Oando Energy Resources Announces new Loan Agreement

             Oando Energy Resources Announces new Loan Agreement

  PR Newswire

  CALGARY, May 30, 2013

CALGARY, May 30, 2013 /PRNewswire/ --

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.

SOURCE: Oando Energy Resources Inc.

For further information:

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 +1403-218-2833
jdietz@equicomgroup.com dfeick@equicomgroup.com
 
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