Oando pays $1.5b for ConocoPhillips’ assets
Oando Energy Resources Incorporated (OER), the exploration and production arm of Oando Plc, yesterday paid $1.5 billion for the acquisition of the divested ConocoPhillips’ upstream’s oil and gas assets in Nigeria.
The completion of the landmark transaction, acording to the firm, brings to a close the deal, which has been on the table since 2012, when ConocoPhillips’ announced it decision to pull out of its upstream operations in Nigeria.
With the conclusion of the deal, Oando becomes the owner of ConocoPhillips’ 20 per cent non-operating interests in onshore assets, including oil blocks in oil mining leases (OMLs) 60, 61, 62, and 63.
Its ownership also extends to related infrastructure and facilities in the Joint Venture in which Nigerian Agip Oil Company Limited, holds 20 per cent and the Nigerian National Petroleum Corporation 60 per cent.
The related infrastructure and facilities include 40 discovered oil and gas fields, of which 24 are currently producing, 12 production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, and the Kwale-Okpai 480 Mw combined cycle gas-fired independent power plant.
Also, ConocoPhillips’ 95 per cent operating interest in OML 131 and 20 per cent non-operating interest in oil prospecting licence (OPL) 214, converted to OML 145 last month, will be fully transferred to Oando.
Other companies in the Joint Venture asset (OML 145) include ExxonMobil (20 per cent and operator), Chevron (20 per cent), Svenska (20 per cent), Nigerian Petroleum Development Company (15 per cent) and Sasol (5 per cent).
Oando also said that through this transaction, OER will indirectly own all of the issued share capital of ConocoPhillips in Nigeria effective January 1, 2012, which translates to the date of the transaction.
Oando said the total reserves and associated resources in the deal, including proved, plus probable reserves, amount to about of 211.6 million barrels of oil equivalent (MMboe), adding that the transaction represents a significant opportunity for OER to create scale and significant value for its shareholders.
It noted that OER’s sales production from the onshore assets, averaged 36,494 barrels of oil equivalent per day (boe/d) in 2013 and 39,266 boe/d in the first half of 2014.
Oando said: “Upon completion of the transaction, OER will be positioned as one of the leading E&P players in the Nigerian oil & gas sector, as measured by end-2013 proved plus probable reserves of 230.6 MMboe.
“The transaction was financed with an approximate 50/50 debt-equity ratio and is immediately cash generative and will contribute significantly to the cashflows of the company.
“This transaction represents a transformational leap forward for our company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets by focusing on those opportunities that deliver high quality growth in reserves and production,” said Pade Durotoye, Chief Executive Officer of OER.
“Our management team is familiar with these assets and possess the managerial experience and technical expertise necessary to unlock their value for our shareholders,” he added.
The Chairman, OER, Mr. Wale Tinubu, said: “We believe in the significant potential that the Nigerian oil and gas industry holds and are privileged to play a pivotal role in its consolidation, growth and development. We will continue to seek strategic opportunities that provide a platform for enhanced growth and value creation for our stakeholders.”
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