Official: Oando Acquires Medal Oil Giving It 100% Ownership of OML 131

Oando today released this statement;

Oando Energy Resources Inc. (“Oando Energy Resources” or the “Company”) (TSX: OER), a company focused on oil and gas exploration and production in Nigeria, today announced that it has completed the acquisition of Medal Oil Company Limited (“Medal Oil”). The purchase price of US$5,000,000 was satisfied by the issuance of 3,491,082 units, each unit consisting of one common share of the Company and one-half of one warrant to purchase an additional common share at a price of C$ 2.00 per common share for a period of 24 months from the date on which the Company closes the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips the (“CoP Acquisition”). Medal Oil holds a 5% interest in OML 131. Upon completion of the CoP Acquisition, OER will own a 100% interest in OML 131.

This deal basically gives Oando 100% control of OML 131 which is the asset acquired in the COP deal. Medal Oil owned held 5% interest in OML 131 out of which OER already acquired from ConocoPhiliips. Oando Nigeria earlier this month converted debt to equity taking its ownership of Oando Energy Resources to 93%. I am surprised Oando announced the deal was completed already when one part of the purchase consideration will be paid 24months after the completion of the COP deal. Oando’s share price was down 3.2% to N25.7 by mid day trading.

Oando released a flurry of tweets to explain the benefits of the deal.