Petroleum Africa
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Thursday, November 16, 2017
Savannah Petroleum entered into a lock up agreement with, inter alia, Seven, Seven Energy Finance Ltd. (SEFL), certain other subsidiaries of Seven, 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.
The agreed transaction will involve the acquisition by Savannah of the following Seven Group interest including a 40% participating interest in the Uquo oil & gas field; a 62.5% interest in Universal Energy Resources Ltd. (UERL), which holds a 51% participating interest in the Stubb Creek oil & gas field.
It also includes an interest in the Accugas midstream business, with around a 260-km gas pipeline network and associated gas processing infrastructure, potentially in conjunction with certain third-party investors.
The Lock-up Agreement also envisages the following of the $24.1 million first bilateral facility agreement to SEFL being exchanged into a $20 million facility to be reinstated at the Accugas level, on a non-recourse basis to the company; $7.3 million in cash and $4.4 million 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% senior secured notes due 2021 into $15 million of notes to be issued at the Accugas level and $85 million of notes to be issued at a Savannah subsidiary company level, both on a non-recourse basis to the company.
“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,” Savannah’s Chief Executive Andrew Knott said.
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