Oando plc, an indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchanges, has announced a 2016 profit after tax (PAT) of N3.5 billion, an increase of 107 percent over losses of N47.6 billion recorded in 2015 financial year.
Against odds, including the volatility in oil prices and militancy in the Niger Delta, Oando raised turnover by 49 percent to N569 billion compared with N382 billion realised in 2015 financial year.
“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,” says Wale Tinubu, group chief executive, Oando, on factors responsible for the performance.
He further 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.”
Tinubu said the company’s midstream saw a conclusion of the partial divestment of Oando Gas and Power (OGP) to Helios Investment Partners to further expand its gas footprint.
“In the downstream, our trading business continued to make in-roads in crude lifting. As we enter a new phase in our business evolution we are optimistic about 2017 and look forward to even more successes having braved the challenges of 2016.”
2016 was a difficult year for upstream operators in Nigeria as militancy saw Nigeria’s output fall to less than 1million barrels in the first quarter of the year.
This accounted for Oando Energy Resources 20% decrease in total production to 15.9MMboe (average 43,503 boe/day) from 19.9MMboe (average 54,520 boe/day) in comparative period of 2015.
The company could keep heads above water because approximately 46% of crude production 9,590 bbls/day was hedged at $65/bbl (average) with expiry dates ranging from July 2017 to January 2019.
Oando was able to conclude the sale of its interests in OMLs 125 and 134 to the Operators for cash proceeds of $5.5m and assumption of $88.5m in cash call liabilities due to the joint ventures and cut debt net debt by 35% N230.6 billion compared to N355.4 billion in 2015
In the downstream, Oando Trading executed significant joint venture trading opportunities with ENI and Cepsa, positively impacting revenues of $1.4 billion, a 4 year high for the business.
