Oando targets 100,000bpd oil production in 5 years

Oando Plc is looking to achieve 100,000 barrels per day (bpd) of oil production over the next five years, buoyed by the recent acquisition of the Nigerian upstream oil and gas assets of United States-based ConocoPhillips by its upstream business, Oando Energy Resources (OER).

The company is also poised to acquire more onshore and shallow water assets from international oil companies (IOCs) operating in the country.

The ConocoPhillips’ acquisition saw Oando emerge as one of the leading indigenous independent exploration and production (E&P) players in Nigeria, as measured by total reserves and production. The company’s oil production jumped from about 5,000 bpd to 50,000 bpd.

“I think we will achieve that over the next five years,” Wale Tinubu, group chief executive officer, Oando Plc, said in a video interview on Business News Network.

“We expect to increase our organic production by 25,000 barrels over that timeframe from our existing portfolio as well as from the acquired portfolio through the ConocoPhillips’ units and we know that there will be more acquisition opportunities.

“We were able to buy the reserve base at an average price of $5 per barrel on a 2P basis. And in an international market that is trading for West African barrel on the stock exchange around the $12 per barrel mark is a significant upside for investors as well as for us as a management team in terms of being able to extrapolate value.

“We are in talks with the majors towards looking for opportunity on the onshore and the shallow water in Nigeria to purchase good reserves bases from them”, Tinubu said.

On July 30, 2014, OER completed the acquisition of ConocoPhillips Nigerian business unit. The final purchase consideration for the acquisition transferred on July 30, 2014, net of working capital adjustments, transaction costs, purchase price adjustments was $1.5 billion. The total reserves and resources associated with this transaction are proved plus probable reserves of 211.6 million barrels oil equivalent (MMboe); best estimate contingent resources of 498.6 MMboe; unrisked best prospective resources of 656.9 MMboe