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Tag: Oando

  • Oando increases output with Qua Iboe first oil

    Oando increases output with Qua Iboe first oil

    Oil and gas giant Oando Energy Resources (OER), the upstream arm of Oando PLC, has begun production from its Qua Iboe Field.

    The feat is despite the slump in oil prices, the impact on global economies and investor confidence in the oil and gas sector being at an all-time low.

    In 2003, the Department of Petroleum Resources (DPR) awarded 24 marginal fields to 31 indigenous companies, a move initiated by the Federal Government to grow production by expanding the scope of engagement in the upstream sub-sector through indigenous participation.  However, reports indicate that this proactive initiative is yet to make a significant impact on Nigeria’s petroleum sector, worsened by the present terrain of a slump in oil prices.

    At present,  only eight of the 24 marginal fields awarded are fully operational with the rest still grappling with financial and technical challenges.

    This redundancy is further aggravated with the continued decline in oil prices. With austerity measures being implemented by the government as part of the oil price shock, local players are increasingly seeking methods to enhance the economic productivity of their operations via a diversified portfolio.

    Oando Energy Resources holds a 40% working interest in the field. In its capacity as technical services provider, the company, together with the operator and 60% owner, Network Exploration and Production Nigeria Limited (NEPN), brought the field from conceptualisation, through development, to first oil in a matter of 2 years, a record time for fields of this nature in Nigeria. Following the completion of the Maximum Efficiency Rate (MER) testing, commercial oil production from the field’s reservoirs has now commenced at 2,150boepd. The crude processing facility commissioned in the fourth quarter of 2014, was delayed until the completion of the associated cluster crude delivery and sales infrastructure into the Qua Iboe Terminal for commercial production.

    Commenting, Pade Durotoye, CEO Oando Energy Resources said: “We are delighted to have achieved this milestone, having taken this field through the full cycle of asset development, from drilling to facility engineering, construction and commissioning and also increasing our organic production contribution from our portfolio. We will now be focusing our attention on maturing the potential of this field through seismic acquisition and interpretation, and a possible multi-well drilling program. We hope the Qua Iboe field will follow in the footsteps of our successful Ebendo field, where production has increased from 900bopd (gross) at inception to over 7,500bopd (gross) through the identification and drilling of new reservoirs in the field”.

    The opportunity is clear in that these marginal fields can be turned into valuable production assets if the oil and gas companies have the requisite financial, technical and local capability.  Oando has realized this opportunity barely nine months after the completion of its landmark $1.5bn ConocoPhillips Nigeria acquisition deal.  This achievement reinforces its technical capabilities and further crystalizes Oando’s position amongst majors in the sector. The company has grown exponentially in its oil production from 5,000boepd to 53,100boepd; recent actions are evidence that despite the gloomy outlook for the sector Oando is well positioned to continue to create and realise value for its shareholders. With a focus on organic growth such as ‘Qua Iboe’ and more prospective acquisitions and mergers, the company is well on its way to reaching its daily output target of 100,000boepd in the coming years.

     

  • Seplat, Oando, others becoming big players

    Indigenous independent oil companies such as Seplat, and Oando have what it takes to play at higher level, following their acquisition of big assets in the oil and gas industry, a Professor of Energy Economics, University of Port Harcourt, Prof Wunmi Iledare, has said.

    He said the companies are raising their game amid the sale of assets by Shell, and other International Oil Companies (IOCs). Iledare said the industry, which has long been dominated by the IOCs, is seeing the emergence of indigenous firms that acquire the assets divested by these IOCs resulting in increased production levels from the locals.

    Speaking against the backdrop of the acquisition of ConocoPhillips by Oando, the listing of Seplat in London and Nigerian Stock Exchanges, and the decision of Seven Energy to secure $225million of new equity investment from Singapore Investment Company- Tamasek, the International Finance Corporation (IFC) among others, Iledare said local firms have got what it takes to undertake big-ticket transactions in the oil and gas industry.

    Iledare, who is also the President, International Association of Energy Economics (IAEE) globally, said plans by IOCs to abandon onshore for offshore activities have opened up opportunities for indigenous firms to play better.

    He said: “Unfolding events in the industry show that local firms have stepped up their game through various acquisitions in the industry. Most of the acquisitions have helped the local companies to play better and bigger.  They can now venture into areas hitherto dominated by the foreign-owned companies such as Shell, Chevron and others.

    “The only area where the domestic operators are yet to wield considerable influence is in exploration. There are Nigerians who can handle exploration activities well. They have gotten the exposure, skills, funds, and other attributes, which foreigners have. However, they need to improve on what they have going by the ever-changing methods, ideas and technology in the industry.”

    Iledare said local firms played important roles in oil and gas industry in United States, adding that  Nigerian companies can as well do the same thing.

     

  • Seplat, Oando, others becoming big players

    Indigenous independent oil companies such as Seplat, and Oando have what it takes to play at higher level, following their acquisition of big assets in the oil and gas industry, a Professor of Energy Economics, University of Port Harcourt, Prof Wunmi Iledare, has said.

    He said the companies are raising their game amid the sale of assets by Shell, and other International Oil Companies (IOCs). Iledare said the industry, which has long been dominated by the IOCs, is seeing the emergence of indigenous firms that acquire the assets divested by these IOCs resulting in increased production levels from the locals.

    Speaking against the backdrop of the acquisition of ConocoPhillips by Oando, the listing of Seplat in London and Nigerian Stock Exchanges, and the decision of Seven Energy to secure $225million of new equity investment from Singapore Investment Company- Tamasek, the International Finance Corporation (IFC) among others, Iledare said local firms have gotten what it takes to undertake big-ticket transactions in the oil and gas industry.

    Iledare, who is also the President, International Association of Energy Economics (IAEE) globally, said plans by IOCs to abandon onshore for offshore activities have opened up opportunities for indigenous firms to play better.

    He said: “Unfolding events in the industry show that local firms have stepped up their game through various acquisitions in the industry. Most of the acquisitions have helped the local companies to play better and bigger.  They can now venture into areas hitherto dominated by the foreign-owned companies such as Shell, Chevron and others.

    “The only area where the domestic operators are yet to wield considerable influence is in exploration. There are Nigerians who can handle exploration activities well. They have gotten the exposure, skills, funds, and other attributes, which foreigners have. However, they need to improve on what they have going by the ever-changing methods, ideas and technology in the industry.”

    Iledare said local firms played important roles in oil and gas industry in United States, adding that  Nigerian companies can as well do the same thing.

     

  • Analysts pick UBA, Transcorp, Oando, 16 others for high returns

    Investors seeking high-return stocks should consider United Bank for Africa (UBA), Transnational Corporation of Nigeria (Transcorp), Oando Plc, Cadbury Nigeria and 16 other stocks with potential to deliver double-digit capital appreciation.

    Analysts at BGL Plc said the downtrend in 2014 has opened attractive opportunities in the Nigerian stock market noting that Nigerian equities are currently trading at attractive compare to regional peer and other emerging markets.

    According to analysts, while Nigeria’s market price-earnings and price-to-book ratios compare favourably with other emerging markets like Brazil, Russia, India and China (BRIC) and its regional peer South Africa, price earnings ratio of most sectors on the Nigerian Stock Exchange (NSE) are also lower than those of its peers; indicating significant buy opportunities.

    Analysts at BGL outlined that banking, consumer goods, conglomerates, health care and building materials sectors present very attractive valuation at the moment.

    A list of stocks recommended by the analysts showed that Transcorp has the highest upside potential with a possible return of 140.8 per cent. Analysts said Transcorp’s share price, which opened yesterday at N3.78 per share, could rise to N8.26 per share. They noted that UBA’s share price, which opened yesterday at N4.94 per share, to rise as high as N10.51 per share. Oando has an upside potential of about 93 per cent with a possible target price of N37.95. Cadbury Nigeria is estimated to have possible upside potential of about 69 per cent with a target price of N64.81.

    Other stocks with strong return outlook included FBN Holdings, 49.7 per cent; Access Bank, 48.3 per cent; Diamond Bank, 51.7 per cent; FCMB Group, 38.3 per cent; Fidelity Bank, 56.2 per cent; Skye Bank, 62.7 per cent; Dangote Cement, 48 per cent; Lafarge Africa, 64.1 per cent; Nestle Nigeria, 40.3 per cent; PZ Cussons Nigeria, 76.8 per cent; Dangote Sugar Refinery, 71.9 per cent; Honeywell Flour Mills, 77.9 per cent and UAC of Nigeria, with potential return of 64 per cent.

    Others included Zenith Bank, with 19.9 per cent; Nigerian Breweries, 19.2 per cent, Total Nigeria, 42.8 per cent and Flour Mills of Nigeria, with potential capital appreciation of about 22.3 per cent.

    Analysts noted that the uncertainty surrounding the financial system is clearing out as the major reforms in the banking sector have been completed and the need to resume financial intermediation by banks has become glaring.

    According to analysts, the uncertainty in the banking sector led to cautious approach to investing activities; hence the below market performance of the sector.

    “However, the expected increase in liquidity from election spending may temper the effect of the tight monetary environment for the banks and boost their investing activities and profitability. It may also lead to the narrowing of yields on fixed income instruments to the benefit of the equity market. The channelling of liquidity to productive sector would help the market while stronger earnings from increased financial intermediation by banks would also boost investors’ sentiment for banking stocks,” the analysts’ report stated.

    BGL noted that due to identified infrastructure gaps in terms of housing, transportation and power, there would be more focus on building and construction going forward, which would impact positively on building and construction stocks.

    According to analysts, since the provision of the infrastructure needs is largely to be private sector driven, there would be better efficiency and transparency in the handling of the projects with positive implication for the capital market.

    Analysts pointed out that the merger between Lafarge Africa and Ashaka Cement Plc in order to achieve cost reductions through scale and removal of duplicated duties has positive potential effect on the sector while the newly launched Mortgage Refinance Company (MRC) is expected to boost housing development over time; leading to increased demand for building materials.

    “Consumer goods stocks are defensive stocks. The capacity to generate cashflow all year round portends huge value for these companies. In addition the ban on the importation of some items and the increase in tariff on some will create a favourable competitive environment for the players in the sector. The ban on importation of refined cube sugar is expected to generate increased business and volume sugar manufacturers; hence our optimism on their stock performance. The return to profitability of some consumer goods companies after years of negative performance signal that they have started benefitting from the restructuring embarked upon while the consistent positive performance of the industry bellwethers offers an attraction to the sector’s stocks,” the report stated.

    Analysts pointed out that although the unwieldy nature of conglomerate companies usually makes them difficult to analyse and understand, several of them are known to hide inherent values.

    They noted that in addition to risk reduction through diversification, some of the conglomerates have invested in highly profitable and cash generating business with strong upside potential, pointing out that conglomerate companies with investment in defensive sectors herald very attractive returns for investors.

    “We expect that the conclusion of the Petroleum Industry Bill to unleash significant investment in the sector, particularly unlocking value for the downstream petroleum sector as well as the upstream sector. The increased foray of indigenous oil and gas companies into the upstream and midstream oil and gas sectors and the expansion into power generation and distribution offer significant upside for the stocks of quoted oil and gas companies in Nigeria,” the analysts’ report stated.

    According to analysts, companies with operations in the upstream, mid-stream and downstream sectors like Oando Plc portends great inherent value especially with the purchase of the assets of Conoco Phillips Nigeria Limited. Most of the international petroleum marketing companies have also been consistent in their performance with attractive returns to investors.

  • Oando supports Navy with one-million litre fuel tank

    Oando Nigeria Plc has boosted Naval operations by providing it with a million litres fuel gas storage capacity, the company’s Group Managing Director, Wale Tinubu, has said.

    Speaking during the inauguration in Lagos, Tinubu said the facility would guarantee an uninterrupted supply of fuel gas and seamless operations of the Naval ships.

    Tinubu, who was represented at the event by the Chief Executive Officer, Oando Marketing Company, Yomi Awobokun, said the project was in line with the Navy’s transformation agenda of providing effective monitoring services of the nation’s waterways.

    He said efforts were on-going to build the facility in Naval stations across the country, as part of efforts to make the institution more formidable in Africa.

    Tinubu said: “Oando is replicating the facility in all the Naval stations. We have articulated our plans, and we are working with the Navy’s top brass to replicate the structure in Navy-facilities. The Navy conceived the idea of having a fuel gas storage facility in its formation, and we have keyed into it. We are happy that Navy approached us on the issue. Oando is keen to help Navy deploys its fleets through the facility, whenever the need arises.

    He added: “Oando is working with the Navy on how to provide and implement new initiatives and make it roles unparallel in the continent soon. We have since positioned ourselves as a partner with the Navy in order to help strengthening the force.’’

    Tinubu said the company has tanks of gas fuel buried in Navy facilities at Victoria Island and Apapa in Lagos to help the Navy access the product.

    Also, the Chief of Naval of Staff, Vice Admiral U. O. Jibrin, said Navy and Oando had evolved  partnership arrangement in the last 18 months for growth.  Jibrin, represented by the Chief of Logistics, Naval Headquarters, Rear Admiral Ikot Ibao, Jibrin said the Navy the facility would change the process of delivering gas fuel to the Navy.

  • Oando supports Navy with fuel tank

    The Group Managing Director, Oando Nigeria Plc, Wale Tinubu yesterday in Lagos said the oil major has boosted operations of the Nigerian Navy by providing it with a one-million-litre fuel storage capacity tank.

    Speaking during the commissioning of the facility in Lagos, Tinubu said the would guarantees an uninterrupted supply of fuel and seamless operations of naval ships.

    Represented at the event by the Chief Executive officer, Oando Marketing Company, Yomi Awobokun, he said the project is in line with the Navy’s Transformation Agenda of providing effective monitoring services of the nation’s waterways.

    He said efforts are on-going to build the facility in all naval stations across the country as part of efforts to make the institution more formidable in Africa.

    Tinubu said: ‘’ Oando is replicating the facility in all the Naval stations.  We have articulated our plans, and we are working with the Navy’s top brass to replicate the structure in Navy-owned facilities. The Navy conceived the idea of having a fuel gas storage facility in its formation, and we have keyed into it. We are happy that the Navy approached us on the issue.  Oando is keen to help Navy deploy its fleets through the facility whenever the need arises.

    ‘’Oando is working with the Navy on how to provide and implement new initiatives and make its roles unparallel in the continent soon. We have since positioned ourselves as a partner with the Navy in order to help strengthening the force.’’

    Tinubu said the company has tanks of fuel buried in Navy facilities at Victoria Island and Apapa in Lagos to help the Navy access the product for operations.

    The Chief of Naval of Staff, Vice Admiral UO Jibrin, said the Navy and Oando have evolved partnership arrangement in the last 18 months for growth.

    Represented by the Chief of Logistics, Naval Headquarters, Rear Admiral Ikot Ibao, he said the facility would change the process of delivering fuel to the Navy.

    ‘’Most of the supplies were through the trucks. Now that we have this kind of facility, it means cutting down the cost of stock-piling the product,’’ Jibrin added.

  • Oando grows Q3 net profit by 76% to N11b

    Oando Plc optimized its bottom-line performance in the third quarter as significant improvements in top and midline costs moderated decline in turnover and returned higher earnings to shareholders.

    Key extracts of the interim report and accounts of Oando for the nine-month period ended September 30, 2014 showed that while turnover dropped by 12.5 per cent, the group drew on improved input and marketing costs to grow gross profit and operating profit by 70.4 per cent and 97.3 per cent respectively. Net profit after tax rose by 75.7 per cent.

    Group turnover stood at N338.11 billion in third quarter 2014 compared with N386.25 billion in corresponding period of 2013. Gross profit meanwhile rose from N70.4 billion in 2013 to N79.60 billion in 2014. Operating profit also nearly doubled at N36.25 billion in 2014 as against N18.37 billion in 2013. Profit before tax rose marginally from N9.76 billion in third quarter 2013 to N10.18 billion in third quarter 2014.

    With tax gain of N523.4 million, group net profit rose to N10.70 billion in 2014 as against N6.09 billion in comparable period of 2013. Earnings per share meanwhile improved from 93 kobo to N1.26.

    Oando has, this year, recorded several milestones, including the successful acquisition of ConocoPhillips, the largest acquisition by an indigenous player in Africa; in the upstream, OML 125 production increased by 17 per cent to 651,000 bbls, while OML 56 production increased by 30 per cent to 171,000bbls compared to prior comparative period; in the midstream, Oando Gas and Power is extending its natural gas distribution network by 8.0km from Ijora to the Marina business district in Lagos state, positioning the company to benefit from the growing demand for gas and power infrastructure in the country while in the downstream, the completion of the Apapa Single Point Mooring (ASPM) Jetty, a first in Africa; with expected demurrage cost savings and additional income streams.

    On the impact of Oando’s $1.5 billion acquisition of ConocoPhillips Nigeria which has transformed the company into Nigeria’s largest indigenous oil and gas producer, it is expected that there would be further improvements in the company’s performance as the acquisition is set to increase daily oil production exponentially by 600% equivalent to 45,000 boe/d, annual revenue of over US$600 million, and annual free cash flows of $150 million.

    On the outlook for the company, group chief executive officer, Oando Plc, Mr. Wale Tinubu has said the company’s strategic refocus on the higher margin promises to create profitable growth for the company and immense value add for its stakeholders in the near term.

    “With an eye to the future, we took on our largest and most daring feat with the acquisition of ConocoPhillips Nigeria, adding capacity to support our future growth plans. We have succeeded in repositioning ourselves within the sector, and through future acquisitions and innovative efficacy we will seek to up our market share in sub-Sahara’s upstream sector within the next five years to 100,000 boe/d in net production.  We remain committed to strengthening our balance sheet and expect 2014 to be another strong year for the Company,” Tinubu said.

    He noted that the company has already seen positive indications from its active strategic initiatives; upstream investments, midstream expansion and downstream optimisation.

    Oando recently distributed a total of N2.4 billion as cash dividends to shareholders, consisting of a final dividend of 30 kobo per share for the 2013 business year financial year and an interim dividend of 70 Kobo per share for the six-month period ended June 30, 2014, bringing total dividend per share to N1.

    Chairman, Oando Plc, Oba Michael Gbadebo, said the company has already started to reap the rewards of recent strategic initiatives in the previous year.

    “We have successfully cemented our leading status as Nigeria’s premier indigenous exploration and production player, whilst also growing the midstream business and refocusing the pioneer downstream business,” Gbadebo said.

    According to him, the company will remain on the growth path and continue to work diligently to stay ahead of its peers while creating value for its shareholders..

  • Oando pays N2.4b dividend, targets N30b profit in 2014

    Shareholders of Oando Plc would receive a total of N2.4 billion as cash dividends as the leading oil and gas company reassures on the prospects of increased returns to shareholders in the years ahead.

    At the annual general meeting yesterday in Lagos, shareholders approved the distribution of N2.4 billion, consisting of a final dividend of 30 kobo per share for the 2013 business year financial year and an interim dividend of 70 Kobo per share for the six-month period ended June 30, 2014, bringing total dividend per share to N1.

    Interim report and accounts of Oando for the six months ended June 30, 2014 had shown a gross profit of N50.5 billion, an increase of 68 per cent from N30.233 billion recorded in the corresponding period of 2013. Profit before tax doubled by 103 per cent from N6.16 billion to N12.45 billion. Profit after tax jumped by 110 per cent to N8.9 billion in 2014 as against N4.27 billion in comparable period of 2013.

    On the outlook for the company, group chief executive officer, Oando Plc, Mr. Wale Tinubu said the company’s strategic refocus on the higher margin promises to create profitable growth for the company and immense value add for its stakeholders in the near term.

    “With an eye to the future, we took on our largest and most daring feat with the acquisition of ConocoPhillips Nigeria, adding capacity to support our future growth plans. We have succeeded in repositioning ourselves within the sector, and through future acquisitions and innovative efficacy we will seek to up our market share in sub-Sahara’s upstream sector within the next five years to 100,000 boe/d in net production.  We remain committed to strengthening our balance sheet and expect 2014 to be another strong year for the Company,” Tinubu said.

    He noted that in the first half of 2014, the company has already seen positive indications from its active strategic initiatives; upstream investments, midstream expansion and downstream optimisation.

    Management estimates indicated that based on the first half performance, the company is likely to exit 2014 with profit of between N24 billion and N30 billion.

    Chairman, Oando Plc, Oba Michael Gbadebo, said the company has already started to reap the rewards of recent strategic initiatives in the previous year.

    “We have successfully cemented our leading status as Nigeria’s premier indigenous exploration and production player, whilst also growing the midstream business and refocusing the pioneer downstream business,” Gbadebo said.

    According to him, the company will remain on the growth path and continue to work diligently to stay ahead of its peers while creating value for its shareholders.

    Highlighting  on the impact of Oando’s $1.5 billion acquisition of ConocoPhillips Nigeria which has transformed the company into Nigeria’s largest indigenous oil and gas producer, shareholders were assured of further improvements in the company’s performance as the acquisition is set to increase daily oil production exponentially by 600% equivalent to 45,000 boe/d, annual revenue of over US$600 million, and annual free cash flows of $150 million.

    Oando has, this year, recorded several milestones, including the successful acquisition of ConocoPhillips, the largest acquisition by an indigenous player in Africa; in the upstream, OML 125 production increased by 17 per cent to 651,000 bbls, while OML 56 production increased by 30 per cent to 171,000bbls compared to prior comparative period; in the midstream, Oando Gas and Power is extending its natural gas distribution network by 8.0km from Ijora to the Marina business district in Lagos state, positioning the company to benefit from the growing demand for gas and power infrastructure in the country while in the downstream, the completion of the Apapa Single Point Mooring (ASPM) Jetty, a first in Africa; with expected demurrage cost savings and additional income streams.

     

     

  • We have not divested our downstream, says Oando

    We have not divested our downstream, says Oando

    The management of  Oando Plc has said it has not divested its downstream business as being speculated. It noted that as part of its strategy to focus the firm’s upstream operation, it is exploring ways to see if divestment of its downstream assets would do the magic.

    Its Head, Corporate Communications, Ainojie Alex Irune, said the divestment plan is agreement with the shareholders of the company, which gave approval to partial divestment from the downstream business a few years ago.

    He said: “The Oando Group remains focused on its commitment to continued value creation for its shareholders through its strategic plan to increase its investment in the higher margin upstream, to spur long-term growth for the future of the company.

    “In line with our strategy, we received shareholder approval to partially divest from our downstream business a few years ago and are constantly exploring the best approach to executing this objective.”

    Last week, the management of Forte Oil Plc had told the Nigerian Stock Exchange (NSE) that it was in discussion with a downstream company for the acquisition of its assets. Although Forte Oil didn’t mention the name of the company it wanted to acquire its assets, stakeholders fingered Oando

  • Oando Foundation launches Ebola Education Support Fund

    Oando Foundation launches Ebola Education Support Fund

    Oando Foundation has  launched its Ebola Education Support Fund. The fund will support the education of children who have lost their parents to the deadly Ebola Virus Disease (EVD) and require financial support to continue their education.

    Ebola is a contagious and highly infectious haemorrhagic fever sweeping through West Africa.

    A statement by  the Director, Oando Foundation Tokunboh Durosaro, said the Fund was instituted to support the financial strain that may be experienced by many families because of loss of their breadwinners. This could have a huge impact on the ability of children to continue schooling thereby invariably affecting the future of our country.

    The UNESCO Education for All Report 2013/14 statistics reveals that there are 10.5 million out of school Nigerian children. The Foundation has a mandate to ensure that the devastation caused by the EVD does not increase the number of Out-of-School Children in Nigeria.

    Durosaro said: “We appreciate that the loss of a parent or both parents to EVD can be very daunting and seriously affect the future of a child.

    The importance of education cannot be underscored and this is why Oando Foundation has launched the Ebola Education Support Fund to mitigate the effect of this tragedy.

    The fund, according to Durosaro, would ensure that all affected children complete their education up to university level, notwithstanding their loss.”

    The fund will provide grants to cover school fees and other education costs of all affected children from now until graduation, the statement added.

    Further, Durosaro added that  Oando Foundation is also supporting the Ebola Containment Trust Fund to prevent further spread of the disease by donating over 5,000 protective suits, gloves, protective glasses and boot covers. These items will be distributed to health workers and medical institutions in Lagos and Rivers states.

    Oando Foundation, established in 2011, is an independent charity launched by Oando PLC, one of Africa’s leading indigenous energy solutions providers. The Foundation aims to support the Nigerian Government to meet the Millennium Development Goals to achieve universal primary education. Its mission is to radically improve the quality of teaching and learning in Nigerian schools and communities by ensuring access to world class basic education systems.

    The Foundation has adopted 48 schools across 20 states, and plans to adopt more 100 schools by 2015. The foundation has directly affected over 200,000 lives by ensuring over 100,000 pupils have access to quality primary education; broaden the capacity of over 4,000 teachers, award scholarships to over 2,560 pupils to reduce direct and indirect costs of education to students.