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Oando Commences Rights Issue, Targets N54.6 billion

By on December 31, 2012

Wale Tinubu, Chairman, Oando Energy Resources

Oando Plc has commenced its rights trading exercise which is geared to raise N54.6 billion in order to fund the company’s expansion into a much larger upstream petroleum company.

The company is offering shareholders 2 ordinary shares for every one ordinary share held at close of business on October 19th.

The rights issue will take place on the Nigerian Stock Exchange and the Johannesburg Stock Exchange as the company is listed in both countries.

The issue opened on the floor of the NSE last Friday and will commence in Johannesburg on January 4th. The offer will close on February 6th, 2013.

Group Chief Executive, Oando PLC, Mr. Wale Tinubu, said, “We are happy to announce the opening of our Rights Issue offering, in line with our corporate strategy for balance sheet optimization and the financing of growth initiatives in the Upstream sector.

“Pursuant to the recent signing of agreements by our affiliate OER with ConocoPhillips, to acquire their entire Nigerian Asset base for $1.79 Billion plus customary adjustments, OER will be transformed from a small size oil company with ~4,500 bbls/day of production and 9 million barrels of oil equivalent (“MMboe”) to a midsize oil producer with close to 50,000bbls/day of production with 2P reserves of 213 MMboe and 2C reserves of 198 MMboe, with significant risked resources”.

“The successful outcome of the Rights Issue will position Oando to increase value for shareholders in the Upstream through focused portfolio growth in production, cash margins and improved returns on capital deployed. We count on the consistent support of our shareholders to seize the opportunity to take up their rights and benefit from the higher margin value creation the Upstream offers.”