SAVP.L Share News (SAVP)

(Sharecast News) - Niger and Nigeria-focussed oil and gas company Savannah Petroleum updated the market on amendments to the Seven Energy transaction on Friday, as well as its operations in Niger.The AIM-traded firm confirmed the acquisition of additional 55% interest in Accugas, resulting in the enlarged group owning a 75% interest and further consolidating control over the gas value chain in South East Nigeria.It also announced the signing of a memorandum of understanding, with a vehicle managed by African Infrastructure Investment Managers (AIIM) for the sale of a 25% interest in each of Seven Uquo Gas and Accugas, for consideration of $70m, which the board said broadened the existing partnership with AIIM and provided "significant" additional liquidity to the enlarged group.The acquired assets' net present value, discounted 10% (NPV10) were enlarged by 35%, with the associated forecast cash flows increased by an average of 58% over the 2019 to 2022 period, as reviewed by Savannah's competent person.Term sheets had been agreed with lenders to Accugas, and the holder of the 10.50% notes, in relation to the revised Transaction structure, the board confirmed.Savannah also announced the proposed acquisition of the Creek Town-to-Calabar pipeline, which was expected to grant control of gas delivery from Uquo until transfer point at the Calabar power station.A "significant new customer" was also added to the Alaoji power station, to Accugas.Savannah said an implementation agreement incorporating all of the announced changes was expected to be signed by the end of January, with the wider transaction expected to complete during the first quarter of 2019.Following Friday's announcement, as well as Savannah's announcement on 11 October in relation to the Nigerian Department of Petroleum Resources' completion of due diligence, and its update on 20 September in relation to the Frontier memorandum of understanding and the UERL Minorities buy-out, the board said all commercial terms in relation to the transaction's conditions precedent had now been agreed.Remaining work streams were now mainly legal and procedural in nature, it claimed."We are delighted to announce the amendments to our Seven Energy transaction this morning," said Savannah Petroleum chief executive officer Andrew Knott."In aggregate, they grant control of Accugas to Savannah, are demonstrably net present value and cash flow accretive, release significant cash to the company and significantly increase the upside exposure of our South East Nigerian gas business to rising gas volumes and prices."Knott said the planned addition of the Alaoji power station as a new customer to the Accugas business, alongside other new customer discussions which were ongoing, diversified the firm's near-term customer mix, while also serving as the start of the roadmap the board was seeking to establish to enable a third train to be built at the Accugas central processing facility."I would like to take the time to thank the Seven Energy creditor group, AIIM, and our shareholders for their continued support which has enabled us to progress this transformational acquisition."I would also like to thank both the Savannah and Seven Energy teams for their tireless work this year."We look forward with excitement to 2019 as we seek to consolidate and grow the South East Nigerian gas business and further develop and explore our high-value acreage in Niger."