Oando Plc - Oando Plc Announces Completion Of Sale Of East Horizon Gas Company To Seven Energy International LimitedRelease Date: 03/04/2014 09:30:00 Code(s): OAO
(Incorporated in Nigeria and registered as an external company in South Africa)
External Registration number: RC 6474
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?)
Oando PLC Announces Completion of Sale of East Horizon Gas Company to Seven
Energy International Limited
Lagos, Nigeria ? Oando PLC (?Oando? or the ?Group?), Nigeria?s leading indigenous energy
group listed on both the Nigerian and Johannesburg Stock Exchange, announces that it has
completed the sale of the entire issued share capital of one of its wholly owned subsidiaries,
East Horizon Gas Company Limited (?EHGC?) to Seven Energy International Limited (?Seven
Energy?) for a total gross consideration (the ?Consideration?) of up to US$250 Million.
The Consideration consist of:
i. An initial payment of US$100 Million in cash;
ii. The assumption by Seven Energy of existing liabilities of EHGC, including approximately
US$62 Million of bank indebtedness; and
iii. The balance in deferred payments due on achievement of certain operational and
contractual conditions. It is expected that these conditions will be satisfied during the
course of 2014.
EHGC is a special purpose vehicle operating a 128km, 120mmscfd, 18-inch natural gas
transmission and distribution pipeline traversing the Akwa Ibom and Cross River States. EHGC
also has a gas sales agreement to supply up to 25 mmscfpd, increasing to 50 mmscfpd in 2016,
under a 20 year ?take-or-pay? agreement expiring in 2032.
Mr. Wale Tinubu, Group Chief Executive, Oando PLC said: ?This divestment underscores our
focus on making strategic portfolio choices to improve the Company?s overall intrinsic value
whilst boosting our overall Group liquidity in furtherance of our upstream transformational
growth initiatives. It gives us great satisfaction, as an enabler in the quest for solving the chronic
power shortage, that our counterpart, Seven Energy, will be able to optimise gas resources by
serving industrial consumption and power generation needs in the South East region".
Oando Gas & Power?s Chief Executive Officer, Mr. Mobolaji Osunsanya, acknowledged the
ongoing expansion efforts the Company continues to embark on in the midstream sector.
Osunsanya said: ?Oando will continue to play a major role in the development of Nigeria?s
expanding gas and power footprint in the years ahead.
The construction of the 4th phase of our Greater Lagos pipeline is scheduled to commence this
year; this will grow our capacity as well as customer base within the Lagos metropolis. Other
key growth projects include the refurbishment and expansion of our recently acquired Port
Harcourt gas distribution business; growth in our compressed natural gas distribution
programme; as well as increase in our power generation capacity beyond 23MW. Longer term
projects include the 400km SW-NW pipeline and the Central Processing Facility that will serve
as a gas gathering and processing hub in the Niger Delta.
The development of midstream infrastructure remains invaluable to our future strategy as we
look to address shortfalls in the power sector that currently blight our nation?.
3 April 2014
Macquarie First South Capital Proprietary Limited
Head, Investor Relations
Tel: +234 (1) 2601290-9, Ext 6396
Chief Strategy Officer
Tel: +234 (1) 2601290-9, Ext 6296
Date: 03/04/2014 09:30:00 Supplied by www.sharenet.co.za
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