UK’s Eland seeks £100m to fund Nigeria exploration

18 June 2012, Sweetcrude, LONDON – SCOTLAND is set for its first flotation this year on the Alternative Investment Market (Aim) as an oil and gas group seeks to raise more than £100 million to fund a major acquisition in Nigeria.

Eland Oil & Gas, headquartered in Aberdeen and run by a group of industry veterans, is conducting a roadshow to garner support for the move, which would provide it with funds to complete the purchase of a stake in a licence in the Niger Delta.

Eland’s Oil Mining Lease (OML) 40 licence in Nigeria includes a field which has produced oil in the past, making it an attractive proposition. Infrastructure is already in place, including an export pipeline, and it is believed production could be restarted relatively quickly, generating early cash flow.

The licence is also in an under-exploited block with the potential for significant exploration upside. Last April, Eland and its partner Starcrest Nigeria Energy successfully bid for a 45 per cent stake in the licence following an auction by sellers Shell, Total E&P Nigeria and the Nigerian Agip Oil Company.

On completion of the deal, the stake will be held by a joint venture company owned by Eland and Starcrest, with the Nigerian National Petroleum Corporation owning the remaining interest.

The acquisition price of OML 40 is set at about £100m, and a deposit of about £10m has already been paid.

The final decision on Eland’s flotation will depend on the level of support indicated by investors, but it is understood Eland’s pitch has been well received by institutions.

Canaccord Genuity has been appointed as the nominated adviser to Eland.

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