Seplat To Buy Eland, Targets Lead Among Nigeria E&Ps

Seplat Petroleum Development Company seeks to become the country’s biggest independent exploration and Production Company as it agreed to buy Eland Oil & Gas Plc.

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 per cent from 2019 guidance.

Even though Seplat 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 per cent to the six-month average share price, it said.

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.