Welcome!

News Feed Item

Oando Energy Resources Announces Second Quarter Results

CALGARY, Alberta, August 15, 2014 /PRNewswire/ --


Oando Energy Resources Inc. ("OER" or the "Company") (TSX:OER), a company focused on oil and gas exploration and production in Nigeria, today announced financial and operating results for the six month period ended June 30, 2014. The unaudited financial statements, notes and management's discussion and analysis pertaining to the period are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at http://www.sedar.com and by visiting http://www.oandoenergyresources.com. All monetary figures reported herein are U.S. dollars unless otherwise stated.

Operational Highlights  

  • Production from existing assets for the six months ended June 30, 2014 was 821,786 bbls (an average of 4,540 barrels per day) compared to 687,757 bbls (an average of 3,800 barrels per day) for the comparative period primarily as a result of improved well optimization at OML 125;
  • The average net sales price of $76.18/bbl for the six months ended June 30, 2014 declined by 20.3% from $95.64/bbl in the comparative period;
  • Progressed construction of the 45,000 bbls/d Umugini pipeline, designed as an alternative evacuation route for the OML 56 (Ebendo Field) asset, with a target completion date of Q4, 2014; and
  • Completion of the $1.5 Billion acquisition of ConocoPhillips' Nigeria Business Unit (the COP Acquisition).

Financial Highlights  



                                                     Six Months Ended June 30
    US$'000, except production and per share data    (unless otherwise noted)

                                                            2014         2013

    Revenue                                               62,603       65,774
    Barrels of oil produced (bbl)                        821,786      687,757

    Average sales price per barrel (Gross)                108.79       109.00

    Average sales price per barrel (Net, Including
    unrecognized revenue)                                  91.25        95.64
    Average sales price per barrel (Net)                   76.18        95.64
    Cash flows from operating activities                (11,220)     (22,171)
    Comprehensive income/(loss)                        (177,549)      (8,866)
    Net income/(loss) per share: Basic                    (0.41)       (0.08)
    Net income/(loss) per share: Diluted                  (0.41)       (0.08)
    Total assets                                       1,662,142    1,299,422
    Total non-current Financial liabilities              245,925      275,195

  • The average net sales price of $76.18/bbl for the six months ended June 30, 2014 declined by 20.3% from $95.64/bbl in the comparative period, due to the non-recognition of $13.0 million in revenues related to excessive liftings' by the NNPC at OML 125. If the unrecognised revenues of $13.0 million related to excessive NNPC liftings' at OML 125 was recognized, the net average sales price per barrel would be $91.25 for the six months ended June 30, 2014.
  • Cash outflow from operating activities for the six months ended June 30, 2014 was $11.2 million, compared to $22.2 million in the comparative prior year period.
  • For the six months ended June 30, 2014 revenue declined from the comparative period by $3.2 million. During this period, lower realized net sales prices reduced revenues by $13.4 million and increased production increased revenues by $10.2 million. Lower revenues from lower realized net sales prices were primarily due to $13.0 million in unrecognized revenue at OML 125. Increases in production were due primarily to increased production at OML 125 and the Ebendo Field (OML 56). OML 125 production increased by 17% to 651,000 bbls in the six months ended June 30, 2014 from 557,000 bbls in the comparative period. The Ebendo Field (OML 56) production increased by 30% to 171,000 bbls in the six months ended June 30, 2014 from 131,000 bbls in the comparative period.
  • The $177.5 million loss is attributed to the following:
    • Fair value loss on financial instruments of $106.9 million in the quarter driven primarily by warrants and equity conversion rights held by Oando PLC, these losses were recognised due to the large swing in OER's share price from CA$ 1.31 per share on 31st March, 2014 to CA$ 1.90 per share on 30 June, 2014 and PLC's right to convert at CA$ 1.57 per share;
    • $30.7 million financing fee due to Oando PLC, which was recognised as a finance expense for the six months period;
    • Non-recurring G&A cost of $27.3 million due to the COP acquisition; and
    • Unrecognized revenue of $13.0 million from production at OML 125 related to excessive liftings' by the NNPC.
  • Capital expenditures for the six months ended June 30, 2014 were $66.9 million, compared to $44.7 million for comparative period.

Subsequent Events 

On July 30, 2014, the Corporation completed the acquisition of ConocoPhillips Nigerian business unit, with an effective date of January 1, 2012. The final purchase consideration for the Acquisition transferred on July 30, 2014, net of working capital adjustments, transaction costs, purchase price adjustments was $1.5 Billion. The total reserves and resources associated with this transaction are; Proved plus Probable Reserves of 211.6 million barrels oil equivalent ("MMboe"); Best Estimate Contingent Resources of 498.6 MMboe; Unrisked Best Prospective Resources of 656.9 MMboe.

"This half year we have witnessed a 20% growth in production against last year, due to optimization processes on our current producing assets". said CEO, Pade Durotoye, "we are truly excited at the 9 fold ramp up in production that we are experiencing in H2, 2014 as well as a much larger corporation, as a result of our completion of the acquisition of the ConocoPhillips Nigeria business unit, our immediate outlook will be to integrate the systems, processes and people towards growing the business and creating true value for our shareholders".

Selected Quarterly Results 


                                            For the three months ended
    (US$ '000, except                June 30  March 31 December 31  September 30
    [production and] per share
    data)                               2014      2014        2013          2013

    Production (bbls)                413,985   407,802     406,029       363,032
    Total Revenue                     30,440    32,163      23,976        37,461
    Net Income for the Period      (137,668)  (39,881)    (41,008)        11,645
    Earnings Per Share                (0.24)    (0.14)      (0.32)          0.12
    Diluted Earnings Per Share        (0.24)    (0.14)      (0.32)          0.12
    Capital Expenditures              24,355    42,550      45,573        29,684
    Total Assets                   1,662,142 1,689,937   1,299,422     1,223,808
    Total Non-Current
    Liabilities                      245,925   274,812     275,195       206,150

OPERATIONAL UPDATE 

OML 125 (Abo Field) 

Budgeted capital expenditures for OML 125 for the six months ended June 30, 2014 was $26.6 million. The Corporation incurred expenditures of $40.7 million during the first six months of the year on Abo 8 and Abo 12 drilling and completion activities, FPSO revamp and Abo 3 flow line de-sanding.

Abo 8 re-entry and completion was budgeted at $9.1 million with actual expenditure incurred to date being $5.8 million with remedial works still ongoing to put the well back on stream. Abo 12 drilling and completion was budgeted at $12.9 million for the first half of the year. Actual expenditure to date of $20 million has been incurred. The increase in expenditure was as a result of a delay in completion costs. The well is temporarily plugged pending planned hook up in 2015.

Abo 3 flow line de-sanding costs of $5.5 million was incurred during the first six months of the year but was not budgeted for in 2014. This expenditure was incurred as a result of plugged flow lines from sand production. Remedial works are ongoing to put well back on stream.

FPSO revamp activities were planned for the fourth quarter of 2014 at a budget of $4.5 million. However, this expenditure was incurred during the first six months of the year at a cost of $5.6 million.

OML 56 (Ebendo Field) 

Budgeted capital expenditures for OML 56 for the six months ended June 30, 2014 was $11 million. The Corporation spent $9.2 on Umugini pipeline construction and Ebendo Well 7 drilling and completion activities and flow station de-bottlenecking.

The Umugini pipeline project over the course of the year has achieved completion milestones around fiber optic cable laying and pipeline works and projected delivery date remain to be completed during the fourth quarter of 2014. Ebedo Well 7 was successfully drilled and completed on the 1st of April 2014. The well has since been shut in pending completion of Umugini pipeline. The Akri-Kwale flow lines were also de-bottlenecked during the first six months of the year to increase crude production capacity for the field. The cost of de-bottlenecking was $1.1 million.

OML 13 (Qua Ibo Field) 

Budgeted capital expenditures for OML 13 - Qua Ibo field were set at $40.6 million for 2014. In the six months ended June 30, 2014, the Corporation incurred capital expenditures of about $9.4 million on pipeline and facility costs as well as flow station construction. Oil production from the Qua Ibo field's D5 reservoir is expected to commence in the fourth quarter of 2014 after the commissioning of a crude processing facility which is currently under construction and should be finalized in the third quarter of 2014. Production from the C4 reservoir of the Qua Ibo is expected to commence in the first quarter of 2015.

OML 134 (Oberan Field)  

Budgeted capital expenditures for OML 134 were set at $7.4 million for 2014. In the six months ended June 30, 2014, the Corporation paid $7 million of the costs incurred on exploratory activities related to the Mindiogboro prospect. Based on results from the drilling of the exploration well into the Mindiogboro prospect, the Corporation plans to continue geological, geophysical, and environmental studies in 2015.

OML 90 (Akepo Field) and Blocks 5 & 12, EEZ of São Tomé & Príncipe 

Budgeted capital expenditures for OML 90 and Block 5 and 12, EEZ of Sao Tome & Principe were set at $2.0 million and $5.2 million, respectively, for 2014. No significant capital expenditures were incurred in these fields in the six months ended June 30, 2014. For OML 90, planned capital expenditures to develop an evacuation route for crude production remain. For Blocks 5 & 12, planned capital expenditures related to a four year work programme of 2D and 3D seismic acquisition and studies remains.

About Oando Energy Resources Inc. (OER) 

OER currently has a broad suite of producing, development and exploration assets in the Gulf of Guinea (predominantly in Nigeria). OER's sales production was 41,071 boe/d in 2013 and 44,512 boe/d in the first half of 2014.

Reserves and resources attributable to OER as of July 31, 2014 include Proved plus Probable reserves of 230.6 MMboe, Best Estimate Contingent Resources of 547.3 MMboe and Risked Best Prospective Resources of 525.2 MMboe.

OER has been specifically structured to take advantage of current opportunities for indigenous companies in Nigeria, which currently has the largest population in Africa, and one of the largest oil and gas resources in Africa.

Cautionary Statements 

Oil and Gas Equivalents 

Production information is commonly reported in units of barrel of oil equivalent ("boe" or "Mboe" or "MMboe") or in units of natural gas equivalent ("Mcfe" or "MMcfe" or Bcfe"). However, boe's or Mcfe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf = 1 barrel, or a Mcfe conversion ratio of 1 barrel = 6 Mcf, is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Readers are cautioned that boe may be misleading, particularly if used in isolation.

Forward Looking Statements: 

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, this news release contains forward-looking statements relating to intended acquisitions.

Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that such statements and information will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.

Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: risks related to international operations, the integration of assets acquired under the COP acquisition, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined and the future price of crude oil. Accordingly, readers should not place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive.

Additional information on these and other factors that could affect the Company's financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (http://www.sedar.com) under the Company. The forward-looking statements and information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

SOURCE: Oando Energy Resources Inc.

For further information:

Contact Information:
Pade Durotoye, CEO
Oando Energy Resources Inc.
[email protected]
+1-403-561-1713

Tokunboh Akindele
Head Investor Relations
Oando Energy Resources Inc.
[email protected]
+1-403-560-7450

David Feick
Investor Relations
+1-403-218-2839
[email protected]

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
TechTarget storage websites are the best online information resource for news, tips and expert advice for the storage, backup and disaster recovery markets. By creating abundant, high-quality editorial content across more than 140 highly targeted technology-specific websites, TechTarget attracts and nurtures communities of technology buyers researching their companies' information technology needs. By understanding these buyers' content consumption behaviors, TechTarget creates the purchase inte...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), will provide an overview of various initiatives to certifiy the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldw...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
VeriStor Systems has announced that CRN has named VeriStor to its 2017 Managed Service Provider (MSP) 500 list in the Elite 150 category. This annual list recognizes North American solution providers with cutting-edge approaches to delivering managed services. Their offerings help companies navigate the complex and ever-changing landscape of IT, improve operational efficiencies, and maximize their return on IT investments. In today’s fast-paced business environments, MSPs play an important role...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...