Oando PLC Announces FYE 2013 Results, Posts N1.4bn Profit-After-Tax
Oando PLC (referred to as “Oando” or the “Group”), Nigeria’s leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, today announced audited results for the twelve months period ended 31December, 2013, with the following highlights:
Turnover decreased by 31%, N449.8 billion compared to N650.6 billion (2012)
Gross Profit decreased by 15%, N59.3 billion compared to N69.9billion (2012)
Profit-Before-Tax decreased by 95%, N713.0 million compared to N14.2 billion (2012)
Profit-After-Tax decreased by 87%, N1.4billion compared to N10.8 billion (2012)
OversubscribedN54.6 billion Rights Issue Capital Raise
Completed 5 drilling campaigns in Abo and Ebendo fields
Delivery of 4th swamp drilling rig, with anticipated daily revenues above $100,000
Commissioning of 2nd Independent Power Plant (IPP), 10.4MW IPPin Ikeja, Lagos
Successful completion of Single Point Mooring Jetty in Apapa, Lagos
Commenting, Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: “2013 was a sacrificial year for our company as a significant burden of the cost of transiting to the higher margin Upstream business was borne, as it provided the necessary foundation. The completion of the acquisition of ConocoPhillips entire Nigerian Business in 2014, has seen a tenfold increase in our upstream activity and contribution to the nation’s oil and gas production as well as positioning us as a leading indigenous Upstream player. Profitability in the FYE 2013 results, was heavily impacted byfinancing obligations, as we did not benefit from the upside of the production and cash flows, whilst awaiting regulatory approval. We look forward to a very rewarding 2014 as our strategy of building a leading indigenous upstream company is now our reality and our next challenge is too work diligently towards extracting maximum value for our shareholders”.
In the Upstream, OER has made significant progress in organic development during the course of the year with completed drilling campaigns for wells 9, 4 ST and 8 in the Abo field, and wells 5 and 6 in the Ebendo field (OML 56). Production from the Abo field within OML 125 averaged 3,321 bbl/d light oil (net Working Interest) in 2013 as we drilled 3 wells to maintain production levels; whilst production at the Ebendo Field averaged at 679 bbl/d, representing a 54% increase in production over 2012 due to additional well capacity and the optimization of crude storage and injection.
Significant progress was made in the construction of an alternative 45,000bbls/d, 51km evacuation pipeline which will provide an alternative route for crude transport from the Ebendo Field, through the Trans Forcados export pipeline; completion is expected in Q4, 2014. With the two additional wells drilled on the Ebendo field, we grew our oil production capacity within OML 56 to 7,140bbl/d (3,213 bbl/d OER Share). Export is currently constrained at 3,093 bbbl/d (1,391.85 bbl/d OER share) via the Agip operated Kwale-Brass NAOC/JV infrastructure;however, this does not pose a threat as the construction of our alternative Umugini pipeline will resolve the constraint. We continue to make substantial progress in bringing the Akepo field (OML 90) and Qua Ibo field (OML 13) to first oil.
OES took delivery of its’ fourth swamp drilling rig, Respect, in Q4 2013, which is expected to commence a $100,000 day rate contract with an IOC. The Integrity rig celebrated 4 years without Lost Time to Injury (LTI), signifying our commitment to world class operating standards, with the proactive use of our EHSSQ and operational processes.
In the midstream, we commissioned the Alausa Independent Power Plant in Q4 2013, thus growing our power generation capacity by 10.4MW. We also commissioned a 5 mmscf/day Compressed Natural Gas facility in Lagos which enables us to reach commercial and industrial customers outside our existing pipeline network. Similarly, we’ve commenced execution of our Greater Lagos pipeline expansion project, which will enable customers along Ijora and Marina axis have access to pipeline gas; this pipeline expansion will increase the pipeline’s overall capacity by 30mmscf/day. We successfully divested our 128Km EHGC pipeline in line with our strategy to maximize value from our assets. The proceeds of the sale have been re-invested into the business for growth in other identified value creating areas.
As downstream players continue to battle delayed subsidy payments from the Federal Government, we are being proactive in creating value as we explore efficient channels to increase our margins and add value to the sector, with the completion of our single point mooring jetty in the Apapaport, a first of its kind in Africa. This will contribute to cost savings as a result of a deeper berth to accommodate larger vessels, increased throughput capacity, which will increaseefficiency as well as toll charges from external parties. We have also increased our product diversity and expanse across geographies, with operations and supplies into new markets countries and continents.