The management of Oando Plc has notified the public of its acquisition of the Nigerian upstream oil and gas assets of ConocoPhilips in a deal valued at $1.5 billion.
Daily Independent reports
The transfer of ownership, which makes Oando number one Nigerian oil and gas exploration company with 16 assets and 230.6mmboe proved and probable reserves, trailed by Seplat with five, involved a total cash consideration “of $1.5 billion after customary adjustments plus a deferred consideration of $33 million”.
The $33 million is to be paid in two equal instalments over a 12-month period.
According to a joint statement by Pade Durotoye, chief executive, and Tokunboh Akindele, Head, Investor Relations of Oando Energy Resources respectively, and Jeremy Dietz/David Feick, oil and gas businesses acquired consist of Phillips Oil Company Nigeria Limited’s 20 per cent non-operating interest in Oil Mining Leases (OML) 60, 61, 62, and 63.
There is also related infrastructure and facilities in the Nigerian Agip Oil Company Limited Joint Venture, which also involves the Nigerian National Petroleum Corporation (NNPC) with a 60 per cent interest and NAOC (20 per cent and operator).
Other components of the deal include Conoco Exploration and Production Nigeria Limited, which holds 95 per cent operating interest in OML 131 located 70km offshore in water depths of 500m to 1,200m; and Phillips Deepwater Exploration Nigeria Limited, which holds a 20 per cent non-operating interest in Oil Prospecting Licence (OPL) 214 located 110km offshore in water depths of 800m to 1,800m.
Co-owners of this 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).
The statement noted that “through this transaction, OER will indirectly own all of the issued share capital of POCNL, CEPNL and PDENL. The effective date of the transaction is January 1, 2012”.
Also, in connection with this transaction, OER retained The Petroleum and Renewable Etnergy Company Limited (‘Petrenel’) as independent reserves.
“The management of Oando Energy believes that the transaction represents a significant opportunity for OER to create scale and significant value for its shareholders, particularly with total reserves and resources associated with the transaction of 211.6 million barrels oil equivalent Proved plus Probable Reserves of; Best Estimate Contingent Resources of 498.6 MMboe; unrisked best prospective resources of 656.9 MMboe.”
Others include “20 per cent working interest in the NAOC JV, which includes 40 discovered oil and gas fields, of which 24 are currently producing, approximately 40 identified prospects and leads, 12 production stations, approximately 1,490km of pipelines, three gas processing plants, the Brass River Oil Terminal, the Kwale-Okpai 480 MW combined cycle gas-fired power plant (Kwale-Okpai IPP), and associated infrastructure”.
The transaction was financed equally between debt and equity, just as it is immediately cash generative and will continue to contribute significantly to the group’s cash flow.
Commenting on the landmark deal, Durotoye said the “transaction represents a transformational leap forward four 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”.
Continuing, he assured that Oando Energy’s management “is familiar with these assets and possesses the managerial and technical expertise necessary to unlock their value chain for our shareholders”.
Wale Tinubu, chairman of OER, 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 to enhance growth and value creation for shareholders.”