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Oao - Oando - Acquisition Of Interest In Offshore Nigeria Oml 125 And Oml 134

Release Date: 25/07/2008 13:44:02      Code(s): OAO
OAO - Oando - Acquisition of interest in offshore Nigeria OML 125 AND OML 134   
Oando Plc                                                                       
(Incorporated in Nigeria and registered as an external company in South Africa) 
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                                 
ISIN: NG00000UNTP0                                                              
("Oando")                                                                       
ACQUISITION OF INTEREST IN OFFSHORE NIGERIA OML 125 AND OML 134                 
1.  Introduction                                                                
Shareholders are referred to the announcement released on SENS on 25 February   
2008 as well as the subsequent cautionary announcements released on SENS on 2   
April 2008, 14 May 2008 and 25 June 2008 respectively.  Shareholders are advised
that the transaction set out in the announcement has changed and Oando has,     
subject to the fulfilment or waiver of the conditions precedent set out in      
paragraph 3 below, entered into an agreement with Nigerian AGIP Exploration     
Limited ("AGIP") to acquire a 15.0% interest in the Production Sharing Contracts
("PSCs") in respect of offshore Nigeria Oil Mining Licence ("OML") 125 and OML  
134 (the "Transaction").  The Transaction has been agreed with AGIP subsequent  
to AGIP`s exercise of its preemption rights over Shell Nigeria Exploration and  
Production Company Limited`s ("Shell") entire 49.81% interest in the PSCs and   
JOA in respect of OML 125 and OML 134.  Standard Chartered has acted as Oando`s 
sole financial adviser for this 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 AGIP interest for an     
aggregate initial cash consideration of US$188,445,292 (the "initial            
consideration").  The initial consideration payable in terms of the Transaction 
will be settled as follows:                                                     
-  US$18,844,529 on 24 July 2008, the date of signature of the sale and purchase
agreement (the "agreement") for the Transaction; and                          
-  US$169,600,763 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. These adjustments reflect interest on the initial
consideration as well as positive and negative adjustments to account for       
expenses incurred and income received from the acquired business by the seller  
since the effective date.  The initial consideration and any adjustments will be
funded from both internal cash resources and from external financing. Standard  
Chartered, Standard Bank Group Limited and BNP Paribas 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:                         
-  receipt of consent by the Nigerian government; 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 3,000  
barrels per day of crude oil production, 24.8 million barrels of 2P and risked  
contingent reserves and turns Oando into Nigeria`s leading indigenous           
exploration and Production Company.                                             
5.  Circular                                                                    
The Transaction is a Category 2 transaction in terms of the JSE Limited`s       
Listings Requirements.  After taking into account the estimated adjustments     
referred to in paragraph 2 above, between the effective and the closing date,   
the transaction would still be considered a Category 2 transaction. Accordingly,
Oando is not required to issue a circular to shareholders.                      
6.  Financial effects                                                           
As the Transaction relates to the acquisition of a 15% interest in certain      
assets and historical financial accounts for the acquired business are not      
available, historical financial effects cannot be quantified.                   
7. Withdrawal of cautionary                                                     
The Oando cautionary announcement released on SENS on 2 April 2008 and renewed  
on 14 May 2008 and 25 June 2008 is hereby withdrawn.  Accordingly, Oando        
shareholders are no longer required to exercise caution when dealing in their   
Oando shares.                                                                   
Johannesburg                                                                    
25 July 2008                                                                    
Sponsor                                                                         
Deutsche Securities (SA) (Proprietary) Limited                                  
Financial adviser                                                               
Standard Chartered                                                              
Date: 25/07/2008 13:44:02 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
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