CALGARY, May 16, 2014 /CNW/ - Oando Energy Resources Inc. ("OER" or the "Company") (TSX:OER), a company focused on oil and gas exploration and production in
Nigeria, today announced financial and operating results for the
quarter ended March 31, 2014. The unaudited financial statements, notes
and management's discussion and analysis pertaining to the period are
available on the System for Electronic Document Analysis and Retrieval
("SEDAR") at www.sedar.com and by visiting www.oandoenergyresources.com. All monetary figures reported herein are U.S. dollars unless otherwise
OER is in the final stages of acquiring ConocoPhillips' Nigerian
upstream oil and gas business (the "COP Acquisition");
It is expected that the Proposed Acquisition will position OER as one of
the leading E&P players in Nigeria, as measured by total reserves and
OER believes that the COP Acquisition represents a "game changing"
opportunity for OER and its shareholders, adding:
a 20% working interest in the NAOC JV, which includes forty-one
discovered oil and gas fields with remaining oil and gas recovery,
approximately forty identified prospects and leads, twelve production
stations, approximately 1,490 km of crude oil, natural gas liquids and
natural gas pipelines, three gas processing plants, the Brass River Oil
Terminal, the Kwale-Okpai 480 MW combined cycle gas-fired power plant,
and associated infrastructure;
approximately 36,000 barrels of oil equivalent per day ("boe/d") based on average production between January and December 2013,
according to ConocoPhillips;
approximately 211 millions of barrels of oil equivalent ("MMboe") of Proved plus Probable Reserves, 484 MMboe of Best Estimate Economic
Contingent Resources, and approximately 239 MMboe of Risked Prospective
Resources, according to a report dated 31st December, 2013, prepared by OER's independent resource and reserve
auditors, Petrenel (The Petroleum and Renewable Energy Company
Limited). Contingencies and significant negative and positive factors
related to the Contingent Resources are further described below.
the Proposed Acquisition is expected to be financed with already secured
debt and equity;
POCNL is cash generative and is expected to contribute positively to the
cashflow of the Company;
the Proposed Acquisition is anticipated to close during the first half
of 2014, to enable the companies to satisfy all closing conditions
including the anticipated consent of the Honourable Minister of
Petroleum Resources in Nigeria.
In February 2014, OER completed a $50 million private placement offering
and issued 35,070,063 common shares and 17,535,032 common shares
purchase warrant at a price of C$1.57 per unit. Each whole warrant
entitles the holder to acquire one common share of the Group at a price
of C$2.00 per common share for a period of 24 months from the closing
of the COP Acquisition;
In February 2014, OER converted certain amounts outstanding under the
Oando PLC ($601 million in principal and accrued interest of $11.7
million) into equity, resulting in the issuance of 432,565,768 common
shares in OER and 216,282,884 common shares purchase warrants with
identical terms to the $50 million private placement; and
Entered into an amendment agreement with ConocoPhillips (NYSE: COP) to extend the long stop date for completion of the COP Acquisition to
June 30, 2014.
4,531 bbl/d average oil production for the quarter ended March 31, 2014.
This represented a 22% increase over the same period last year. The
increase in production was a result of reduced shut-in periods on OML
56 (Ebendo Field) resulting in a 110% production increase over same
period in 2013;
Average gross sales price realized per barrel of oil produced was
$111.40 for the quarter ended March 31, 2014 compared to $114.00 for
the same period in 2013;
Progressed construction of the 45,000 bbls/d Umuginni pipeline, designed
as an alternative evacuation route for the OML 56 (Ebendo Field) asset,
with a target completion date of H2, 2014; and
$42.6 million in capital expenditures for the quarter ended March 31,
2014 compared to $8.3 million for comparative prior year period. The
majority of these expenditures was on drilling and completion
$32.2 million in revenue for the quarter ended March 31, 2014. This
represented a 5% increase from the same period last year;
$(32.9) million in net income for the quarter ended March 31, 2014. The
net loss was as primarily as a result of financing expenses relating
to the COP Acquisition;
$10.3 million in cash flow from operating activities, compared to cash
outflow of $18.0 million from the same period last year;
$300.6 million in cash and cash equivalents for the quarter ended March
31, 2014; and
$354.3 million in borrowings as at March 31, 2014, comprising of
convertible loans and acquisition loans to the tune of $233.3 million
and operational loans of $121.0 million.
"Our first quarter was highlighted by positive operational results that
saw us increase our year on year oil production by 22%," said OER CEO,
Pade Durotoye. "This increase in quarterly production from the Ebendo
Field was as a result of a higher production uptime experienced due to
reduced shut-in's on the Agip trunkline evacuation route".
Selected Quarterly Results
For the three months ended
(US$ '000, except production and per share data)
Net Income for the Year
Earnings Per Share
Diluted Earnings Per Share
Total Non-Current Liabilities
OML 125 (Abo Field)
Budgeted capital expenditures for OML 125 were set at $37.5 million for
2014. In the three months ended March 31, 2014, OER incurred $26.0
million on Abo 8 re-entering and completions and Abo 12 drilling
activities. Production from Abo-8 has not commenced as the required
flow line is a long lead item, delivery of which is expected to be in
the third quarter of 2014; the budgeted expenditure for the flow line
is $5.1 million. Abo-12 well has been temporarily plugged after lower
completion work was performed with tie-in planned for 2015.
OML 56 (Ebendo Field)
Budgeted capital expenditures for OML 56 were set at $22.7 million for
2014. In the three months ended March 31, 2014, OER incurred $3.5
million on the drilling and ongoing completion works on Ebendo Well 7.
This well, in addition to Ebendo 5 and Ebendo 6 (both completed wells),
have been suspended pending the completion of the Umuginni pipeline.
OML 13 (Qua Ibo Field)
Budgeted capital expenditures for OML 13 - Qua Ibo Field were set at
$40.6 million for 2014. In the three months ended March 31, 2014, OER
incurred capital expenditures of $6.0 million on pipeline and facility
costs as well as flow station construction. Oil production from the Qua
Ibo field's is expected to commence in the fourth quarter of 2014 after
the commissioning of the OER/Network Exploration and Production crude
oil processing facility which is currently under construction and
should be completed in the third quarter of 2014. Production is
expected to commence in the first quarter of 2015.
OML 134 (Oberan Field)
Budgeted capital expenditures for OML 134 were set at $7.4 million for
2014. In the three months ended March 31, 2014, OER incurred $6.8
million on exploratory activities related to the Mindiogboro prospect.
Based on results from the drilling of the exploration well into the
Minidiogboro prospect (suspended as a gas discovery), OER plans to
continue geological, geophysical, and environmental studies.
About Oando Energy Resources Inc. (OER)
OER currently has a broad suite of producing, development and
exploration properties in the Gulf of Guinea (predominantly in Nigeria)
with current production of approximately 4,531 barrels of oil per day.
OER has been specifically structured to take advantage of current
opportunities for indigenous companies in Nigeria, which currently has
the largest population in Africa, and one of the largest oil and gas
resources in Africa.
See the Company's Form 51-101F1 filed under the Company's profile on
SEDAR at www.sedar.com on April 1, 2013.
Oil and Gas Equivalents
Production information is commonly reported in units of barrel of oil
equivalent ("boe" or "Mboe" or "MMboe") or in units of natural gas
equivalent ("Mcfe" or "MMcfe" or Bcfe"). However, boe's or Mcfe's may
be misleading, particularly if used in isolation. A boe conversion
ratio of 6 Mcf = 1 barrel, or a Mcfe conversion ratio of 1 barrel = 6
Mcf, is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency
at the wellhead. Readers are cautioned that boe may be misleading,
particularly if used in isolation.
Forward Looking Statements:
This news release contains forward-looking statements and
forward-looking information within the meaning of applicable securities
laws. The use of any of the words "expect", "anticipate", "continue",
"estimate", "objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends" and similar expressions are intended to
identify forward-looking information or statements. In particular,
this news release contains forward-looking statements relating to
Although the Company believes that the expectations and assumptions on
which such forward-looking statements and information are reasonable,
undue reliance should not be placed on the forward-looking statements
and information because the Company can give no assurance that such
statements and information will prove to be correct. Since
forward-looking statements and information address future events and
conditions, by their very nature they involve inherent risks and
Actual results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to: risks related to international operations, the actual
results of current exploration and drilling activities, changes in
project parameters as plans continue to be refined and the future price
of crude oil. Accordingly, readers should not place undue reliance on
the forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect the
Company's financial results are included in reports on file with
applicable securities regulatory authorities and may be accessed
through the SEDAR website (www.sedar.com) for the Company. The forward-looking statements and information
contained in this news release are made as of the date hereof and the
Company undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE: Oando Energy Resources Inc.
For further information:
Pade Durotoye, CEO
Oando Energy Resources Inc.
Head Investor Relations
Oando Energy Resources Inc.
Jeremy Dietz/David Feick