BY KUNLE KALEJAYE

Nigeria’s indigenous energy group, Oando, is set to complete its purchase of ConocoPhilips’ Nigerian assets

Once concluded, the transaction will substantially boost Oando Energy Resources’ (OER) operations, with circa production of 50,000boepd post acquisition, generating extensive growth in revenue and profitability.

The company is said to be listed on both the Nigerian and Johannesburg Stock Exchange.

According to a report by SBG Securities Oil & Gas Analyst, Gbenga Sholotan, Oando has succeeded in securing all financing required towards the acquisition of ConocoPhillip’s entire Nigerian business for a reported $1.66 billion.

Sholotan in the report said “Oando recently raised an aggregate of US$442m through the sale of the East Horizon Gas Company for $250 million and a special placement of 2.05bn shares for $192 million.

“All funding sources have now been secured to be in a position to close the ConocoPhillips Nigeria (COPN) asset acquisition.

We do not consider the need to obtain the minister of petroleum’s consent as a major risk to this transaction, given antecedents of divestment over the last three years.”

Recall that Oando had paid an initial deposit of $450 million, and has received additional funds through debt commitment letters received from financial institutions ($815 million), private placement of shares ($200 million), and the recent sale of its EHGC asset to Seven Energy for $250 million.

The acquisition will also immediately position OER as one of the largest indigenous oil producers in Nigeria, as the company will also grow its 2P reserves and 2C resources by 221MMboe and 492MMboe respectively.