Independent Nigerian oil and gas producer Seplat Petroleum has signed an agreement to acquire Aberdeenshire-based Eland Oil and Gas for more than £380m ($478.1m).

Under the terms of the deal, each of the Eland shareholders will receive 166 pence in cash from Seplat for each share held.

Founded in 2009, Eland is an independent oil and gas company focused on production, development and exploration in West Africa, mainly in the Niger Delta region of Nigeria.

Eland owns a stake in OML 40 license in the Niger Delta

The acquisition of Eland, which owns a 45% stake in OML 40 license in the Niger Delta and a 40% stake in the Ubima field, is expected to increase Seplat’s production capacity to 64,000 barrels of oil equivalent a day.

Additionally, the acquisition is expected to boost Seplat’s 2P liquid reserves by 41 million barrels, while 2P and 2C reserves will increase by 65 million barrels to 330 million barrels.

Eland chairman Russell Harvey said: “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.”

With the deal, Eland expects to benefit from the opportunity to become part of more significant player in the oil and gas market in Nigeria.

Seplat chairman Dr Bryant Orjiako said: “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.”

The transaction is scheduled to be closed in late 2019.

Seplat CEO Austin Avuru said: “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.”

Last year, Nigerian National Petroleum Corporation (NNPC) has signed five agreements with Seplat Petroleum Development Company (SPDC) to accelerate the development of the Assa North and Ohaji South (ANOH) gas field in Nigeria.