Oando Energy Resources announces new loan agreement

CALGARY, May 30, 2013 /CNW/ - Oando Energy Resources Inc. ("OER" or the 
"Company") (TSX: OER), a company focused on oil exploration and production in 
Nigeria, today announced that it had entered into a loan agreement ("Loan 
Agreement") with Oando Plc ("Oando") to refinance and supplement the loan 
extended by Oando to OER on December20,2012. OER and Oando also executed 
a deed of repayment ("Repayment Deed") permitting OER to repay amounts owing 
under the Loan Agreement by the issuance of common shares of OER. Oando owns 
94.6% of the common shares of OER ("Shares"), on a non-diluted basis. 
"This refinancing of our original loan from Oando Plc underscores the strong 
financial backing and ongoing support that OER continues to receive from its 
majority shareholder," said Pade Durotoye, CEO of Oando Energy Resources. "The 
financial flexibility afforded to us by this relationship is a key 
differentiator for OER, as it provides our young company with the stability 
and means to pursue an ambitious growth agenda within Nigeria." 
Pursuant to the Loan Agreement, Oando provided a facility ("Facility") to OER 
of up to US$386,000,000, bearing an annual interest rate of 5%. Of the 
Facility, US$362,000,000 plus accrued interest is required to be repaid by 
September30,2013 while the remainder of the Facility is required to be 
repaid on or before December 31, 2013. 
Pursuant to the Repayment Deed, OER is permitted to elect to repay the 
Facility by the issuance of Shares, provided that all regulatory approvals 
have been obtained, at the earliest of the following events: (i) a receipt has 
been issued for a final prospectus ("Final Prospectus") in respect of an 
offering of Shares (or securities convertible into Shares at no additional 
cost to the subscriber thereof); (ii)completion of the proposed acquisition 
by OER of the Nigerian oil and gas assets of ConocoPhillips Company 
("Acquisition"), as announced by OER in December2012; and (iii)termination 
of the Acquisition. Should OER elect to repay the Facility by the issuance 
of Shares, the price per Share will be (i) the price per Share (or security 
convertible into a Share at no additional cost to the subscriber) identified 
in the Final Prospectus (as adjusted, if necessary, to comply with maximum 
discount rules of the TSX), provided that the Acquisition has not been 
terminated; or (ii) in all other circumstances, the 5-day VWAP at the time of 
election by OER that it wishes to repay the Facility by the issuance of 
Shares. The election to repay the Facility by the issuance of Shares can be 
exercised no later than five business days prior to September 30, 2013. In 
the event that the election by OER to repay the Facility by the issuance of 
Shares would result in Oando having an ownership interest in OER that is 
higher than Oando's current ownership interest of 94.6% (on a non-diluted 
basis), the number of Shares to be issued by OER will be reduced so as to 
ensure that Oando's stake in OER does not exceed such current ownership 
interest and the balance, if any, of amounts owing under the Loan Agreement 
will be payable in cash. 
By way of example, if (i) the Facility had been provided, (ii) OER were 
permitted to elect to repay the Facility by the issuance of Shares, and (iii) 
OER made such election on today's date, OER would need to issue approximately 
263,368,815 Shares to Oando as repayment of the Facility (based on the closing 
price of the Shares on the TSX on May28,2013 and assuming no interest had 
accrued). However, pursuant to the terms of the Repayment Deed, OER would 
not be permitted to repay the Facility by the issuance of Shares on today's 
date and would instead be required to repay it in cash. 
The Corporate Governance Committee of OER, comprising independent directors 
unrelated to Oando, unanimously recommended approval of the Loan Agreement and 
Repayment Deed to the board of OER who then approved it (with directors 
affiliated with Oando abstaining from the vote). 
Depending on the number and price of Shares issued by OER to Oando as 
repayment of the Facility under the Repayment Deed, such issuance, if any, 
could (i)provide consideration to OER in excess of 10% of OER's market 
capitalization; and/or (ii)constitute a private placement for an aggregate 
number of Shares greater than 25% of the number of OER's current outstanding 
Shares, on a non-diluted basis, at a price per Share less than the market 
price of Shares on the date hereof; and/or (iii)constitute a private 
placement to insiders for greater than 10% of the number of OER's current 
outstanding Shares, on a non-diluted basis, each of which requires shareholder 
approval under Sections501(c), 607(g)(i) and 607(g)(ii), respectively, of 
the TSX Company Manual. However, Section 604(f) of the TSX Company Manual 
provides an exemption from such shareholder approval requirements where there 
is a holder of at least 90% of a listed issuer's shares and the listed issuer 
issues a press release at least 10 business days in advance of the closing of 
the transaction disclosing the material terms of the transaction and that the 
issuer has relied upon this exemption. As Oando owns 94.6% of OER's Shares, 
OER intends to rely on this exemption. The effective date of the Repayment 
Deed will not occur until the expiry of 10 business days from the date hereof. 
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 5,205 bopd from the Abo Field in OML 125 and the 
Ebendo Field in OML 56. 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. 
Pade Durotoye, CEO Oando Energy Resources Inc. 
pdurotoye@oandoenergyresources.com +1403 561 1713 
Tokunboh Akindele Head Investor Relations Oando Energy Resources Inc. 
takindele@oandoenergyresources.com +1403 560 7450 
Jeremy Dietz/David Feick Investor Relations +1 403 218 2833 
jdietz@equicomgroup.com dfeick@equicomgroup.com 
SOURCE: Oando Energy Resources Inc. 
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CO: Oando Energy Resources Inc.
ST: Alberta
NI: OIL LOAN MNA  
-0- May/30/2013 22:32 GMT
 
 
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