Seplat Petroleum Development agreed to buy Eland Oil & Gas, adding resources in Nigeria as it seeks to become the country’s biggest independent exploration and production company.
The acquisition of Eland, whose main asset is the OML 40 license in the Niger Delta, is set to boost Seplat’s production to 64,000 barrels of oil equivalent a day, a jump of as much as 30% from 2019 guidance. While it’ll still trailing top domestic rival Aiteo Eastern E&P Co., the deal highlights how the retreat of some oil majors in recent years is allowing independent players to grow.
Seplat will pay 166 pence a share for Eland in a purchase valuing the London-traded company at about 382 million pounds ($484 million), it said in a statement on Tuesday. Eland’s directors will recommend that shareholders vote in favor of the deal, which represents a premium of 33% to the six-month average share price, it said.
Eland shares surged as much as 28%, a record gain, and traded at 164.8 pence of 9:05 a.m. London time. Seplat didn’t trade.
Nigeria’s independent producers have grown after snapping up oil leases from large international companies such as Royal Dutch Shell Plc when attacks and sabotage forced the majors to scale back some operations. Aiteo, Seplat and other so-called E&Ps have helped drive output growth in the West African country, pushing production above limits imposed by the OPEC+ alliance.