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Oando Energy Updates Progress Since COP Acquisition
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Oando Energy Resources Inc., has announced financial and operating results for the three and nine month periods ended September 30, 2014.
Pade Durotoye, CEO of Oando Energy Resources Inc. said: "At the end of July we completed the transformational acquisition of the Nigerian Upstream business of ConocoPhillips Company (COP), that substantially grew our production, reserves, resources and cashflow, which will allow us exploit a broader suite of assets and new growth opportunities both onshore and offshore Nigeria.
In the third quarter we saw an immediate and significant impact on revenue with only a partial two months of production contribution from the assets acquired in the ConocoPhillips transaction. We also took steps to strengthen our balance sheet with the conversion to equity of more than $315 million in principal, interest and fees payable under the $1.2 billion facility agreement."
Recent Operational Highlights
- On July 30, 2014, completed the acquisition of COP Assets for a total cash consideration of $1.5 billion. The Corporation is now positioned as one of the leading E&P players in the Nigerian Oil & Gas sector, with Proved plus Probable Reserves of 230.6 MMboe, Best Estimate Contingent Resources of 536.8 MMboe, Unrisked Best Prospective Resources of 2,051.8 MMboe as at December, 2013 and total production of approximately 51,400 boe/day at the end of the third quarter, 2014.
- Achieved total production of 4.1 million boe in the nine months and 3.2 million boe in the three months periods ended September 30, 2014 compared with 1.1 million boe and 363,000 boe in the comparative periods ended September 2013, respectively. The increase was primarily due to the Company's newly acquired working interest in OML 60 - 63 which contributed 2.9 million boe of production over the 62-day period from July 30 to September 30, 2014.
- During the Quarter, the Company and its partners completed the construction of the 45,000bbls/d Umugini pipeline project and commenced final testing in readiness for commercial injection into the pipeline.
Operational Update
OML 60-63, OML 131
From July 30 to September 30, 2014, average production of 47,934 boe/d for 62 days and capital expenditures on Acquisition Asset fields were $25.3 million. In this period, $19 million was spent on the Ogbogene NE and Ogbainbiri Deep C projects, and $6.3 million was spent on other capital projects. The Corporation's share of NAOC JV budgeted costs for Q4 2014 is estimated to be $28.6 million.
OML 125 (Abo Field)
Budgeted capital expenditures for OML 125 for the nine months ended September 30, 2014 were $33.3 million. The Company incurred $66.3 million of capital expenditures in this period, which is attributable to Abo 3, Abo 8, and Abo 12 drilling and completion activities. Capital expenditures on Abo 3 were $41.8 million, which is the main driver of the over budget amount due to increased completion costs. Expenditures on Abo 8 and Abo 12 were $3.9 million and $20.6 million, respectively.
OML 56 (Ebendo Field)
Budgeted capital expenditures for OML 56 for the nine months ended September 30, 2014 was $16.5 million. The Company incurred $9.9 million on construction of the Umugini pipeline, Ebendo Well 7 drilling and completion activities, and flow station construction. The Ebendo Well 7 was successfully drilled and completed with the expectation that it will be connected to Umugini pipeline in Q4 2014.
OML 13 (Qua Ibo Field)
Budgeted capital expenditures for OML 13 were set at $40.6 million for 2014. In the nine months ended September 30, 2014, the Company incurred capital expenditures of about $11.5 million on pipeline and facility costs as well as flow station construction. Oil production from the Qua Ibo Field's C4 and D5 reservoirs are expected to commence in the fourth quarter of 2014 after the commissioning of a crude processing facility which will be completed in the fourth quarter of 2014.
OML 134 (Oberan Field)
Budgeted capital expenditures for OML 134 were set at $7.4 million for 2014. In the nine months ended September 30, 2014, the Company paid $6.1 million of the costs incurred on exploratory activities related to the Mindiogboro prospect. Based on results from the drilling of the exploration well into the Mindiogboro prospect, the Company plans to continue geological, geophysical, and environmental studies in 2015.
Blocks 5 & 12, EEZ of São Tomé & Príncipe
Budgeted capital expenditures for Block 5 and 12, EEZ of São Tomé & Principe were set at $5.2 million for 2014. No significant capital expenditures were incurred in these fields in the nine months ended September 30, 2014. Planned capital expenditures related to a four year work programme of 2D and 3D seismic acquisition and studies remains with Seismic acquisition to be incurred in December 2014.