The board of Eland Oil and Gas has recommended that shareholders accept the offer of 166p per share - 28.5% above yesterday’s closing price of 129.2p.

Shareholders will also be entitled to the interim dividend of 1p and 32.6% over the three-month weighted average price.

Eland Oil and Gas issued a statement which said: “The Eland directors, who have been so advised by Evercore as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Eland Directors, Evercore has taken into account the commercial assessments of the Eland directors.”

Seplat Petroleum is an independent oil and gas producer located in the Niger Delta area and a supplier of natural gas to the domestic market. The firm is listed on the Nigerian and London Stock Exchanges.

George Maxwell, chief executive, 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.”

Chairman Russell Harvey added: “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.”

Austin Avuru, CEO of Seplat, 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 our growth and increased profitability, creating value for our shareholders, employees and other stakeholders while offering an attractive upfront premium to Eland Shareholders.”