Eland plans to fund Nigeria stake with first Scots AIM float of 2012

Scotland’s first Alternative Investment Market (Aim) flotation of the year is to take place next week as an Aberdeen oil and gas group prepares to raise funds for a major acquisition.

Shares in Eland Oil & Gas are due to begin trading on Aim next Monday and the group plans to use the £118 million proceeds to buy a stake in an onshore mining lease in Nigeria.

Eland began operations in May 2010 with the aim of identifying and acquiring interests in oil and gas assets in west Africa. Last April, the firm and its partner, Starcrest Nigeria Energy, successfully bid for a 45 per cent stake in the Oil Mining Lease (OML) 40 licence following an auction by the Nigerian Agip Oil Company, Shell and Total E&P Nigeria.

Canaccord Genuity has been appointed as the nominated adviser and broker. The shares are to debut at 100p.

The move, first revealed by Scotland on Sunday in June, would see Eland valued at about £135m.

City financier Richard Griffiths, who founded investment bank Evolution in 2000 before setting up boutique investment firm ORA Capital Partners in 2005, will have a 10.1 per cent stake in Eland after its flotation, valuing his holding at around £13.6m.

Eland’s chief executive is Les Blair, a University of Aberdeen graduate who previously worked for Addax Petroleum in Nigeria. He has also held a variety of executive positions during his 35-year career in the industry.

Chief financial officer George Maxwell, a graduate of Robert Gordon University in Aberdeen, was previously business development manager for Addax. Chairman Harry Wilson, is a former chief executive of Aim-quoted Sterling Energy.

The flotation will be a welcome boost for corporate Scotland, which has lost a number of quoted companies in recent years. Cashmere company Dawson International went into administration earlier this month, while Edinburgh oil and gas firm Melrose Resources is set to give up its listing in October as part of its merger with Ireland’s Petroceltic.

Dundee-based dental device maker 3D Diagnostic Imaging has unveiled plans to ditch its Aim listing as part of a cost-cutting exercise, and Robert Wiseman Dairies left the main market in January after its takeover by German yoghurt giant Müller.

There have not been any Scottish Aim flotations so far this year, but the last two firms to join – Edinburgh internet dating company Cupid and Glasgow gas monitoring technology group Smart Metering Systems – have seen significant rises in their market value.

Last month, fellow oil firm Caithness Petroleum appeared to take a step closer to resurrecting its float plans by boosting the liquidity of its shares.

The London-based firm – which operates in the Moray Firth, Morocco and Texas – gave shareholders ten new shares for each one they held, a move seen as enhancing its position ahead of an initial public offering, which could come before the end of the year.

Caithness had considered a flotation last year to raise funds for a drilling programme in Morocco, but it is understood the plans were put on hold because of the Arab Spring.

l Drug company Clinigen yesterday confirmed it is seeking an Aim flotation after seeing its revenues more than double to £82.1m in the year to June.

Peter Allen, chairman of Galashiels-based ProStrakan, is to replace founder Andrew Leaver as the chairman of the Burton-on-Trent firm, which makes drugs for clinical trials.