Oando Set to Acquire 40% Participating Interest in the Qua Iboe oilfield (OML 13)

Oando Set to Acquire 40% Participating Interest in the Qua Iboe oilfield (OML 13)

•Signs a Farm-in Agreement with Network Exploration & Production Nigeria Limited for the acquisition of a 40% participating interest in the Qua Iboe field (OML 13)
•Competent Person Reserves estimate of 11.3 mmbbl (2P reserves)
•Oando designated Technical and Financial Services partner
Lagos, Nigeria: Oando Exploration and Production Limited (“OEPL”), a subsidiary of Oando PLC with 13 exploration and production assets, is pleased to announce that it has signed a farm-in agreement with Network Exploration & Production Nigeria Limited (“NEPN”) for the acquisition of 40% participating interest in the Qua Iboe field (OML 13) subject to the consent of the Honourable Minister of Petroleum.

OEPL and NEPN signed all agreements relating to the transaction on the 2nd of February 2012 and have subsequently filed an application with the Department of Petroleum Resources (“DPR”) for the consent of the Honourable Minister of Petroleum Resources. Upon the Minister’s approval, OEPL would have acquired a 40% participating interest in the Qua-Iboe field (OML 13) and will be designated the Financial and Technical Services Partner, delegated to perform some of the Technical and Project Management duties and obligations of the Operator in the development of the Qua Iboe field.

The field, which is in Shell Petroleum Development Company of Nigeria (SPDC) OML 13 was awarded to NEPN as part of the 2003 Marginal Field Round. Located onshore near the mouth of the Qua Iboe River in Akwa Ibom state, the acreage is about 2 kilometers from Mobil Producing Nigeria (MPN) Qua Iboe Terminal.

Commenting on the acquisition, Pade Durotoye, Chief Executive Officer, OEPL states; “This asset is estimated to contain 11.3 mmbbl of 2P reserve, which immediately increases our reserve base by about 50%. We are excited that the post-drilling mapping along with new seismic interpretation supports technical and economic producibility of the asset. Our selection as the technical partner further underscores our world class asset development and project delivery capabilities”.

Also commenting, Wale Tinubu, Group Chief Executive, Oando PLC said: “This strategic acquisition is consistent with our aspiration to expand our E&P portfolio with a balanced mix of producing or near term assets and organic growth. The Qua Iboe field will be the third Marginal Field with pre-existing Proven Undeveloped Reserves in Oando’s portfolio. Subject to all regulatory approvals, our immediate objective is to fast-track the development programme towards achieving early production thereby enhancing stakeholder value.”

Asset Details

Three wells, Qua Iboe – 1, Qua Iboe – 2 and Qua Iboe – 3 have been drilled in the field. Qua Ibo – 1 well, drilled by SPDC in 1960, was plugged and abandoned after inconclusive tests. The subsequent appraisal well Qua Iboe – 2, in 1971 found oil in 6 horizons and gas in 5 zones at depths of 3310 to 7100 ft. Qua Iboe – 2 well, is currently suspended. The drilling of Qua Iboe – 3 Appraisal well began in the 4th quarter of 2008 and was completed on 16th January 2009 when the well was suspended.

The primary objective of the Qua Iboe – 3 appraisal well was to determine whether oil seen in the deeper D 5.0 zone in wells Qua Iboe – 1 & 2 was from one continuous pool linking both wells. The appraisal confirmed that the D 5.0 zone is compartmentalised by a fault and that both wells are in separate independent fault blocks. Drilling results showed that the 2 – D seismic data used for mapping were good because the depths of most zones encountered agreed with the pre-drilling predicted depths.

Post-drilling mapping using the prior drilling results along with some reprocessed Seismic suggests the potential of the deeper D 5.0 major zone to be more extensive southwards thereby increasing its oil-in-place and reserves.

In March 2011, Netherland and Sewell Associates Inc. (NSAI), a foremost oil and gas reserves certification company, completed a reserves certification study on the Qua-Iboe field.

For More information, please contact:

Meka Olowola

Head, Corporate Communications

Oando PLC

2, Ajose Adeogun Street,
Victoria Island,
Lagos, Nigeria.

DL: 01-2805593
molowola@oandoplc.com

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