Savannah has announced that, it is in advanced exclusive discussions with ExxonMobil Corporation with respect to the proposed acquisition of its entire upstream and midstream asset portfolio in Chad and Cameroon. The RNS came out after the blog was published and to be honest doesn’t give much detail save that Andrew Knott’s ambitions remain undiminished.
The Proposed Acquisition would include a 40% operated interest in the Doba Oil Project, and an effective c. 40% interest in the Chad-Cameroon oil transportation pipeline. For reference, in 2020 the Doba Oil Project produced an average gross 33.7 Kbopd and the Chad-Cameroon pipeline transported a gross 129.2 Kbopd.
If completed on the currently proposed terms, the Proposed Acquisition would be classified as a reverse takeover transaction in accordance with the AIM Rule 14, and accordingly, the Company has requested that its ordinary shares be suspended from trading on AIM with immediate effect and will remain so pending publication of an AIM admission document setting out, inter alia, details of the Proposed Acquisition, or confirmation is provided that discussions around the Proposed Acquisition have been terminated.
Clearly market expectations will partly revolve around how long the suspension will last and how the deal will be financed, not as long as the Seven Energy deal and doing a deal with Exxon should be a good deal easier and swifter. At first glance I would initially suggest it will be something that if Andrew Knott thinks is doable shareholders should at least for now give him the benefit of the doubt to execute.
There can be no assurance that agreement between the parties will be reached on mutually acceptable terms and that the Proposed Acquisition will complete. The Company will update shareholders as to progress made in relation to the Proposed Acquisition as appropriate.