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Oando Completes Acquisition of ConocoPhillips’ Nigerian Assets

Oando Completes Acquisition of ConocoPhillips’ Nigerian Assets

Oando Energy Resources Incorporated, a subsidiary of Oando Plc, has concluded the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips for a total cash consideration of $1.5 billion after customary adjustments plus a deferred consideration of $33 million.

ConocoPhillips’ Nigerian oil and gas businesses consist of onshore and offshore businesses.

The onshore business consists of Phillips Oil Company Nigeria Limited, which holds a 20-per-cent non-operating interest in Oil Mining Leases (OMLs) 60, 61, 62, and 63 as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited (NAOC) Joint Venture (NAOC JV).

The other co-ventures are the Nigerian National Petroleum Corporation (NNPC) with a 60-per-cent interest and NAOC, which is the operator with 20 per cent interest.

The offshore business consists of Conoco Exploration and Production Nigeria Limited, which holds a 95 per cent operating interest in OML 131 located 70 kilometres offshore in water depths of 500 metres 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 110 kilometres offshore in water depths of 800m to 1,800m.

The other co-ventures are ExxonMobil, which is the operator with 20 per cent interest, Chevron (20 per cent), Svenska (20 per cent), Nigerian Petroleum Development Company (15per cent) and Sasol (5per cent).
In June 2014, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, approved the conversion of OPL 214 to OML 145 for an initial period of 20 years.

The Head of Corporate Communications, Oando Plc, Alex Irune, said in a statement yesterday that by this transaction, Oando Energy Resources would indirectly own all of the issued share capital of Phillips Oil Company, Conoco Exploration and Production Nigeria and Phillips Deepwater Exploration Nigeria with January 1, 2012 as the effective date of the transaction.

This transaction, according to the statement, would post the company as the largest indigenous oil producer in the country.

He further stated that in connection with this transaction, Oando retained the Petroleum and Renewable Energy Company Limited (Petrenel) as Independent Reserves Evaluator to report on the reserves and resources of the newly acquired assets – OMLs 60, 61, 62 and 63 and OMLs 131 and OPL 214 (OML 145, after conversion).

Irune also said the Independent Reserves Report has an effective date of December 31, 2013 and has been prepared in accordance with National Instrument 51-101 standards and the guidelines set out in the Canadian Oil and Gas Evaluation Handbook.

“All figures quoted below are gross to Oando Energy Resources, that is, before deduction of royalty and tax, unless otherwise stated. All reserves quoted below have an effective date of December 31, 2013,” he said.
According to him, the transaction generates immediate cash and would contribute significantly to the cash flows of the company.

The Chief Executive Officer of Oando Energy Resources, Pade Durotoye, said the management team of the company was familiar with these assets and possesses the managerial experience and technical expertise necessary to unlock their value for the shareholders.

“This transaction represents a transformational leap forward for 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,” Durotoye said.

Excited at the conclusion of the long-drawn transaction, Chairman of Oando Energy Resources, Mr. Wale Tinubu, said: “The business environment in Africa is changing rapidly due to the continent’s transformation, and we are taking advantage of this to further establish our organisation as Africa’s leading indigenous independent oil and gas company. We believe in the significant potential that the Nigerian oil and gas industry holds. We are privileged to play a pivotal role in its consolidation, growth and development; and we’ll continue to seek strategic opportunities that enable enhanced growth and value creation for our stakeholders.

“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 for enhanced growth and value creation for our stakeholders.”

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