Oando Completes $1.5bn Acquisition Of Conocophillips

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Oando Energy Resources Inc. (OER), a company focused on oil and gas exploration and production in Nigeria, has announced the completion of its acquisition of the Nigerian upstream oil and gas business of ConocoPhillips (NYSE: COP) for a total cash consideration of $1.5 billion after customary adjustments plus a deferred consideration of $33 million (the transaction). The transaction entails the acquisition of ConocoPhillips’ Nigerian oil and gas businesses consisting of both onshore and offshore business activities.

A press release by OER said Phillips Oil Company Nigeria Limited (POCNL) holds a 20 per cent non-operating interest in Oil Mining Leases (“OMLs”) 60, 61, 62, and 63 as well as related infrastructure and facilities in the Nigerian Agip Oil Company Limited (NAOC) joint venture (NAOC JV). The other co-venture partners are the Nigerian National Petroleum Corporation (NNPC) with a 60 per cent interest and NAOC (20 per cent and operator).

Also included in the transaction are Conoco Exploration and Production Nigeria Limited (CEPNL) that holds a 95 per cent operating interest in OML 131 located 70 km offshore in water depths of 500m to 1,200m and Phillips Deepwater Exploration Nigeria Limited (PDENL) that holds a 20 per cent non-operating interest in Oil Prospecting Licence (OPL) 214 located 110 km offshore in water depths of 800m to 1,800m. The other co-venture partners are ExxonMobil (20 percent and operator), Chevron (20 per cent), Svenska (20 per cent), Nigerian Petroleum Development Company (15 per cent) and Sasol (5 per cent). In June 2014, Nigeria’s petroleum resources minister approved the conversion of OPL 214 to OML 145 for an initial period of 20 years.

Through this transaction, OER will indirectly own all of the issued share capital of POCNL, CEPNL and PDENL. The effective date of the transaction is January 1, 2012. In connection with this transaction, OER retained the Petroleum and Renewable Energy Company Limited (Petrenel) as Independent Reserves Evaluator to report on the reserves and resources of the newly acquired assets, OMLs 60, 61, 62 and 63 (together, the “Onshore).

Commenting on the transaction, an elated OER’s CEO, Pade Durotoye, said: “This transaction represents a transformational leap forward for our company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets by focusing on those opportunities that deliver high-quality growth in reserves and production. He added: “Our management team is familiar with these assets and possesses the managerial experience and technical expertise necessary to unlock their value for our shareholders.” Also commenting, chairman of OER Mr Wale Tinubu said “we believe in the significant potential that the Nigerian oil and gas industry holds and are privileged to play a pivotal role in its consolidation, growth and development. We will continue to seek strategic opportunities that provide a platform for enhanced growth and value creation for our stakeholders”.

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