Oando Eyes Growth With Newly Acquired Assets

Oando Plc has unveiled its 2025 operational outlook, setting ambitious production and trading targets following the successful acquisition of an additional 20 per cent interest in Oil Mining Leases (OMLs) 60–63.

The indigenous energy company, while announcing its audited results for the twelve-month period ended December 31, 2024, on Tuesday, said it is targeting production levels between 30,000 and 40,000 barrels of oil equivalent per day (boepd) as it focuses on post-acquisition integration and accelerated value delivery across its upstream portfolio.

As part of its forward strategy, Oando is also projecting crude oil trading volumes between 25 to 35 million barrels, alongside refined products trading of 750,000 to 1 million metric tonnes.

In the clean energy space, the company plans to launch 50 new electric buses in 2025, in line with Nigeria’s clean mobility and decarbonisation objectives.

Additionally, the company announced it would implement a capital restructuring and liquidity optimisation programme aimed at strengthening shareholder value and long-term financial resilience.

Oando reported robust financial results for the full year 2024, with group revenue rising by 44 per cent year-on-year to ₦4.1tn, compared to ₦2.8tn in 2023.

The growth was driven largely by a stronger performance in the Exploration & Production (E&P) segment and significant foreign exchange gains following the devaluation of the naira (₦1,515.9/$1 in 2024 vs ₦668.6/$1 in 2023).

Crude oil lifted volumes increased by 76 per cent to 3.0 million barrels (2023: 1.7 million barrels), contributing ₦282bn to revenue. However, this was partially offset by an 11 per cent decline in the average realised crude price to $73.91 per barrel (2023: $83.15/bbl).

Natural gas sales also showed moderate growth, with volumes up 2 per cent to 4.7 million boe and revenue reaching ₦85bn. The average realised price improved to $2.14/Mscf from $2.03/Mscf a year earlier.

On the other hand, revenues from Natural Gas Liquids (NGLs) declined slightly due to both lower pricing and reduced volumes.

Despite rising costs associated with the integration of NAOC’s assets, reflected in a cost of sales increase to ₦3.9tn, the company recorded a gross profit of ₦155.8bn, an 84 per cent increase from ₦85bn in 2023.

Oando’s profit after tax surged to ₦220.1bn in 2024, up from ₦60.3bn the previous year. This performance was bolstered by improved operating efficiencies and one-off gains linked to the asset acquisition. As a result, earnings per share (EPS) climbed to ₦18, up from ₦5 in 2023.

Commenting on the results, Group Chief Executive of Oando Plc, Wale Tinubu, 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 its 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.

Tinubu noted that despite a challenging macroeconomic and security environment, the group delivered a 44 per cent revenue increase to ₦4.1tn and a 267 per cent rise in profit after tax to ₦220bn, 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 tcf of gas by 2029, we shall pursue a dual-track approach of rig-less interventions and well workovers, complemented by an aggressive drilling programme. We are excited by the opportunities that lie ahead and remain committed to delivering enhanced shareholder returns and shared prosperity and maintaining our position as a leading player in Africa’s evolving energy landscape,” he said.

Oando Eyes Growth With Newly Acquired Assets is first published on The Whistler Newspaper