Seplat Petroleum Development Company Plc has acquired Eland Oil & Gas Plc for a cash value of £382 million.
Seplat, in a statement, noted that the boards of Seplat and Eland 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, which will be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
The acquisition values the entire issued and to be issued ordinary share capital of Eland at approximately £382 million on a fully diluted basis, Seplat stated, adding that under the terms of the acquisition, each Eland shareholder will be entitled to receive for each Eland share 166 pence in cash.
The transaction will be finally sealed after the Scheme at the Court Meeting; and the Resolution at the General Meeting, which the Eland the Seplat Directors unanimously intend to recommend that their shareholders vote in favour of.
The directors of both companies have received irrevocable undertakings from their independent financial advisers – Evercore for Eland and Helios Natural Resources Limited, Lombard Odier Asset Management (Europe) Limited and Richard I Griffiths for Seplat.
When the shareholders vote in favour of the transaction, Seplat will acquire 129,118,048 Eland shares, representing approximately 59.89 per cent of the existing issued ordinary share capital of Eland.
Commenting on the Acquisition, George Maxwell, CEO of Eland, said: “This recommended offer from Seplat represents the culmination of a very successful journey by Eland, the management team and all of its stakeholders.
“Since founding Eland, we have, jointly with our partners in Elcrest, acquired our interests in OML 40, a non-producing asset, achieved an all-time record production on this asset and become a significant independent producer in Nigeria’s E&P landscape and one of the biggest oil producers on London’s AIM market. Eland has, in a period which has seen a significant cyclical downturn in our industry, outperformed most of its peers and the AIM Oil & Gas Index.
“This transaction represents a record share price for Eland and crystallises Eland’s stated goal to maximise shareholder value.”
Chairman of Eland, Russell Harvey, said: “We are pleased to announce this recommended Acquisition by Seplat. Eland’s management team has done an excellent job executing our strategy.
“We have demonstrated a strong track record of operational delivery and value creation in Nigeria from our high-quality assets. This offer allows Eland Shareholders to benefit from an accelerated and enhanced realisation of this value through a cash offer at a significant premium to the current market value. In addition, the business will benefit from the opportunity to become part of a more significant player in the Nigerian oil and gas market. For these reasons, the Eland Board unanimously intends to recommend the offer to Eland Shareholders.”
Commenting on the acquisition, Chairman of Seplat, Dr. Bryant Orjiako, said: “Since Seplat acquired its first blocks and commenced production in 2010, we have increased oil and gas production and grown reserves in each year of operation, delivering significant growth and value for our shareholders. We firmly believe that Eland is a complementary fit with Seplat and that there will be enhanced scale and a wider range of capabilities made available to the enlarged group through the combination. This acquisition signals the next step in our journey that will underpin Seplat’s ambition to be the leading independent E&P in Nigeria.”
CEO of Seplat, Austin Avuru, said: “We are pleased to have reached an agreement to acquire Eland and its portfolio of assets that will enhance our existing operations. 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.
”The Acquisition, made possible by our robust operational platform and headroom in our capital structure, 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.
“The acquisition reinforces Seplat’s status as one of Nigeria’s leading indigenous, independent E&Ps and will create a Nigerian E&P champion with the footprint and technical capabilities to further grow and consolidate in Nigeria.”
Seplat is a leading independent oil and natural gas producer in the Niger Delta area, and a leading supplier of processed natural gas to the domestic market, fully listed on both the Nigerian Stock Exchange and the London Stock Exchange since April 2014.
Seplat is focused on maximising hydrocarbon production and recovery from existing production and development assets, realising the upside potential within the portfolio through focused appraisal and exploration activities and farm-in into new opportunities in Nigeria.
Eland is an independent oil and gas company focused on production, development and exploration in West Africa, particularly the Niger Delta region. Eland was founded in 2009 with a strategy to deliver exceptional shareholder returns through a combination of development, production growth and exploration success.
In 2012 Eland, through its joint venture company, Elcrest, purchased a 45 per cent interest in oil mining lease (OML) 40 and in 2014 acquired a 40 per cent stake in a second licence, Ubima, a marginal field located in OML 17.
Led by its experienced senior management and operating team, the Eland Group took gross production on OML 40 from 3,338 barrels of oil per day (bopd) in 2014 to a peak production of over 31,000bopd in 2018, an increase of over 800 per cent. Eland’s headquarters are in Aberdeen, with additional offices in London, Lagos, Benin City and Abuja.