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Tag: Oando

  • Oando targets N100b profit on ConocoPhillips’ acquisition

    Oando targets N100b profit on ConocoPhillips’ acquisition

    Oando Plc will more than double its pre-tax profit to some N100 billion as the integrated energy group looks to unlock immense potential of its acquisition of ConocoPhillips (COP)’s Nigerian businesses.

    Speaking during a visit to the Nigerian Stock Exchange (NSE) yesterday, group chief executive, Oando Plc, Mr. Wale Tinubu, said the conclusion of the acquisition of COP, Oando’s earnings before interest, taxes, depreciation and amortisation (EBITDA) will rise from the current annual average of N45 billion to N100 billion.

    He said the increase in earnings would also lead to improvement in dividend payout to shareholders going forward.

    According to him, Oando has technically concluded the momentous acquisition having pooled the final financial considerations to complete the $1.55 billion agreement with COP.

    “All we require now is the consent of the minister, which is the legal requirement. The transaction will not be fully consummated until the minister consent is received,” Tinubu said.

    He assured the stockbrokers that ministerial consent is a near certainty, noting that the final approval will be granted very soon.

    He reiterated that the acquisition is a game changer for Oando as it will immediately position the company as the largest indigenous oil producer in Nigeria. Oando through OER currently produces 4,500 barrels of crude oil per day from two producing fields, with this acquisition it will start producing circa 50,000 barrels per day from six producing fields.

  • Oando’s rig achieves safety record

    Oando’s rig achieves safety record

    Oando Energy Services Limited (OESL), a subsidiary of Oando Plc that manages swamp drilling rigs and other upstream services, has said its rig “OES Teamwork” achieved four years of continuous operations without a Lost Time Incident (LTI). It described it as a significant milestone in the oil and gas industry.

    LTI is the amount of injury sustained on the job capable of obstructing a worker from the execution of a task or results in downtime in operations. It is an oil and gas industry benchmark that estimates adherence to safety and environmental requirements in the course of operations.

    Oando’s spokesman, Alex Irune, said OES Teamwork has worked continuously for four years without a Lost Time Incident (LTI) on its “OES Teamwork” rig cumulating in over four million man hours of LTI free operations on its four rigs.

    Chief Executive Officer of OES, Mr. Bandele Badejo said: “We are extremely proud of this significant industry milestone, and the charge going forward is to sustain this great safety track record, ensure we maintain focus on the daily activities that lead to LTI free operations on all OES rigs, and to continuously identify areas for further improvement.”

    “OES Teamwork rig has worked on some of Nigeria’s well-known oil industry projects, and was one of the first rigs to drill in the Niger Delta region of the country. The 3000 HP swamp drilling barge equipped with 10,000 psi Blow Out Preventers (BOP) systems, has operated within the area for the past 20 years.”

    Also commenting, Oando’s Chief Environmental, Health, Safety, Security and Quality (EHSSQ) Officer, Mr. Chijioke Akwukwuma said: “The EHSSQ performance of the OES team continues to make us proud, and the achievement of over four million man hours without an LTI on all our rigs demonstrates what can be attained in the midst of substantial challenges. We are extremely passionate about safety at Oando, and we will continue to inculcate this culture among our employees.”

    Presently, OES has attained a combined LTI of over four million man hours on its four rigs, invested over $450 million in acquisitions and upgrades, and continued to invest heavily in asset maintenance and integrity programmes with the aim of fully optimizing operational performance and expediting its growth, Irune said.

     

  • Oando signs 5m euro gas pact with Germany

    Oando signs 5m euro gas pact with Germany

    Oando Marketing Plc, has signed an agreement with KFW, a German government owned development bank, to invest five million euros (over N1billion) to further enhance availability of cooking gas to low income earners in the country.

    The agreement was signed in Frankfurt last week by KFW’s Director of the Department, ‘Africa Regional Programmes,’ Dr. Thomas Duve and Oando Marketing’s Chief Executive Officer, Abayomi Awobokun.

    Speaking on the development, Awobokun, revealed that funds invested through the agreement will be made available to select Micro Finance Institutions that will then lend the funds out to end users of cooking gas as well as micro, small and medium sized enterprises for their LPG investments.

    Earlier, the firm had signed a Memorandum of Understanding (MoU) with Nigeria’s National Association of Microfinance Banks (MFBs) in alignment with the sole objective of making a cleaner and safer cooking fuel more accessible to Nigerians.

    With the MFB partnership, the reach of the company’s 3-in-1 3kg O-Gas cylinder is now extended and made accessible to virtually everyone as intending end users may approach a wide range of Micro-Finance Banks with only N200 as initial deposit and walk away with the complete set of portable 3kg O-Gas.

    However, such buyers will be expected to make a N200 daily deposit with any of the partnering micro finance banks for 30 days until they would have completed the payment cycle for the 3-in-1 unit.

  • Why Oando is investing in power sector

    Why Oando is investing in power sector

    Oando Gas and Power (OGP) realises the correlation between electricity and the development of any society, and it is this reason that made it go into independent power production (IPP) with natural gas to close the supply gap, the firm has explained in a statement.

    The firm lamented that despite the abundance of sources of electricity generation including natural gas, coal, water resources, high insulation, fissionable materials, biomass, among others, power situation in Nigeria remains inadequate and unreliable.

    According to the firm, in 2001, a report by the United Nations Developmental Programme (UNDP) showed that about 60 per cent of Nigerians have no access to electric power supply, adding that currently, peak energy demand for the country is estimated at 10,000 megawatts (MW), with total generation put at 6,000MW, while actual daily generation oscilates between 2,000Mw and 3,500Mw.

    “Over the past two decades, Nigeria’s population has increased to about 160 million, while power generation capacity has stagnated.

    “These factors, combined with the poor maintenance of existing power generation stations, inadequate gas supply, hydrological variations, vandalisation of gas supply, transmission and distribution facilities, led to loss of large quantum of energy,” the firm added in the statement.

    State, the State House of Assembly, and all state ministries and adjoining campuses.

    The Alausa IPP is managed by Alausa Power Limited (APP), a Special Purpose Vehicle (SPV) established for the development of captive power solutions with a primary focus on the construction of dedicated power generation plants for the Lagos State Government. Remarkably, it is also the second successful IPP for OGP following the Akute Power Limited’s 12.15MW power plant which was commissioned to improve power supply to the Lagos Water Corporation.

    Alausa IPP provides a consistent, viable, and cost-friendly alternative to the current erratic power supply to the secretariat provided by a combination of the Power Holding Company of Nigeria, and to a larger extent self-generation via diesel engines. The mere fact that the Alausa IPP is a natural gas fired plant will help to significantly reduce the carbon pollution that emanates from the 70 plus diesel generators that are currently in use, and will lead to a drastic reduction in the LASG Secretariat’s fuel costs by over 70 per cent. Undoubtedly, the presence of consistent and reliable power supply to the secretariat will increase the functionality and efficacy of its employees within the secretariat, which are paramount to the progression of the state.

    From 1970 to the present, carbon emissions increased by 30 per cent in developed countries, while increasing 80 per cent in developing countries. Researchers believe that using combinations of resources different from those used in the past to produce electricity—and integrating them in a cost-effective way—could ease the health, economic, and environmental effects of an increase in demand for electricity services.

    It is estimated that the entire Alausa secretariat requires an average of 4.0 megawatts; 5.5MW during peak periods, and about 0.5MW during off peak periods. The disconnection of the secretariat complex from the PHCN grid should make improved electricity available to many residents in Lagos State, thus enhancing security for home owners and road users at night. In addition, the project is expected to provide various classes of employment, from local labour to specialized experienced services.

    In pursuit of its aspiration to build the largest gas grid in sub-Saharan Africa, OGP’s East Horizon Gas Company (EHGC), another Special Purpose Vehicle in Akwa Ibom and Cross River States, completed an inter-state 128 km gas pipeline project in the first quarter of 2011. Presently, the grid delivers gas to United Cement Company (UNICEM) in Calabar, as well as other consumers in the Cross River-Akwa Ibom industrial cluster.

    Oando Gas and Power is also set to deploy Compressed Natural Gas (CNG) from its Lagos-based mother station, thus guaranteeing access to the benefits of natural gas for small scale and stranded consumers beyond its pipeline coverage.

  • Oando to boost power supply in Lagos with IPP

    Oando to boost power supply in Lagos with IPP

    THE multi-billion naira Alausa Independent Power Project (Alausa IPP) will be inaugurated on Thursday to boost electricity supply at the Lagos State Secretariat in Ikeja.

    The secretariat houses Governor babatunde Fashola, his deputy, Mrs Adejoke Orelope-Adefulire, the House of Assembly, ministries and , departments and agencies (MDAs).

    The Alausa IPP is a joint venture between Oando Gas and Power and the state government. It was built for N3.2 billion.

    In a statement, Oando described the Alausa IPP as a viable, cost-friendly alternative to the current power supply to the secretariat through a combination of the Power Holding Company of Nigeria (PHCN) and to a larger extent, self-generation via diesel engines.

    The natural gas fired plant, Oando said, would reduce the pollution that emanates from the over 70 diesel generators that are currently in use, and reduce in the government’s fuel costs by over 70 percent.

    The government has repeatedly said that consistent and reliable power supply to the secretariat would increase the efficiency of its workers.

    The Alausa IPP is the second successful IPP by Oando following the Akute Power Limited’s 12.15 Megawatts (MW) power plant which supplies power to the Lagos State Water Corporation. It is estimated that the secretariat requires an average of 4.0 megawatts; 5.5MW during peak periods and about 0.5MW during off peak periods. The disconnection of the Alausa secretariat complex from the PHCN grid will make additional electricity available to many residents in the State. The streetlights on the Obafemi Awolowo Way will be powered by the plant, thus enhancing security for road users at night.

  • ‘Ex-Delta governor has no hidden assets in Oando’

    ‘Ex-Delta governor has no hidden assets in Oando’

    Former Governor of Delta State James Ibori has no hidden assets in Oando Plc, the company said.

    It said the ex-governor has insignificant shares in it and it has not been involved in money laundering.

    Its Corporate Communications Manager, Alero Balogun, said the company is a publicly traded one, therefore, the management doesn’t control transactions on the floor of the stock exchange.

    She said: “We state categorically that Mr. James Ibori does not own ‘a large part of Oando’ and that this statement is incorrect and misleading. Oando is a publicly traded company listed on the Nigerian and Johannesburg Stock Exchanges and does not and cannot control the trading in its securities on the floor of the respective exchanges.

    “Based on our current shareholding register, Mr. James Ibori’s shareholding stands at 443 shares out of a total issued and paid up share capital of 6.8 billion ordinary shares, which is clearly insignificant, and cannot be considered as ‘a large part of Oando.”

    Oando also stated that “it does accept that sometime in 2004, in the normal course of its business, it sold some of its foreign exchange earnings for Naira and the recipient of the US Dollars was a company which has now turned out to be one controlled by James Ibori. At the time of the transaction, this information was unknown to Oando. The total amount was US$2.7 million made in three separate transactions over a period of about seven months. This amount was insignificant considering the company’s turnover of approximately US$800million in 2004.

    “The above constitutes the only transactions between Oando and any company controlled by Mr. Ibori. Consequently, Oando cannot be described as a company where James Ibori has hidden assets as a result of these foreign exchange transactions.”

    Commenting on the statements made in court, Andrew Baillie QC, counsel representing Oando also stated outside the courtroom: “It is unfortunate that our client has been dragged into these proceedings. There is no suggestion from the prosecution of any wrongdoing or involvement in wrongdoing on the part of Oando.”

    It said that Ibori, who governed Delta State from 1999 to 2007 and influenced national politics, was jailed for 13 years in Britain after pleading guilty in February 2012 to 10 counts of fraud and money-laundering worth 50 million pounds ($79 million).

    A three-week confiscation hearing began at London’s Southwark Crown Court yesterday during which prosecutors will present evidence of Ibori’s assets and seek court orders to have them seized. Defence lawyers will dispute the prosecution case.

  • Oando to build 50 mega stations

    The Chief Operating Officer of Oando Marketing Plc, Mrs. Olaposi Williams, announced in Lagos on Sunday that the company would build 50 mega stations within the next five years to boost petroleum products supplies nationwide.

    Williams made the disclosure at a ceremony to announce modalities for the building of the stations.

    She, however, did not put a figure to the cost of the project.

    She said that each of the stations which would be built in major cities in the country would have capacity to dispense at least three trucks of premium motor spirit per day.

    The COO said the new stations, which she described as one-stop shop, would be located in Lagos, Abuja, Port Harcourt and other key cities in the south-east, northern and south-west geo-political zones of the country.

    According to her, Lagos will have the lion’s share of the stations with 50 per cent, the Federal Capital Territory 30 per cent, while the south- east and north will get 10 per cent each.

    “We hope to build 10 mega stations every year in the next five years, which will bring the number to 50. We are repositioning our retail outlets across the country, especially filling stations which have been driving our volume.

    “Before now we had over 1,000 stations but we have 338 of them that are dispensing over a million litres per month, about three trucks per day. In the last one year, we have upgraded 10 stations in Lagos, Port Harcourt and Abuja, “the News Agency of Nigeria quoted the Oando chief as saying at the forum.

    Williams noted that the plan of the company was to build at least 10 stations in a year, noting that nothing would be compromised in the bid to achieve the highest standards in dispensing fuel to customers.

     

     

  • Oando excites shareholders with N5.1bn dividend

    Oando excites shareholders with N5.1bn dividend

    Shareholders of Oando Plc have approved the payment of the N5.1bn dividend for the year ended December 31, 2012.

    The shareholders, who gave the approval at the company’s Annual General Meeting held in Lagos on Thursday, praised its board and management for guiding the company to achieve positive results.

    The company had reported an increase of 526 per cent in its profit after tax, which saw its PAT rise to N10.9bn from N1.8bn in 2011.

    According to the management of the firm, it made the profit from a turnover of N675.5bn in 2012, reflecting a growth of 18 per cent from the N573.2bn it made the previous year.

    It was based on this performance that the directors proposed the payment of a dividend of N5.1bn, which translates into 75 kobo per share.

    Commenting on the results, the Chairman,OandoPlc, Oba Michael Gbadebo, said the company was on the verge of hitting the growth target it had set, following the acquisition of ConocoPhillips Nigerian’s assets.

    He said, “This year (2013) will witness the closure of this deal, thereby signalling our arrival as a major upstream player in Nigeria.”

    He  explained that Oando’s  midstream business had expanded its pipeline network, while the downstream businesses would grow their market share and focus on new areas.

    “Overall, we are confident and optimistic in what the future holds and look forward to growing  shareholder value in the years ahead,” he said.

    Ahead of the AGM, the Group Chief Executive Officer of the company, Mr. Wale Tinubu, had expressed satisfaction at the performance of the firm in 2012.

    He said, “We are pleased to report our 12 months performance for 2012, in which we have taken positive steps in the implementation of our strategic focus to build our diversified higher margin business segment.”

    Commenting on the  major decisions taken in the year under review, he said,”In the upstream division,  we  listed Oando Energy Resources on the Toronto Stock Exchange in Canada; increased our production capacity through successful drilling campaigns on OML 125, the Ebendo Field and the Qua Iboe Field.”

    He added, “We also paid a 25 per cent deposit of $435m for the acquisition of ConocoPhilips Nigerian business, which will add 43kboe to our daily production and substantially increase our 2P reserves and best estimate contingent resources  to 235mmboe  and 237mmboe respectively.”

  • Oando exceeds projected dividend

    Oando exceeds projected dividend

    The board of Oando Plc has recom mended distribution of N5.1 billion as cash dividends for the year ended December 31, 2012, translating to an increase of 59 per cent over the N3.2 billion projected as cash payouts for the year in the recent forecasts of the integrated energy company.

    The positive dividend recommendation followed impressive growths across key performance indicators in 2012 as the company rode on the back of increased cost efficiency to grow net profit by 527 per cent. Basic earnings per share leapt by 532 per cent from 75 kobo in 2011 to N4.74 in 2012, providing adequate ground for the current increase in payout and sustainable future payouts.

    Key extracts of the audited report, prepared in line with the International Financial Reporting Standards (IFRS), showed that all indices surpassed earlier management estimates. Net profit stood at N10.79 billion in 2012 compared with N1.72 billion in 2011. The bottom-line performance underscored the courageous decision of the company to once and for all deal with nagging extraordinary item in the previous year.

    The report showed that profit before tax rose from N12.97 billion to N17.55 billion. Gross profit lept from N65.83 billion to N81.62 billion. Turnover stood at N673.18 billion in 2012 as against N571.31 billion in 2011.

    The earnings report justified the show of confidence by shareholders during the recent rights issue, which was oversubscribed. Oando had raised about N55.2 billion from the rights issue to existing shareholders, slightly above the initial target of N54.6 billion. The company had issued 4.548 billion ordinary shares of 50 kobo each to existing shareholders at N12 per share between December 2012 and February 2013 with the intention of raising N54.6 billion.

    However, details of the allotment showed that a total of 11,714 acceptances for 4,596,055,622 ordinary shares, valued at N55.153 billion were received in connection with the rights issue. All 11,714 acceptances were found to be valid under the terms of the rights issue and were all processed, leading to a subscription of 101 levels.

    In the forecasts to the rights issue, shareholders were expected to receive about N3.2 billion for the 2012 business year. Gross dividend is expected to more than double to N8.83 billion in 2013 and N17.83 billion in 2014. Shareholders are projected to receive about N17.06 billion in 2015.

    Market analysts see Oando as a low cost route into Nigeria’s attractive energy sector, citing the company’s investments in the high margin upstream division that will transform the business significantly and increase value creation for the shareholders.

  • Oando raises N55.2b in rights issue

    Oando Plc has raised about N55.2 billion from its recent rights issue to existing shareholders. The figure is slightly above the initial target of N54.6 billion.

    The company had issued 4.548 billion ordinary shares of 50 kobo each to existing shareholders at N12 per share between December 2012 and February 2013 with the intention of raising N54.6 billion.

    Allotment approved by the Securities and Exchange Commission (SEC) made available at the weekend showed that Oando succeeded in raising N55.2 billion, which indicated the high level of investors’ confidence in the company.

    Details of the allotment showed that a total of 11,714 acceptances for 4,596,055,622 ordinary shares, valued at N55.153 billion were received in connection with the rights issue.

    All 11,714 acceptances were found to be valid under the terms of the rights issue and were all processed, leading to a subscription of 101 levels.

    Market analysts said the success of the rights issue did not come as a surprise noting that shareholders were responding to a positive outlook based on strong market fundamentals.

    Analysts said there had been last minute rush for the shares few days to the closure of the offer following the attractive price and positive assessments of the company’s business fundamental and future outlook.

    They noted that the company has made huge investments over the years that would begin to yield fruits very soon and analysts had said that the prospect of having a stake in the very lucrative upstream sector would increase investors’ appetite for Oando shares in the rights issue.

    According to analysts, Oando is entering a new frontier in its integrated energy business model which will see the company increase investments in the upstream segment of the Oil & Gas space.

    Analysts pointed out that Oando is a low cost route into Nigeria’s attractive energy sector citing the company’s investments in the high margin upstream division that will transform the business significantly and increase value creation for the shareholders.

    Analysts said the acquisition of ConocoPhillips’ entire oil and gas assets in Nigeria put the company on the stead to increase its oil production to almost 50,000 barrels of oil per day while it also extends its footprint into the liquefied natural gas (LNG), as well as power generation.

    Oando had paid an initial $435 million deposit and the balance of $1.3 billion will be paid from the net proceeds of the rights issue. A syndicate of international banks has lined up to finance the $800 million debt portion of the transaction.