Oando reaps big in oil downturn | Independent Newspapers Limited
Newsletter subscribe


Oando reaps big in oil downturn

Posted: Apr 15, 2015 at 10:35 am   /   by   /   comments (0)

By Sola Alabadan

News Editor (Sunday)


Oando Energy Resources (OER), a leading E&P player in the Nigerian Oil and Gas sector has once again demonstrated its superior strategy despite the downturn in the sector.  The company’s recent announcement of an 82% increase in reserves is especially reassuring for its shareholders as it is likely to have a positive impact on future revenue for the business.

As a result of the slump in oil prices, 2014 ended on a sour note for the sector, this downward trend has continued in 2015 with speculations indicating that as much as $1.6 trillion will be wiped out in earnings for producing companies and countries.  With such a pessimistic view Oando has kept above the fray by proactively acting on a number of initiatives to sustain its viability as an investment grade stock.

Most recently OER significantly increased its Proved and Probable net reserves (2P) reserves from 230.6 MMboe to 420.3 MMboe.  The new reserves figures are based on an annual evaluation report of OER’s reserve and resources conducted by worldwide petroleum independent company DeGolyer and MacNaughton (D&M), and it also indicated the economic value of the company’s Proved and Probable Reserves (2P) has increased from $545 million to $1.8 billion.  This reserves increase is further validation that Oando’s $1.5 billion landmark acquisition of ConocoPhillips Nigeria assets in July 2014 was indeed a strategically important and timely move.

Commenting on this most recent milestone, Chief Executive Officer OER, Pade Durotoye, said “We are very pleased with the new 2014 Reserves numbers which confirms our thesis at the time we embarked on our transformative COP acquisition. This large Reserves base gives us a substantial value driver, with the opportunity to further enhance production over the coming years, and pursue in-field exploration prospects that will complement our Resource Base and ensure we are well positioned within the sector.”