One of the Nigeria’s indigenous energy group, Oando Plc, has reported a profit after tax of N3.5 billion, for the FY2016, a 107 per cent increase from the loss of N49.7 billion in FY 2015.
A review of the company’s results further showed that turnover increased by 49 per cent to N569 billion from N382 billion in FYE 2015, while EBITDA increased by 51 per cent to N71.0 billion from N47.0 billion in FYE 2015, boosting investors and shareholders confidence in the brand and its management team. Commenting, Mr. Wale Tinubu, Group Chief Executive, Oando Plc said: “2016 saw the country plunge into a recession, the first in over two decades, besieged with liquidity constraints, devaluation of the naira and a slump in oil earnings due to low oil prices intensified by the insurgency in the Niger Delta.
We were proactive in the timely execution of our restructuring programme of growth in our upstream division; Deleverage, through divestments resulting in a net debt reduction of N125 billion; and Profitability by focusing on dollar denominated earnings.
Tinubu noted that in the first quarter of 2016 the company successfully restructured its existing obligations through a N108 billion Medium Term facility with a syndicate of nine leading local banks.
It also completed the full divestment of its Upstream Services business (Oando Energy Services) and the recapitalisation of its downstream business to Helios Investment Partners, a premier Africa-focused private investment firm and the Vitol Group, the world’s largest independent trader of energy commodities to the tune of $210 million.
He said :”The recapitalization of Oando’s downstream operations represents the largest inflow of foreign capital in a single transaction in the oil and gas sector in 2016. This strategic initiative is positioned to revolutionize Nigeria’s downstream sector and create one of Africa’s largest downstream operations. In furtherance of Oando being the partner of choice to foreign investors, the company concluded 2016 with the partial divestment of its midstream business, Oando Gas & Power Limited to Helios Investment Partners, a premier Africa-focused private investment firm for $115.8 million,” he said.
“In the, Upstream we witnessed a decline in production but an increase in our 2P Reserves from 445mmboe in 2015 to 469mmboe. We are hopeful that the FGN will establish a long term resolution to the conflict in the Niger Delta which will positively impact the oil and gas industry, consequently ramping up our daily production. In the Midstream we concluded the partial divestment of Oando Gas and Power (OGP) to Helios Investment Partners to further expand our gas footprint, whilst in the Downstream our trading business continued to make in-roads in crude lifting” Tinubu said.
“Today, Oando has significantly reduced its net debt from N355.4 billion in 2015 to N230.6 billion, signalling a further reduction in the company’s debt overhang, a situation critiques have often considered detrimental to the Group. “Amidst the terrain Oando recorded other operational milestones. In its upstream business, Oando Energy Resources, hedged approximately 46 per cent of crude production – as at December 31, 2016, 9,590 bbls/day was hedged at $65/bbl (average) with expiry dates ranging from July 2017 to January 2019, and further upside on the condition of certain price targets being met.
“The company increased its 2P Reserves by 5 per cent from 445mmboe in 2015 to 469.3mmboe due to reservoir performance and committed to the sale of its interests in OMLs 125 and 134 to the Operators for cash proceeds of $5.5 million and assumption of $88.5 million in cash call liabilities due to the joint ventures,” he noted.