The biggest indigenous oil and gas concern, Oando, plans to fund its $1.79 billion purchase of ConocoPhillips’ local unit through a sale of debt and shares.
After paying a cash deposit of $435 million, Oando plans to raise the balance of $1.36 billion through private placements, a share sale and an $800 million loan from local and international lenders, it said today in a statement. The acquisition was announced yesterday.
“This will be a transformational transaction,” Wale Tinubu, chief executive officer of the Lagos-based company, said in the statement. Oando is seeking to become one of Nigeria’s top oil explorers and producers, he said.
Oando pumps 4,800 barrels of oil a day from its Abo and Ebendo fields. The Conoco assets give it about 43,000 barrels a day from onshore fields, 213 million barrels of oil-equivalent in proved and probable reserves, and a 17 percent equity stake in the proposed Brass liquefied natural gas project.
ConocoPhillips (COP) has been selling assets to raise cash for spending plans and to focus on more profitable businesses. Its latest divestment allows Oando to expand in Africa’s top oil- producing nation, which is dependent on crude exports for more than 90 percent of foreign income and about 80 percent of government revenue.
Oando expects the transaction to close in the first half of next year.
Culled from Bloomberg