Nigeria’s Oando Eyes 100,000BPD, 500MMboe By 2017
Oando Energy Resources, OER, has expressed optimism of meeting its medium term new production targets of 100,000 barrels of oil equivalent per day, bpd, and reserves of 500 million barrels of oil equivalent, MMboe by 2017.
OER, said such high expectations is being driven by its reserves, exploration drive and vision of becoming a leading exploration and production, E&P player in the Nigerian oil and gas sector.
A statement from Oando made available to Vanguard on Tuesday, indicated that the company is well on track to meeting these production targets with its recent announcement of an 82 percent increase in reserves despite the downturn in the sector.
The company’s proved and probable net reserves, 2P reserves were significantly increased from 230.6 million barrels of oil equivalent, MMboe to 420.3 MMboe at an economic value of $545 million to $1.8 billion.
The statement said the reserves increase “is especially reassuring for our shareholders, as it is likely to have a positive impact on future revenue for the business.”
COP acquisition pays off
Furthermore, it said the quantum leap in reserves now more than justified its July 2014, acquisition of the ConocoPhillips, COP assets in Nigeria, for a whopping $1.5 billion, a transaction many believed was rather ambitious.
But with the increase in reserves, Oando maintained that the acquisition was “a strategically important and timely move.”
It added that “The new reserves figures are based on an annual evaluation report of OER’s reserve and resources conducted by worldwide petroleum independent company, DeGolyer and MacNaughton, D&M.”
Commenting on these developments, the Chief Executive Officer OER, 
, was quoted as sayingd: “We are very pleased with the new 2014 Reserves numbers which confirms our thesis at the time we embarked on our transformative COP acquisition.
“This large Reserves base gives us a substantial value driver with the opportunity to further enhance production over the coming years, and pursue in-field exploration prospects that will complement our resource base and ensure we are well positioned within the sector.”
Reaps big from oil crash
In the last 10 months, Oando has evolved from an indigenous player producing about 4,500 boepd from three producing assets to being ranked alongside the international majors with a daily production of 53,000 boepd from seven producing assets.
It was also noted that as a result of the slump in oil prices, 2014 ended on a sour note for the petroleum sector. This downward trend has continued in 2015, with speculations that as much as $1.6 trillion will be wiped out in earnings for producing companies and countries.
This notwithstanding, Oando said it has kept above the fray by proactively acting on a number of initiatives to sustain its viability as an investment grade stock.
Part of the benefit from these is the fact that OER recently reset its hedge from $95 to $65 per barrel, restructured its debt obligations by $238 million thereby making savings of $65 million in interest payments over the remaining term of the loan facilities.
These actions have seen a considerable reduction in its debt, an eradication of significant interest payments and an improvement in its balance sheet.
With the global downturn and energy firms declaring write downs Oando is still uniquely well-positioned and is clearly a sure bet investment.
OER, said such high expectations is being driven by its reserves, exploration drive and vision of becoming a leading exploration and production, E&P player in the Nigerian oil and gas sector.
A statement from Oando made available to Vanguard on Tuesday, indicated that the company is well on track to meeting these production targets with its recent announcement of an 82 percent increase in reserves despite the downturn in the sector.
The company’s proved and probable net reserves, 2P reserves were significantly increased from 230.6 million barrels of oil equivalent, MMboe to 420.3 MMboe at an economic value of $545 million to $1.8 billion.
The statement said the reserves increase “is especially reassuring for our shareholders, as it is likely to have a positive impact on future revenue for the business.”
COP acquisition pays off
Furthermore, it said the quantum leap in reserves now more than justified its July 2014, acquisition of the ConocoPhillips, COP assets in Nigeria, for a whopping $1.5 billion, a transaction many believed was rather ambitious.
But with the increase in reserves, Oando maintained that the acquisition was “a strategically important and timely move.”
It added that “The new reserves figures are based on an annual evaluation report of OER’s reserve and resources conducted by worldwide petroleum independent company, DeGolyer and MacNaughton, D&M.”
, was quoted as sayingd: “We are very pleased with the new 2014 Reserves numbers which confirms our thesis at the time we embarked on our transformative COP acquisition.“This large Reserves base gives us a substantial value driver with the opportunity to further enhance production over the coming years, and pursue in-field exploration prospects that will complement our resource base and ensure we are well positioned within the sector.”
Reaps big from oil crash
In the last 10 months, Oando has evolved from an indigenous player producing about 4,500 boepd from three producing assets to being ranked alongside the international majors with a daily production of 53,000 boepd from seven producing assets.
It was also noted that as a result of the slump in oil prices, 2014 ended on a sour note for the petroleum sector. This downward trend has continued in 2015, with speculations that as much as $1.6 trillion will be wiped out in earnings for producing companies and countries.
This notwithstanding, Oando said it has kept above the fray by proactively acting on a number of initiatives to sustain its viability as an investment grade stock.
Part of the benefit from these is the fact that OER recently reset its hedge from $95 to $65 per barrel, restructured its debt obligations by $238 million thereby making savings of $65 million in interest payments over the remaining term of the loan facilities.
These actions have seen a considerable reduction in its debt, an eradication of significant interest payments and an improvement in its balance sheet.
With the global downturn and energy firms declaring write downs Oando is still uniquely well-positioned and is clearly a sure bet investment.
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