Nigerian Oil Company Oando to Acquire Conoco Phillips Nigerian Business for $1.79 Billion

Oando buys Conoco Phillips

AFRICANGLOBE – Nigeria’s leading indigenous energy group, Oando PLC, has announced its affiliate Oando Energy Resources (OER), which is listed on the Toronto bourse (TSX), has entered into agreements with Conoco Phillips (COP) to acquire its entire business interests in Nigeria for an estimated cash of $1.79 billion including customary adjustments.

The agreement entails the purchase of 2 onshore businesses and 2 offshore operations which includes Conoco Exploration and Production, which holds a 95 percent operating interest in OML 131.

The Proposed Acquisition by Oando which is listed on both the Nigerian Stock Exchange and the JSE Limited, represents a significant opportunity for OER and its shareholders with the addition of a significant share of six separate discovered fields and eight separate prospects in two offshore blocks, approximately 43,000 barrels of oil equivalent per day (boe/d), and a total of approximately 213 millions of barrels of oil equivalent (MMboe) of Proved plus Probable Reserves.

Commenting on the investment, Mr. Pade Durotoye, CEO of Oando Energy Resources said: “This potential transaction represents a transformational step 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.”

Mr. Wale Tinubu, Group Chief Executive of Oando, also said he expects the closing of the deal would be a “transformational transaction for OER,” as the company has only been on the TSX for five months.

The Proposed Acquisition is anticipated to close during the first half of 2013, following appropriate consultations with stakeholders.

NAOC JV, one of the onshore business joint ventures to be acquired by OER through the deal, has yielded high drilling success rates, high production volumes and premium pricing on crude oil and natural gas and NGLs. For the year ended December 31, 2011, ConocoPhillips reported revenue of $1.0 billion, profit after tax of $157.5 million and cashflow from operations of $327.1 million.

Oando Energy Resources (OER) currently has a broad suite of producing, development and exploration assets in the Gulf of Guinea (predominantly in Nigeria) with current production of approximately 3,300 barrels of oil per day from the Abo Field, (OML 125) and an additional 1,500 barrels of oil per day from the Ebendo Field, (OML 56). 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.