Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Content Partners
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Get Data
    • Macro-Economic News
    • Research Analysis
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Opinions Blurb

Oando: Why You Should Expect A Profitable 2016 – Rencap

Nairametrics by Nairametrics
April 1, 2016
in Blurb, Business News
Share on FacebookShare on TwitterShare on Linkedin

Oando Energy Resources (OER) released its FY15 results, reporting a net profit for the first time in two years. We see progress in 2015 operations with a reduced operating cost, but overall view the results as neutral. In addition, the outside date for the OER-Oando Plc deal was extended to 29 April, where Oando will acquire all of OER’s outstanding shares for $1.20/share (CAD1.55/share). As we are of the view that the deal will close at this deal price, we maintain our HOLD rating and CAD1.40 TP.

FY15: $16mn net profit

OER reported a net profit of $16mn for FY15, supported by an income tax recovery of $65.6mn and reduced impairment charges in comparison to 2014. We appreciate that OER was able to maintain a strong production of 55kboe/d in 2015, reduce its debt outstanding by 61% YoY and reduce opex to $11.9/boe, from $12.6/boe in 2014. However, we remain cautious on the stock especially at these low oil price levels and given all the structural changes and lender approvals the group is undergoing. In addition, OER obtained pioneer tax status on its gas production from OMLs 60-63 and on its production from OML 13.

RelatedPosts

Oando Holds Successful 43rd AGM: All Resolutions Passed

Higher crude oil prices boost Nigeria’s Oil and Gas stocks

Outlook for 2016

In 2015, management guided for a capex spend of $141mn but only spent $87.7mn; For 2016, we expect flat or slightly reduced production because OER did not spend capex on drilling but on production optimisation, which we expect to continue in 2016. If both deals currently on the table (the OER-Oando Plc deal and OMLs 125 & 134 deal) are approved, OER will sell OMLs 125 and 134 to its operator for a cash consideration of $5.5mn and become a private subsidiary of the group (Oando Plc). The sale of OML 125 is mainly due to its high capex obligations, little upside at current oil prices and zero tax benefits. We do not expect significant impairment charges for 2016 and expect a profitable year, helped by the company’s c.58% of oil production hedged at $65/bbl.

Delisting from the Toronto Stock Exchange (TXN) 

Oando, which currently owns 93.7% of OER, is set to acquire the remaining 6.3% of OER shares outstanding, for CAD1.55/share. The outside date has been extended to 29 April 2016 and is subject to approval by OER’s two facility lenders. After final approval of the deal, OER will be delisted from the TXN. OER has not benefitted from the listing on the TXN and has only endured the cost downside. Management has guided that the delisting will save c. $7-10mn in costs annually.

Source: Rencap

News continues after this ad


Related

Tags: Oando Plc

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

inq
avatrade
Stanbic bank
Mega Millions
UBN
Hot forex
Access Bank
Bankers Committee
First bank






    Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

    Recent News

    • Gains from MTN not enough to stop Nigeria’s stock market from shedding N95 billion
    • ChamsSwitch gets Visa recognition, enlisted on Visa Global Registry
    • 3 ways to solve electricity crisis in Nigeria – Atiku Abubakar

    Follow us on social media:

    Recent News

    Stock News

    Gains from MTN not enough to stop Nigeria’s stock market from shedding N95 billion

    August 19, 2022
    ChamsSwitch gets Visa recognition, enlisted on Visa Global Registry

    ChamsSwitch gets Visa recognition, enlisted on Visa Global Registry

    August 19, 2022
    • ABOUT US
    • CONTACT US
    • PRODUCTS
    • ANDROID APP
    • iOS APP
    • DISCLAIMER
    • CAREERS
    • PRIVACY POLICY

    © 2022 Nairametrics

    No Result
    View All Result
    • Home
    • Exclusives
      • Financial Analysis
      • Corporate Stories
      • Interviews
      • Investigations
      • Metrics
    • Markets
      • Cryptos
      • Commodities
      • Equities
        • Dividends
        • Stock Market
      • Fixed Income
      • Market Views
      • Securities
    • Industries
      • Company News
      • Consumer Goods
      • Content Partners
      • Corporate deals
      • Corporate Press Releases
      • Energy
      • Entertainment
      • Financial Services
      • Hospitality & Travel
      • Manufacturing
      • Real Estate and Construction
      • Tech News
    • Economy
      • Get Data
      • Macro-Economic News
      • Research Analysis
    • Business News
    • Financial Literacy
      • Career tips
      • Personal Finance
    • Lifestyle
      • Billionaire Watch
      • Profiles
    • Opinions
      • Blurb
      • Op-Eds

    © 2022 Nairametrics

    Social Media Auto Publish Powered By : XYZScripts.com