Oando Plc’s share price posted a 9.95 percent gain to reach N84.55 at the close of trading on September 2, reflecting a 1,286 percent gain between September 4, 2023 and September 2, 2024. On September 4, 2023, the stock closed with a share price of N6.10.
Oando’s performance on the Nigerian Exchange Limited (NGX) in 2024 has seen it cross the N1 trillion market capitalisation mark for the first time in history, as it closed on September 2 with a market capitalisation of N1.048 trillion.
“The acquisition of Agip has affected the share price of Oando. Since the announcement was made, their share price has been on full buy, we are rarely seeing any sellers in the market that want to sell Oando,” said Ekene Oyeka, a Securities Dealer with Norrenberger Securities while commenting on the development.
He noted, “The acquisition is expected to solidify Oando’s position in Nigeria’s oil and gas sector and it will have an immediate impact on their cash flow.”
In 2024, Oando Plc has been the second fastest-gaining stock in the NGX, as it has appreciated by 705 percent year-to-date (YtD), having begun the year with a share price of N10.50 and a market cap of N130.2 billion.
Most of Oando’s surge has also been in the second half of the year, as investors’ confidence was heightened by the release of the group’s financial statement for 2022 and 2023. In the first half of 2024, Oando appreciated by 43 percent, however, in H2 2024 thus far, the stock has appreciated by 464 percent.
Adebayo Adebanjo, Senior Analyst at CardinalStone Securities noted, “In terms of 2P reserves, Oando is expected to be bigger than Seplat even with MPNU (Mobil). That’s just oil and gas reserves. In terms of power generation total nameplate capacity, it is also going to be bigger than Transcorp Power and Geregu.”
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Combined with its annual report release, investors were also buoyed by the announced completion of Oando’s acquisition of Nigerian Agip Oil Company (Agip). Since the acquisition was announced on August 22, the stock has appreciated by 94.4 percent since then.
10th most valuable company listed on the NGX
Oando has joined the exclusive list of companies with a market capitalisation above N1 trillion, being the second oil and gas company in the category, the other being Seplat Energy Plc. It is now the 10th most valuable company listed on the bourse, behind Zenith Bank Plc.
With its $783 million acquisition of Agip, Oando has now become the largest indigenous player in Nigeria’s oil and gas sector, as total proven reserves now stand at about 1 billion barrels equivalent of oil, in contrast with Seplat Energy which boasts about 226 million barrels.
Although its market capitalization is still dwarfed by Seplat’s N2.19 trillion, Oando’s revenue in 2023 was about N3.4 trillion, in contrast with Seplat’s N696.9 billion. Also, at the end of FY 2023, the company boasted assets worth N3.14 trillion, as against N3.05 trillion for Seplat.
Oando’s acquisition of Agip will also transfer ownership of two power plants (Kwale-Okpai I & II) with a total nameplate capacity of 960 MW to the company. It will also transfer ownership of 1,490 km of pipelines to Oando.
However, analysts have highlighted some of the that issues still exist with Oando’s books as the group has yet to release its audited financial statements since 2022.
According to the group’s 2023 financial statements, the company’s negative equity had risen to N236.3 billion at the end of 2023. The group also has quite a borrowing problem, as it had a total borrowing of N821.4 billion at the end of FY 2023.
Adebanjo noted, “Oando has not dropped audited financials since 2022, and as of their FY 2023 unaudited numbers, they still have legacy issues like their negative equity from compounded losses over time. Those are just some of the issues but the acquisition fundamentals are very strong.”
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