Oando repays $100m facility to Afrexim

Oando repays $100m facility to Afrexim

Oando repays $100m facility to Afrexim

Oando Energy Resources (OER), the upstream
subsidiary of Oando Plc has repaid of $100
million loan facility to African Export-Import
Bank (Afrexim), which was utilized in the
financing of the landmark $1.5 Billion
acquisition of the ConocoPhillips Nigerian oil and
gas business in July 2014.
Combined with cash on hand, OER’s net
debt position now stands at $500
Million; down 44 per cent from $900
Million outstanding at the completion of
the COP acquisition.
Confidence in the operations and asset
quality of OER by international financial
institutions has been further
strengthened, notably due to OER’s
operational performance in the last 12
months in spite of crude downturn. OER
has achieved significant milestones in
the course of the year, including the
generation of cash inflow of $283mn
from the reset of oil hedges; the
commencement of production at Qua
Iboe, which added 2,500 b/d to OER’s
gross total taking it to 53,169 b/d; and
finally an increase in 2P reserves by 82
per cent to 420.3mn boe.
A $91 million RBL Upsize was arranged
by Standard Chartered Bank and African
Export-Import Bank with participation
from Standard Bank of South Africa
Limited, Stanbic IBTC Bank Plc, and
Natixis; while the proceeds, along with
cash on hand, were used to repay the
$100 Million Afrexim Facility.
Commenting, Pade Durotoye, CEO Oando
Energy Resources said: “The upsizing of
the RBL loan is a true testament to the
quality of the assets we acquired in July
2014. The cashflows from these assets
have continued to pay down the
Company’s post acquisition debt with the
assistance of the value realized from the
resetting of our hedge instruments,
leaving a debt:equity ratio of 0.57 today,
compared with 0.91 in July 2014. OER
remains focused on its financial and
operational goals of strengthening its
balance sheet and maintaining stable
production levels through production
optimization in these times of reduced
oil prices and limited capital
investment.”
With the new global pricing reality,
reduced investments, and industry
shrinkage, Oando is reaffirming
investors’ confidence in its operations
and has espoused a strategic focus of
aggressive debt reduction, optimization
of production levels, and inorganic
growth through M&A deals that create
immediate and long term equity value
for shareholders.