LONDON--Nigeria-focused oil producer Afren PLC said Monday it has received a "highly preliminary" approach from Nigerian peer Seplat Petroleum Development Company PLC in the latest sign that deal activity is heating up among oil exploration companies.

Shares in Afren surged 14% after the news, though that only partially makes up for a near-70% slump in the company's value this year to around $900 million. Afren's board fired its chief executive and chief operating officer in October following a scandal involving unauthorized payments made to the pair that were connected to some of the company's key Nigerian assets.

The sharp slide in oil prices since the summer has also hit Afren hard, along with other U.K.-listed exploration and production companies. That has led to speculation some of these typically small to midsize companies could be snapped up by cash-rich rivals.

Seplat, which raised $500 million in an initial public offering in London and Lagos in April, has already been rumored as a potential buyer for Afren. It currently produces around 60,000 barrels a day from three oil blocks it bought from Royal Dutch Shell PLC in 2010, while Afren expects to produce 32,000 to 36,000 barrels a day this year from the Ebok, Okoro and Setu fields offshore Nigeria, as well as the Ogini and Isoko fields onshore.

Afren also has exploration licenses elsewhere in Africa, including in Ghana, Kenya and Tanzania, as well as stakes in two projects in the Kurdish region in northern Iraq.

Afren was the subject of bid speculation earlier this year after privately-held Nigerian firm South Atlantic Petroleum built up a stake of around 7% in the company.

Afren said there was no certainty that an offer from Seplat would be made. Seplat has until Jan. 19 to make a firm offer or withdraw.

Write to Selina Williams at selina.williams@wsj.com and Ian Walker at ian.walker@wsj.com

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