Savannah Petroleum has announced that it has entered into a lock up agreement with, inter alia, Seven, Seven Energy Finance Limited (‘SEFL’), certain other subsidiaries of Seven (together, the ‘Seven Group’) and certain of the creditors of the Seven Group.
The Lock-up Agreement relates to the proposed acquisition by Savannah of certain of the Seven Group’s assets and the associated proposed financial restructuring of the Seven Group. Seven Group holds oil and gas assets in Nigeria.
The Agreed Transaction will involve the acquisition by Savannah of the following Seven Group interests:
- 40 per cent. participating interest in the Uquo oil & gas field;
- 62.5 per cent. interest in Universal Energy Resources Limited (‘UERL’), which holds a 51 per cent. participating interest in the Stubb Creek oil & gas field; and
- An interest in the Accugas midstream business, a c.260km gas pipeline network and associated gas processing infrastructure, potentially in conjunction with certain third-party investors.
The Lock-up Agreement also envisages the following:
- the US$24.1m first bilateral facility agreement to SEFL being exchanged into a US$20m facility to be reinstated at the Accugas level, on a non-recourse basis to the Company;
- US$7.3m in cash and US$4.4m in newly issued Savannah shares being paid to the lender of the second bilateral facility agreement to SEFL as consideration for the release of this loan; and
- the exchange of the Seven Group’s 10.50 per cent. senior secured notes due 2021 into US$15m of notes to be issued at the Accugas level and US$85m of notes to be issued at a Savannah subsidiary company level, both on a non-recourse basis to the Company.
Andrew Knott, CEO of Savannah Petroleum, said:
‘We are pleased to have reached this milestone in the Agreed Transaction with the signature of the Lock-up Agreement, which represents the culmination of many months of hard work by Savannah, Seven, its stakeholders and the respective advisory teams. The work relating to Savannah’s Admission Document remains ongoing and we look forward to providing more detailed updates in the coming weeks.'(Source: Savannah Petroleum)