JSE-listed Nigerian energy group Oando reported a solid financial footing for the first half of the year on the back of higher oil prices as a direct consequence of increasing demand and lower supply.
Higher oil prices , and the resolution of joint venture funding challenges with the Nigerian National Petroleum Corporation , have driven increased investment in the upstream sector. “This stable operating environment , coupled with Oando’s fiscal prudence, has reinforced our solid financial footing as we continue to build on the momentum garnered in 2017,” confirmed Oando CE Wale Tinubu .
The company’s turnover increased by 11% to N297.3-billion, compared with N267-billion in the first half of 2017. Gross profit increased by 53% to N51-billion, compared with N33.4-billion in the first half of 2017. Profit after tax increased by 86% to N8.5-billion, compared with N4.6-billion in the first half of 2017.
The first half of this year picked up on the back of the industry recovery witnessed in 2017. Brent prices averaged $69.87/bl, resulting in a 38% increase in realised crude selling price compared with the same period in 2017.
Performance was further buoyed by sale price increases of 19% for natural gas liquids and 13% for natural gas deliveries .
Oando Energy Resources recorded a cumulative production of 6.8-million barrels of oil equivalent compared with 7.2-million barrels in the same period of 2017, primarily owing to storage constraints and downtime on Well 7 at the company’s Ebendo field in OML 56.
“We also witnessed reduced gas production due to shut-ins suffered at OML 60 to
Capital expenditure (capex) of $24.7-million, or N8.9-billion, was invested in the first half of the year, compared with $15.9-million, N4.9-billion, in the first half of 2017. This was mainly maintenance capex focused on drilling activities and facilities maintenance , as well as exploration -related activities.
In conclusion, Oando said, this year has witnessed a much healthier oil industry , recovering from the last few years of low prices, enforced capital discipline, productivity efficiencies and portfolio realignments.
“We will continue to drive growth and profitability through our dollar-earning portfolios. Our plans in the upstream involve production growth through investment in targeted profitable projects , while maintaining fiscal prudence, to ensure we
remain less sensitive to short-term price fluctuations.“In our trading business , current plans for growth include expansion of our trading structures in Africa , capitalising on expanding scope in Southern and East Africa , as well as developing key […]