Oao - Oando Plc - Acquisition Of Interest In Offshore Nigeria Release Date: 25/02/2008 11:42:59 Code(s): OAO
OAO - Oando Plc - Acquisition Of Interest In Offshore Nigeria
Oml 125 And Oml 134
(Incorporated in Nigeria and registered as an external company in South
Registration number: RC 6474
(External company registration number: 2005/038824/10)
Share Code on the JSE Limited: OAO
Share Code on the Nigerian Stock Exchange: UNTP
("Oando" or "the Company")
ACQUISITION OF INTEREST IN OFFSHORE NIGERIA OML 125 AND OML 134
Shareholders are advised that Oando has, subject to the fulfilment or
waiver of the conditions precedent set out in paragraph 3 below, entered
into an agreement to acquire Shell Nigeria Exploration and Production
Company Limited`s ("Shell") entire 49.81% interest in the Production
Sharing Contracts ("PSCs") and Joint Operating Agreement ("JOA")
respectively in respect of offshore Nigeria Oil Mining Licence ("OML") 125
and OML 134 (the "Transaction").
2. Terms of the Transaction
Oando has agreed, subject to the fulfilment or waiver of the conditions
precedent set out in paragraph 3 below, to acquire, the Shell interest for
an aggregate initial cash consideration of US$625,764,000 (the "initial
consideration"). The initial consideration payable in terms of the
Transaction will be settled as follows:
- US$62,576,400 on 22 February 2008, the date of signature of the sale
and purchase agreement (the "agreement") for the Transaction; and
- US$563,187,600 on the completion of the Transaction.
The initial consideration will be adjusted to account for changes between
the effective date of the Transaction being 30 June 2007 and the completion
date being the date when all the conditions precedent set out in paragraph
3 below have been fulfilled or waived. The initial consideration and any
adjustments will be funded from both internal cash resources and from
external financing. Standard Chartered, Standard Bank Group Limited, BNP
Paribas and Merrill Lynch International are providing financing to Oando
for the Transaction.
3. Conditions precedent
The Transaction is subject to warranties and indemnities normal for a
transaction of this size and nature and is also subject to the fulfilment
or waiver of the following principal conditions precedent:
- pre-emptive rights related to the JOA being waived;
- receipt of consent by the Nigerian government;
- approval by Oando shareholders in a general meeting of the
implementation of the Transaction; and
- no material adverse event having occurred in the business condition as
defined in the agreement.
4. Rationale for the Transaction
Oando is Nigeria`s largest energy group with strategic investments in a
range of energy companies across West Africa. With its investments and
diversified business model the Company is fast achieving its goal of being
"the leading integrated energy solutions provider".
The Transaction represents a rare opportunity to acquire a balanced
upstream asset portfolio in our home market in line with our stated
principle to acquire proven and actively producing properties that
demonstrate the potential for increased financial return. Oando, through
the Transaction, will benefit from partnering with Agip, a world class
operator with significant experience in Nigeria.
The assets being acquired include production from the Abo field combined
with near term production growth and high potential exploration acreage to
complement Oando`s existing upstream position. The Transaction brings
approximately 9,000 barrels per day of crude oil production, 82.5 million
barrels of 2P and risked contingent reserves and turns Oando into Nigeria`s
leading indigenous exploration and Production Company.
The Transaction is a Category 1 transaction in terms of the JSE Limited`s
Listings Requirements. Oando is accordingly required to issue a circular
to shareholders containing full details of the Transaction and the
resolution required to be approved by Oando shareholders. The circular
will be posted to Oando shareholders in due course, including the notice of
a general meeting.
6. Financial effects
The Transaction relates to the acquisition of assets and historical
financial accounts for the acquired business are not available. Therefore,
financial effects cannot be quantified at this stage.
25 February 2008
Deutsche Securities (SA) (Proprietary) Limited
Date: 25/02/2008 11:42:59 Supplied by www.sharenet.co.za
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