23 June 2014, Lagos – The share price of Oando Plc went up by about 52 per cent last week as investors reacted positively to the ministerial consent the company received for the acquisition of ConocoPhillips (COP) Nigerian assets.
Oando’s share price rose from N20 to close at N30.37 per share.
Oando, through its subsidiary, Oando Energy Resources(OER), had begun the process of acquiring the ConocoPhillips’ assets for $1.65 billion but the minister’s consent has been delaying the conclusion of the deal.
However, the minister finally gave her consent last Wednesday.
The ministerial consent is the mandatory final approval for all oil and gas acquisitions in the country as stipulated under the Petroleum Act of 1969.
This development attracted more demand for Oando’s shares, which led to a gain of 52 per cent in one week.
Commenting, on the development, Group Chief Executive Officer of Oando Plc, Mr. Wale Tinubu, said: “We are delighted to receive the approval of the Honourable Minister of Petroleum Resources for the completion of the acquisition.
“It has been a long journey, wherein we kept faith with our strategy and executed every milestone diligently. This acquisition satisfies our criteria for assets in production, as well as excellent appraisal and exploration prospects. The coast now stands clear for us to immediately complete the acquisition.”
Oando said with the due completion of the game-changing acquisition, it will be positioned as the largest indigenous oil producer in Nigeria.
The company said in a statement that it would now produce 50,000 barrels of oil equivalent per day from six producing fields and would also significantly impact its near immediate upstream strategy and operations, and optimise its value across the energy chain.
The company had, before now, said it would increase its pre-tax profit to over N100 billion due to increased production via acquisition of COP Nigerian business.
According to the company said post-acquisition, Oando’s Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) will rise from the current annual average of N45 billion to N100 billion.
– This Day