North-east oil explorer Eland Oil and Gas made its debut on the stock market yesterday, with first day trading valuing it at about £135million.
The Westhill-based firm said its flotation on the Alternative Investment Market (Aim) to raise £118million was the largest initial public offering (IPO) on the exchange for three years.
Trading got off to a strong start and the shares closed at 108.5p, having been placed at £1.
Eland joined the Stock Exchange to raise funds for an acquisition in Nigeria.
It has bought a stake in an oil block in the Niger Delta alongside joint-venture partner Starcrest for £97million. The pair have formed Elcrest, which now has a 45% share in the oil mining lease (OML) 40 licence following an auction by Shell, Total and Agip. The Nigerian National Petroleum Company owns the remaining interest.
OML 40 has produced oil in the past and infrastructure including an export pipeline is already in place, meaning operations can be restarted quickly. Eland said it hoped output there would be 2,500 barrels of oil per day (bpd) within six months and 50,000bpd within four years.
Chief executive Les Blair said: “I look forward to updating shareholders and the market as we progress our work programme, which is designed to rapidly monetise this asset for the benefit of both our shareholders, the communities within the licence area and all other stakeholders.”
David Barclay, divisional director for investment manager and financial-planning specialist Brewin Dolphin in Aberdeen, said Eland had enjoyed a strong debut, adding: “Over 7million shares were traded . . . which is significant for a company with a market capitalisation of around £135million. To give some context, sector heavyweight BP traded 13million shares on the day.”