The share price of Oando Plc soared 55 kobo or 9.9%, closing at N6.10 each as trading closed Monday as traders and investors reacted positively to news that the indigenous energy solutions provider reached an agreement with Eni for the acquisition of 100% stake of Nigerian Agip Oil Company Limited in Nigeria.
Completion of the transaction, which Oando said “is subject to Ministerial Consent and other required regulatory approvals,” doubles its current participating interests in OMLs 60, 61, 62, and 63 from 20% to 40%.
The deal also raises Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure, including 40 discovered oil and gas fields, of which 24 are currently producing, approximately 40 identified prospects and leads, 12 production stations, approximately 1,490 km of pipelines, three gas processing plants, the Brass River Oil Terminal, the Kwale-Okpai phases 1 & 2 power plants (with a total nameplate capacity of 960MW), and associated infrastructure.
The statement jointly signed by Ayotola Jagun, the Company Secretary, and Alero Balogun, General Manager, Business Support Group, said the transaction will deliver 98% growth on the 503.3MMboe Oando Plc’s total reserves based on 2021 estimates, Oando’s total reserves, the statement added.
The transaction also grows Oando’s exploration asset portfolio through the acquisition of a 90% interest in OPL 282 and 48% interest in OPL 135; in addition to NAOC’s participating interest in SPDC JV (Shell Production Development Company Joint Venture – operator Shell 30%, TotalEnergies 10%, NAOC 5%, NNPC 55%) is not included in the perimeter of the transaction and will be retained in Eni’s portfolio.
The statement quoted Wale Tinubu, Group Chief Executive of Oando Plc as saying “the synergies created by this acquisition will unlock unparalleled opportunities for us to realign expectations, enhance efficiency, optimize resource allocation, and significantly increase production.
“Furthermore, it is in alignment with our strategy of acquiring, enhancing, appraising, and efficiently developing reserves. Today’s announcement is not just an important milestone for the future of Oando; it brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector. Having achieved this significant milestone, we look forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for our local communities, stakeholders and shareholders,” he added.