UK player Savannah Petroleum is aiming for a $140 million acquisition of assets of Nigeria-focused Seven Energy International after the pair signed a lock-up agreement following earlier plans for a reverse takeover.

London-listed Savannah anticipates that the deal, if it comes to fruition, will set it back $87.5 million in cash and $52.5 million in shares, with possible new share issues also in the offing.

The two companies entered into a binding exclusivity agreement on 8 June to discuss Savannah acquiring certain of Seven’s oil and gas assets, mainly located in Nigeria’s prolific Niger Delta, including stakes in the Uquo and Stubb Creek oil and gas fields.

Wednesday’s announced lock-up agreement takes this process further, with Savannah in line to take a 40% stake in the Uquo field, a 62.5% stake in Universal Energy Resources (which itself holds a 51% interest in the Stubb Creek field), and an unspecified share in the Accugas midstream business (which is a 260-kilometre gas pipeline and associated infrastructure).

Implementation of the agreement is expected to take four to five months.

The deal does not, however, include Seven Exploration & Production.