Oando Plc, one of Nigeria’s leading indigenous energy solutions companies on Wednesday announced the successful upsizing of its Reserve Based Lending (RBL2) facility to $375 million.
This is coming on the heels of the announcement of a record 267 per cent increase in its profit after tax (PAT) for the financial year ended December 2024, and also following its recent successful acquisition of the Nigerian Agip Oil Company (NAOC).
The facility refinancing secured by Oando, was led by the African Export-Import Bank (Afreximbank) with the support of Mercuria, extends the final maturity date of the facility to January 30, 2029.
A reserve-based lending facility is a type of loan commonly used in the oil and gas industry, where the amount a company can borrow is determined primarily by the value of its proven oil and gas reserves.
In recent years, financing arrangements for the acquisition, development, and operation of oil and gas assets have commonly been structured as RBLs.
According to statement by the company, it explained that under this model, the amount a borrower, in this instance Oando, could access was directly tied to the size and value of their proven reserves, with Oando’s standing at 1.0Bnboe —referred to as the Borrowing Base.
This upsizing was a result of the company’s significant progress in deleveraging, having substantially reduced the original $525 million RBL2 facility, signed in 2019, down to $100 million by the close of 2024.
This proactive debt management has paved the way for successful refinancing.
Speaking on this strategic achievement, Group Chief Executive, Oando, Mr. Wale Tinubu was quoted to have said: “We are pleased to have completed the upsizing of our RBL2 facility, a strategic milestone that reinforces our commitment as Operator of the Oando-NEPL JV to maximising the value of our expanded asset portfolio.
“Our Joint Venture holds extensive reserves with the potential to generate over $11 billion in net cashflows to Oando over the assets’ life. This working capital facility is a critical enabler towards efficiently extracting and monetising these resources.
“We appreciate the continued partnership of Afreximbank and Mercuria, whose unwavering support underscores their alignment with our long- term focus on maximising production, optimising asset performance, and delivering sustainable value to all stakeholders.”
It stated that the newly secured capital injection would be strategically deployed to aggressively pursue key growth initiatives, including accelerated drilling campaigns, critical infrastructure upgrades across its operations, and the implementation of advanced operational efficiencies throughout its portfolio.
These strategic investments directly support the company’s stated ambition to significantly increase its production levels to 100,000 barrels of oil per day (bopd) and 1.5 billion cubic feet (Bcf) of gas per day by the end of 2029.
This positive development followed Oando’s landmark $783 million acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant, ENI, in August 2024. This transformative acquisition significantly expanded Oando’s operational landscape, incorporating twenty-four currently producing fields, approximately forty identified exploration prospects and leads, twelve key production stations, an extensive network of approximately 1,490 km of pipelines, three vital gas processing plants, the strategic Brass River Oil Terminal, the significant Kwale-Okpai phases 1 & 2 power plants boasting a total nameplate capacity of 960MW, and a comprehensive suite of associated infrastructure.
This successful refinancing underscores the confidence of leading financial institutions in Oando’s strategic direction and its ability to capitalise on its expanded asset base to drive growth and value creation in the Nigerian energy sector and beyond.
Meanwhile, the company on Wednesday announced a record 267 per cent increase in its Profit After Tax (PAT) for the financial year ended December 2024, on the back of its recent successful acquisition of the NAOC.
In a statement on its audited financial results for the period under consideration, Oando stated that its profits rose significantly from N60 billion in 2023 to N220 billion in 2024, driven mainly by higher upstream output and FX gains.
Besides, it recorded a revenue rise of 44 per cent to N4.1 trillion in 2024 from N2.9 trillion the previous year, while reserves grew by 95 per cent from 505 million barrels in 2023 to 983 million barrels of oil equivalent last year.
In 2024, Oando achieved an average daily production of 23,727 barrels of oil equivalent per day (boepd), a 3 per cent increase year-on-year, while the end-of-year exit rate rose to 36,000 boepd, with crude oil production climbing 22 per cent to 7,558 bpd.
Furthermore, OandoPlc highlighted its $550 million crude prepayment contribution to the Nigerian National Petroleum Company’s (NNPC) Project Gazelle. Recall that Oando played a pivotal role in Project Gazelle, a $3.3 billion crude oil-backed forward-sale finance facility sponsored by the NNPC and arranged by Afreximbank, with a view to enhancing volume security.
In his remarks on the release of the financial statement, Chief Executive of Oando, Wale Tinubu, described 2024 as a ‘defining year’ for the company, stating that looking ahead, 2025 will be the company’s year of execution.
He said: “ 2024 was a defining year for Oando, with the successful acquisition and integration of NAOC, marking the culmination of a decade-long strategic growth journey which has significantly deepened our upstream portfolio, resulting in our assumption of operatorship of the OML 60–63 series and the doubling of our working interest in the assets from 20 per cent to 40 per cent, as well as our 2P reserves from 500 million barrels of oil equivalent to 1 billion barrels.
“Despite a challenging macro-economic and security environment, we delivered a 44 per cent revenue increase to N4.1 trillion and a 267 per cent rise in profit after tax to N220 billion, occasioned by the intrinsic value of the NAOC acquisition and underscoring the resilience of our business model. In parallel, we achieved innovative success in our global trading operations whilst expanding our clean energy initiatives.
“Looking ahead, 2025 will be our year of execution. Our key priorities shall include unlocking synergies from the acquisition, addressing above-ground security risks through the implementation of a revamped security framework aimed at curbing the persistent theft of oil, cost optimisation, balance sheet restructuring, enhancing operational efficiency, and leveraging technology to improve productivity across our operations.
“In our bid to ramp up production towards achieving our target of 100,000 bopd and 1.5 bcf of gas by 2029, we shall pursue a dual-track approach of rig-less interventions and well workovers, complemented by an aggressive drilling programme.”
Wale Tinubu expressed excitement at the opportunities that lie ahead, pointing out that the company remains committed to delivering enhanced shareholder returns, shared prosperity and maintaining its position as a leading player in Africa’s evolving energy landscape.
In all, capital expenditures totaled N19 billion in 2024, down from N45 billion in 2023, reflecting the focus on completing the NAOC acquisition, while development activity is expected to ramp up in 2025. Natural Gas Liquids (NGL) production also decreased by 35 per cent, while gas was down 5 per cent.
Oando stated that its zero routine flaring programme remains on track for 2027 completion, in line with national and Joint Venture (JV) commitments, with 92 per cent reduction achieved to date.
In terms of its clean energy drive, Oando stated that its electric mass transit programme delivered 121,145 km of service, transporting 205,152 passengers and avoiding over 163,500kg of CO₂ emissions and secured 5,100 tons/month PET offtake commitments; progressing the development of recycling plant. It further highlighted the launch of 50 new electric buses.
It said the company is focused on post-acquisition optimisation and accelerated value delivery across upstream assets, with a production guidance of 30,000–40,000boepd and trading guidance of 25–35 million barrels crude oil as well as 750,000–1m MT refined products.
