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OAO - Oando Plc - Acquisition of interest in offshore Nigeria OML 125 and OML

Release Date: 14/01/2009 11:00:02      Code(s): OAO
OAO - Oando Plc - Acquisition of interest in offshore Nigeria OML 125 and OML   
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" or "the Company")                                                      
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 Oando has paid for 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 Nigerian AGIP    
Exploration Limited ("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         
2.  Terms of the Transaction                                                    
Oando has agreed, to acquire and has paid to AGIP, an aggregate cash            
consideration of US$188,445,292 (the "consideration").  The consideration       
payable in terms of the Transaction was settled as follows:                     
-  US$18,844,529 on July 25, 2008, the date of signature of the sale and        
purchase agreement (the "agreement") for the Transaction; and                   
-  US$169,600,763 on January 12, 2008 for the completion of the Transaction.    
The initial consideration was 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   
had 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 was    
funded from internal cash resources. Standard Chartered, Standard Bank Group    
Limited and BNP Paribas are providing re-financing to Oando for the Transaction.
3.  Conditions precedent                                                        
The Transaction was subject to warranties and indemnities normal for a          
transaction of this size and nature and conditions precedent which have been    
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. Shareholders are advised that even though Oando has paid the required        
consideration to AGIP, the Transaction is yet to be concluded as Oando is still 
awaiting a confirmation of the receipt of the said payment from AGIP.           
Unfortunately, the news of the payment and the Transaction status was leaked to 
the Nigerian Press, even though Oando is still awaiting AGIP`s confirmation and 
final signoff on the Transaction.                                               
14 January 2009                                                                 
Deutsche Securities (SA) (Proprietary) Limited                                  
Financial adviser                                                               
Standard Chartered                                                              
Date: 14/01/2009 11:00:02 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
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information disseminated through SENS.                                          

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