Creek oil & gas field and will also take on an interest in a midstream operation, called Accugas Limited, which has a gas pipeline network and processing facilities.

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