October 30, 2019 /01:59PM / By NSE / Header Image
Oando Plc (referred to as "Oando" or the "Group"), Nigeria's leading indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, today announced unaudited results for the nine months period ended September 30, 2019.
Commenting on the results Wale Tinubu, Group Chief Executive, Oando Plc said:
"In the period under review, we made substantial progress on our top priority of operational growth and recorded an 8% increase in hydrocarbon production. In conjunction with our partners, we successfully completed an ambitious 6-well drilling program, the results of which have been positive, and are particularly excited about the discovery of a significant gas and condensate find at a field in OML 61 of our Joint Venture. This has had a major impact on our reserves and consequently future cash flows. Production has since commenced in October on the completed wells, and the gas will largely be channelled to feed the nation's power sector through our Joint Venture's Okpai Power plant, Nigeria's first independent power plant. In addition, we achieved an 8% reduction in our debt levels, whilst growing free cash flows. Over the last quarter of the year, our focus will be on the completion of our drilling program as well as "tie-in" of the new discoveries."
Production for the nine months ended 30 September 2019:
During the nine months ended September 30, 2019, production increased by 8% at 43,045boe/day, compared with 40,039boe/day in the same period of 2018. This was driven by an 11% increase in natural gas production (from 120,047mcf/day YTD September 2018 to 133,415mcf/day YTD September 2019) and an 8% increase in crude oil production (from 16,850bbls/day YTD September 2018 to 18,147bbls/day YTD September 2019).
Over the course of the year, we, in conjunction with our JV partners, have aggressively ramped up our drilling program towards increasing oil revenue and meeting our gas obligations. As at September 2019, we have successfully completed a side track at OML 56, shoring up net production by ~1,500bbls/day, whilst also drilling and completing five wells across three rig lines at our joint venture operations on OMLs 60-63.
In September 2019, Oando Plc announced that the NNPC/NAOC/OANDO Joint Venture ("JV") (of which Oando Energy Resources [OER] holds a 20% working interest) had made a significant gas and condensate find in the deeper sequences of the Obiafu-Obrikom fields in OML 61, onshore Niger Delta. Preliminary evaluation indicates that the find amounts to about 1 trillion cubic feet of gas and 60 million barrels of associated condensate in the deep drilled sequences. The well can deliver in excess of 100 million standard cubic feet/day of gas and 3,000 barrels/day of associated condensates. The discovery is part of a drilling campaign planned by the Joint Venture aimed at exploring near-field and deep pool opportunities as immediate time to market opportunities. The JV started gas and condensate production from the Obiafu-41 discovery just 3 weeks after completion and the gas from this discovery will largely be channelled to the domestic market in order to feed the power sector. The full impact of this discovery will be determined and communicated to the market on conclusion of the next annual independent reserves and resources evaluation. Capital expenditure of $84.3 million was incurred in the nine months of 2019 compared to $59.3 million in same period in 2018. This consists of $77.3 million at OMLs 60 to 63, $5.6 million at OML 56, and $1.4 million on other assets.
Traded volumes for the nine months ended 30 September 2019:
In YTD September 2019, Oando Trading traded approximately 9.3 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) and delivered 317,649 MT of refined products.
*Borrowings compares YTD September 2019 against FYE 2018
Profit-After-Tax for the period was N13.1 billion, an increase of 26% compared to the same period in 2018 (N10.4 billion).
Total Group Borrowings for the period stood at N193.1 billion, a 8% decrease from FYE 2018 (N210.9 billion) whilst in our upstream specifically, our borrowings reduced by 13% to $222.0 million compared to $255.6 million in FYE 2018.
Over the last quarter of the year, working with our JV partners, our focus will be on aggressively pursuing the completion of our drilling program at OMLs 60-63 whilst achieving cost optimization on our operations.