Oando Nigeria Plc has announced a profit after tax of N4.6 billion in its half-year operation against the N26.9 billion lost posted in the corresponding period of 2016.
Specifically, the company’s unaudited result for the six months ended June 30, 2017 showed a 117 per cent profit margin. Similarly, turnover increased by 26 per cent to N267.1 billion from the N212.3 billion achieved the previous year.
According to a statement, the first half of 2017 witnessed the country’s production levels steadily recovering. The company attributed the improved performance to the containment of the Niger Delta unrest and the recent resumption of activity on the Trans Forcados pipeline.
It noted: “There is optimism over the approval of the Petroleum Industry Governance and Institutional Framework Bill (PIGB), which should result in a more efficiently regulated sector and a conducive business environment for industry players.”
A further breakdown of the result indicates that gross profit rose from N19 billion to N33.4 billion, a 76 per cent increase. However, the firm said its upstream production during the period under review fell by 20 per cent to 7.2 million barrels from 8.2 million output achieved in 2016, while a 72 per cent improvement in revenue was achieved in the downstream sector, from N126.6 billion to N217.4 billion.
The company’s Group Chief Executive, Wale Tinubu, said: “Niger Delta receding, oil output, while the legislative approval of certain segments of the Petroleum Industry Bill (PIB) provides greater long-term policy certainty for the sector. The returns underline our continued successful foray into the upstream.”
“Within the prevalent crude pricing regime, we remain committed to optimising our overall production base, seeking unique profit-driven opportunities to further partner with IOCs, while firming up our balance sheet to provide greater shareholder value.”
He noted that Oando Energy Resources (OER) recorded an average production of 39,950 barrels of oil equivalent (boe/day) compared to the 44,892 boe/day in the first half of 2016.
According to him, the reduction was due to significant reductions in gas production and delivery caused by a ruptured Gas Transmission System (GTS-4) gas line, which supplies its contractual product to the Nigerian LNG Limited (NLNG).
Tinubu went on: “Also, the Trans Forcados pipeline continued to suffer downtime in the first five months of the year. And repairs and planned maintenance resulted in reduced production from Ebendo.
“In June 2017, the company successfully realised N3.2 billion in net cash from the crystallisation of the Corporate Facility hedges (1,590 bbls/day) via early settlement with hedging counterparties – N3.5 billion relating to settlement of hedges offset against N336.5 million representing the cost of the planned reset, which will be utilised in paying down our existing debt obligations. OER is also in the process of entering a new hedge agreement effective July 2017.
“In the second quarter of 2017, the company successfully completed the sale of its interests in OMLs 125 and 134 to Nigerian Agip Exploration Limited “NAE” for a profit of N4.6 billion.”