This Day (Lagos)

22 December 2012

Nigeria: Oando to Acquire Conocophillips' Nigerian Assets for $1.79 Billion

Nigerian indigenous energy group, Oando Plc, has stated that its affiliate Oando Energy Resources (OER) has entered into agreements with ConocoPhillips (COP) to acquire its entire business interests in Nigeria for a total cash consideration of $1.79 billion plus customary adjustments.

The proposed deal is the biggest acquisition by an indigenous company in the history of Nigeria's oil and gas industry.

The onshore business to be acquired by Oando include Phillips Oil Company Nigeria Limited (POCNL), which holds a 20 percent 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).

Nigerian National Petroleum Corporation (NNPC) holds a 60 percent interest in the joint venture, while NAOC which operates the assets holds 20 percent.

The second onshore business is Phillips Brass Limited (PBL) which holds a 17 per cent shareholding interest in Brass LNG Limited, the company currently developing the Brass LNG project.

Brass LNG is a Greenfield project to develop a two-train of 10 million tonnes per year, Liquefied Natural Gas (LNG) facility in Bayelsa State.

The other partners are NNPC, 49 per cent; Eni, 17 per cent and Total, 17 per cent.

By the terms of the agreement, Oando will also acquire ConocoPhillips offshore business, which includes Conoco Exploration and Production Nigeria Limited (CEPNL).

The company holds a 95per cent operating interest in OML 131, with other partners as Medal Oil, 5 per cent; and Phillips Deepwater Exploration Nigeria Limited (PDENL), which holds a 20per cent non-operating interest in OPL 214.

The other partners include ExxonMobil which is the operator with 20per cent interest; Chevron, 20per cent; Svenska, 20per cent and the Nigerian Petroleum Development Company, 15 per cent, as well as and Sasol, 5per cent.

Pursuant to the proposed acquisition, Oando will indirectly purchase all of the issued share capital of POCNL, PBL, CEPNL and PDENL.

Group Chief Executive Officer of Oando Plc, Mr. Wale Tinubu, said it was expected that the closing of this transaction would position OER as a leading, indigenous independent Exploration and Production (E&P) player in Nigeria.

"Upon closing, we expect that this will be a transformational transaction for OER, as the company has only been listed on the Toronto Stock Exchange (TSX) for about 5 months and now has an opportunity to execute its strategy and materially increase its production and reserves base. In our view, the combination of the right timing, right assets and the right company can lead to significant value creation in the Gulf of Guinea. We expect that the closing of this transaction will position OER as a leading, indigenous independent E&P player in Nigeria," he said.

Also commenting, Chief Executive Officer of Oando Energy Resources, Mr. Pade Durotoye, said: "This potential transaction represents a transformational step 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. Our management team is familiar with the assets contained in this proposed transaction and, we believe, possess the regional experience and technical expertise necessary to capture and unlock their future value for our shareholders."

The total oil and gas production from the Onshore Assets for the period from January 1, 2012 until October 31, 2012 averaged approximately 43,000 Barrels of oil equivalent per day (boe/d gross) to OER.

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