Upcoming float Seplat Petroleum will become the first Nigerian oil company to have its shares listed in both Lagos and London when it joins the main market later this year with a potential valuation in excess of $2 billion.

The company hopes to raise $500 million to pay down a portion of its 2013 year-end debt of $141 million and fund acquisitions. Seplat produces around 60,000 barrels per day (bopd) of oil from three blocks it operates in the Niger Delta and aims to increase this to 85,000 bopd by 2016.

It bought a 45% stake in the blocks from Royal Dutch Shell (RDSB), Total (FP:PAR) and ENI (ENI:IM) in 2010. French energy firm Maurel & Prom (MAUP:PAR) and Swiss-based trader Mercuria both have minority stakes in the business.

A plan to buy a further block in the Niger Delta from Chevron (CVX:NYSE) is currently threatened by a legal dispute between the US oil giant and Nigeria’s Brittania-U.

The block - OML 53 - holds around 310 million barrels of oil equivalent and sources suggest it could attract a valuation of $600 million. The company’s medium-term strategy is expected to include further deals to acquire assets from oil majors, many of which are exiting the Niger Delta due to the region’s instability.

It is noteworthy that Seplat is pursuing a ‘standard’ listing which has less onerous regulatory requirements than the alternative ‘premium’ listing. This also means it will not be a constituent of the FTSE 250 despite its size.

Issue Date: 11 Mar 2014