Oando Energy Resources announces year end results & reserves update
CALGARY, Alberta, April 2, 2013
CALGARY, Alberta, April 2, 2013 /PRNewswire/ --
Oando Energy Resources Inc. (" OER " or the " Company ") ( TSX:OER), a company
focused on oil exploration and production in Nigeria, today announced
financial and operating results for the year ended December 31, 2012. The
audited financial statements, notes and MD&A pertaining to the period are
available on the System for Electronic Document Analysis and Retrieval
("SEDAR") at http://www.sedar.com and by visiting
http://www.oandoenergyresources.com . All monetary figures reported herein are
U.S. dollars unless otherwise stated.
*On December 20, 2012 the Company entered into an agreement with
ConocoPhillips to acquire ConocoPhillips' Nigerian businesses for a total
cash consideration of approximately US$1.79 billion. The closing of the
acquisition is subject to customary conditions including the receipt (or
waiver) of all approvals or consents from any governmental authority; and
the waiver or non-exercise of rights of first refusal, if any, with
respect to the shares to be acquired by OER and the assets underlying such
*On March 27, 2013 the Company announced that it had entered into binding
documentation to acquire a 40% working interest in the Qua Ibo Marginal
Field within OML 13, located onshore Nigeria, adding 1.04 Mmboe of \Proved
plus Probable (2P) Reserves and 2.37 Mmboe of Best Estimate (2C)
\Resources (net to OER). The acquisition is subject to approval by the
TSX. For further details see the Company's press release dated March 27,
*4,051 boepd in average net production for the year ended December 31,
2012. This represented an 18% decrease from the previous year;
*$133.7 million in revenue from the sale of crude for the year ended
December 31, 2012. This represented a 15% decrease from the previous year
and was attributable to lower production in 2012 compared to 2011. This
was a result of the natural decline in the reservoirs of the producing
fields; and shut in of wells in OML 56 (Ebendo) field as was earlier
*Average Gross sales price realized per barrel of oil produced was $110.21
for the year ended December 31, 2012.
*15.22 million boe of Proved plus Probable (2P) Reserves for the year ended
December 31, 2012.
*27.00 million boe of Best Estimate (2C) Contingent Resources for the year
ended December 31, 2012.
*$56.9 million in cash flow from operating activities for the year ended
December 31,2012. This represented an increase of 4% from the previous
*$15.6 million in net income for the year ended December 31,2012. This
represented an increase of 699% from the previous year;
*$77.8 million in capital expenditures for the year ended December 31,
2012. This represented a 19% increase from the previous year;
*$17.9 million in cash and cash equivalents for the year ended December 31,
2012. This represented a decrease of 45% from the previous year; and
*$480 million in long-term debt for the year ended December 31, 2012. This
represented an increase of 439% from the previous year. The increase was
primarily a result of a US$345 convertible loan from Oando PLC and US$90
million of bridge loans from a syndicate of Nigerian banks. These funds
were used to finance a cash deposit required by the ConocoPhillips sale
and purchase agreement.
*On July 24, 2012, the Company completed a reverse take-over of Exile
Resources Inc. and successfully listed Oando Energy Resources on the
Toronto Stock Exchange.
"Oando Energy Resources has undergone a significant transformation during
2012, as we achieved the status of a publically traded company on the Toronto
Stock Exchange during the third quarter and later closed the year by entering
into an agreement with ConocoPhillips to purchase in excess of approximately
43,000 boepd of production as well as an exploration portfolio," said OER CEO,
Pade Durotoye. "We believe that we now possess both a solid funding and
operational platform with which our Nigerian focused management team can
reliably build a leading indigenous independent oil & gas company that remains
poised to grow its production volumes, reserves and resource base."
Year ended Year ended as
December 31, December 31 otherwise
2012 2011 indicated) % Change
------------ ----------- --------------- --------
except as otherwise indicated 2012/2011 2012/2011
----------------------------- --------- ---------
Sales 133,708 157,268 (23,560) (0.15)
Barrels of oil
produced (bbl) 1,482,522 1,797,651 (315,129) (18)
(Gross) 110.21 110.78 (0.57) (0.01)
(Net) 90.19 87.49 2.70 0.03
operations 56,890 54,797 2,093 4
Income 15,555 (2,596) 18,151 699
Income on a
basis 0.15 (0.03) 0.18 600
Total Assets 1,068,008 947,593 120,415 13
 Price excludes royalties (8% on OML 125 (Abo) and 5% on OML 56 (Ebendo)),
Nigerian Government profit share of profit oil on the production sharing
contract in respect of OML 125 (Abo)
Year End Reserves and Resources
OER also announces that it has filed its " Statement of Reserves Data And
Other Oil and Gas Information" ("Form 51-101F1") for the year ended December
31, 2012. A copy of the Forms 51-101F1, 51-101F2 and 51-101F3 are available
under the Company's profile on SEDAR at http://www.sedar.com and on the
Company's website at http://www.oandoenergyresources.com .
The Company's Nigerian assets were evaluated, with an effective date of
December 31, 2012, by qualified independent reserves engineers The Petroleum
and Renewable Energy Company Limited ("Petrenel) in their report dated March
21, 2013 (the "Petrenel Report"). The Company's Nigerian assets were evaluated
by Petrenel in accordance with the Canadian Oil and Gas Evaluation Handbook
and presented in the Petrenel Report.
About Oando Energy Resources Inc. (OER)
OER currently has a broad suite of producing, development and exploration
properties in the Gulf of Guinea (predominantly in Nigeria) with current
production of approximately 3,070 barrels of oil per day. OER has been
specifically structured to take advantage of current opportunities for
indigenous companies in Nigeria, which currently has the largest population in
Africa, and one of the largest oil and gas resources in Africa.
There is no certainty that it will be commercially viable to produce any
portion of the Contingent Resources.
The estimates of reserves and future net revenue for individual properties may
not reflect the same confidence level as estimates of reserves and future net
revenue for all properties, due to the effects of aggregation.
See the Company's Form 51-101F1 filed under the Company's profile on SEDAR at
http://www.sedar.com on April 1, 2013.
Oil and Gas Equivalents
Production information is commonly reported in units of barrel of oil
equivalent ("boe" or "Mboe" or "MMboe") or in units of natural gas equivalent
("Mcfe" or "MMcfe" or Bcfe"). However, boe's or Mcfe's may be misleading,
particularly if used in isolation. A boe conversion ratio of 6 Mcf = 1 barrel,
or a Mcfe conversion ratio of 1 barrel = 6 Mcf, is based on an energy
equivalency conversion method primarily applicable at the bumer tip and does
not represent a value equivalency at the wellhead.
"Reserves" are estimated remaining quantities of oil and natural gas and
related substances anticipated to be recoverable from known accumulations, as
of a given date, based on analysis of drilling, geological, geophysical, and
engineering data; the use of established technology; specified economic
conditions, which are generally accepted as being reasonable, and shall be
disclosed. Reserves are classified according to the degree of certainty
associated with the estimates.
"Proved Reserves" are those Reserves that can be estimated with a high degree
of certainty to be recoverable. It is likely that the actual remaining
quantities recovered will exceed the estimated Proved Reserves.
"Probable Reserves" are those additional Reserves that are less certain to be
recovered than Proved Reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated
Proved plus Probable Reserves.
"Possible Reserves" are those additional Reserves that are less certain to be
recovered than Probably Reserves. It is unlikely that the actual remaining
quantitates recovered will exceed the sum of the estimated Proved plus
Probable plus Possible Reserves.
"Contingent Resources" are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations using
established technology or technology under development, but which are not
currently considered to be recoverable due to one or more contingencies.
Contingencies may include factors such as economic, legal, environmental,
political and regulatory matters or lack of infrastructure or markets. It is
also appropriate to classify as contingent resources the estimated discovered
recoverable quantities associated with a project in the early evaluation
stage. Contingent resources are further classified in accordance with the
level of certainty associated with the estimates and may be sub-classified
based on project maturity and/or characterized by their economic status.
"Best Estimate" is considered to be the best estimate of the quantity of
resources that will actually be recovered. It is equally likely that the
actual remaining quantities recovered will be greater or less than the best
estimate. Those resources that fall within the best estimate have a 50%
confidence level that the actual quantities recovered will equal or exceed the
"Low Estimate" is considered to be a conservative estimate of the quantity of
resources that will actually be recovered. It is likely that the actual
remaining quantities recovered will exceed the low estimate. Those resources
at the low end of the estimate range have the highest degree of certainty - a
90% confidence level - that the actual quantities recovered will equal or
exceed the estimate.
"High Estimate" is considered to be an optimistic estimate of the quantity of
resources that will actually be recovered. It is unlikely that the actual
remaining quantities of resources recovered will meet or exceed the high
estimate. Those resources at the high end of the estimate range have a lower
degree of certainty - a 10% confidence level - that the actual quantities
recovered will equal or exceed the estimate.
Forward Looking Statements:
This news release contains forward-looking statements and forward-looking
information within the meaning of applicable securities laws. The use of any
of the words "expect", "anticipate", "continue", "estimate", "objective",
"ongoing", "may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking information
or statements. In particular, this news release contains forward-looking
statements relating to intended acquisitions.
Although the Company believes that the expectations and assumptions on which
such forward-looking statements and information are reasonable, undue reliance
should not be placed on the forward-looking statements and information because
the Company can give no assurance that such statements and information will
prove to be correct. Since forward-looking statements and information address
future events and conditions, by their very nature they involve inherent risks
Actual results could differ materially from those currently anticipated due to
a number of factors and risks. These include, but are not limited to: risks
related to international operations, the actual results of current exploration
and drilling activities, changes in project parameters as plans continue to be
refined and the future price of crude oil. Accordingly, readers should not
place undue reliance on the forward-looking statements. Readers are cautioned
that the foregoing list of factors is not exhaustive.
There is no certainty that any portion of the resources referred to herein
will be discovered and, if discovered, there is no certainty that it will be
commercially viable to produce any portion of the resources.
Additional information on these and other factors that could affect the
Company's financial results are included in reports on file with applicable
securities regulatory authorities and may be accessed through the SEDAR
website ( http://www.sedar.com ) for the Company. The forward-looking
statements and information contained in this news release are made as of the
date hereof and the Company undertakes no obligation to update publicly or
revise any forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by applicable
For further information: Contact Information:Pade Durotoye, CEO Oando Energy
Resources Inc. email@example.com +1-403-561-1713Tokunboh
Akindele Head Investor Relations Oando Energy Resources Inc.
firstname.lastname@example.org +1-403-560-7450Jeremy Dietz/David Feick
Investor Relations +1-403-218-2833 email@example.com
(OER. OER.WT. OER.WT.A.)
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