In The News
In spite of the fluctuations and global slump in crude oil prices that have seen both foreign and indigenous oil companies scale back on projects, cut capital and higher lending terms, the economic value of the Nigerian Proved and Probable Reserves (2P) of Oando Energy Resources (OER), the Upstream subsidiary of energy giant Oando PLC, has yet risen from $545 Million to $1.8 billion.
This revelation came when DeGolyer and MacNaughton, ‘a renowned global’ petroleum consulting firm conducted an annual independent reserves and resources evaluation which
saw OER significantly increase its reserves’ value, both Proved (1P) and Proved and Probable (2P) Reserves by 44%. This result has however been attributed to the technical revisions and landmark acquisition of the Nigerian upstream oil and gas business of ConocoPhillips.
Proved net reserves (1P) increased by 78% to 288.5 million barrels of oil equivalent, while Proved and Probable net reserves (2P) increased by 82% to 420.3 MMboe. The increase was largely due to the recognition of the precedence of license renewals under the Nigerian Petroleum Act, which is the basis of the extension of the reserves beyond the current license limit.
Highlighting the surge in the reserves, Pade Durotoye, CEO, Oando Energy Resources said, “The 2014 Reserves figures confirm our thesis at the juncture we embarked on the transformative COP acquisition’.
Pade Durotoye added: “Subsequently, we’ve thrived in our operational achievements with a five-fold increase in total production from 4,500 barrels of oil per day to circa 56,000 boepd, and this large Reserves base gives us significant scope and opportunity to further enhance production over the coming years and pursue in-field exploration chances that will further increase our Resource Base.”
Recently, OER completed its 45,000bbls/day throughput volume, 52km Umugini alternate evacuation pipeline for the Ebendo Field, and equally underlined its forward approach in the new normal of low prices to reflect the implementation of effective cost-cutting initiatives, disciplined capex investments while optimising production levels via rigless activities, and inorganic growth through M&A deals that provide long term value.
Oando is looking to raise $402 million through a rights issue and will be looking for shareholder approval for its plan at its
production from 4,500 barrels of oil per day to circa 56,000 boepd, and this large Reserves base gives us significant scope and opportunity to further enhance production over the coming years and pursue in-field exploration chances that will further increase our Resource Base.