Seplat Petroleum Development Plc has sealed a cash deal to acquire fellow London-listed independent exploration company Eland Oil & Gas for $484 million, on Tuesday.
According to a statement signed by Seplat’s Company Secretary, Edith Onwuchekwa and issued to the Nigerian Stock Exchange (NSE), the development follows the finalisation of acquisition agreements between the boards of both companies.
“Seplat Petroleum Development Company Plc (“Seplat” or the “Company”), a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, today notifies that the Boards of Seplat and Eland are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat,” Seplat’s statement said on Tuesday.
The indigenous Nigerian player is set to gain Eland’s 45percent operating stake in licence OML 40 in the Niger Delta where the latter recently delivered first oil from an early production facility at the Gbetiokun field and is also producing from the Opuama field.
Eland also has had plans to drill an exploration well at the Amobe prospect in the licence later this year, as well as an appraisal at the Abiala discovery.
In addition, Eland holds a 40percenty interest in the Ubima licence that is now estimated to hold 9.3 million barrels of proven and probable reserves after a resource upgrade earlier this year.
“Eland is an excellent fit with Seplat and the combination should achieve for us, growth and increased profitability, creating value for our shareholders, employees and other stakeholders while offering an attractive upfront premium to Eland shareholders,” Seplat CEO Austin Avuru said.
He said “the acquisition… is in line with a key part of our established strategy which is to pursue opportunities in the onshore and offshore areas of Nigeria that offer near-term production with cash flow and reserves potential”.
He added it will “create a Nigerian E&P champion with the footprint and technical capabilities to further grow and consolidate in Nigeria”.
Eland chief executive George Maxwell said: “This transaction represents a record share price for Eland and crystallises Eland’s stated goal to maximise shareholder value.”
