Monday, October 26, 2015 7:31 pm
Oando Energy Resources Limited , part of the giant Oando Plc has released its third quarter results that shows significant improvement over the humongous N184 billion losses incurred in 2014by Oando Plc
Although the company says 2015 continues to pose challenges in terms of the volatility of oil prices, it says it’s working hard to ameliorate the situation, by cutting production and operational costs and renegotiating its debt burden.
According to the statement published on its website, the Corporation had a net loss of $13.1 million in the third quarter of 2015, compared to net income of $89.5 million in the third quarter of 2014.
In the nine months ended September 30, 2015 the Corporation incurred a net loss of $63.5 million, as compared to a net loss of $88.0 million in the same period of 2014.
“The net loss during the third quarter of 2015 was the result of non-cash $98.9 million impairment on assets and a $15.6 million joint venture receivable impairment. During the nine months ended September 30, 2015 the net loss of $63.5 million was primarily the result of $121.2 million non-cash impairment of assets and the joint venture receivable impairment, partially offset by profitable operations at OMLs 60 to 63 and crude oil hedging gains.”
Here are the highlights of the report, prepared for shareholders outside Nigeria and which has not been filed at Nigerian Stock Exchange. Oando Plc third quarter report will surely benefit from the OER report:
Selected Quarterly Results
The table below summarizes selected financial and operational information for the last eight quarters. The Corporation’s quarterly results have been impacted primarily by acquisitions, fluctuating commodity prices, asset impairments, gains and losses on financial instruments, and borrowing activities.
Q32015 | Q22015 | Q12015 | Q42014 | Q32014 | Q22014 | Q12014 | Q42013 | |
Production (boe) | 4,891,579 | 5,179,383 | 4,985,944 | 5,034,358 | 3,248,158 | 413,984 | 408,497 | 406,029 |
Total revenue | 132,512 | 90,240 | 132,415 | 174,042 | 184,777 | 30,440 | 32,163 | 23,976 |
Net Income (loss) for the period | (13,107) | (29,255) | (21,096) | (199,595) | 89,541 | (137,668) | (39,881) | (41,008) |
Earnings per share | (0.02) | (0.04) | (0.03) | (0.40) | 0.12 | (0.24) | (0.14) | (0.32) |
Diluted earnings per share | (0.02) | (0.04) | (0.03) | (0.40) | 0.12 | (0.24) | (0.14) | (0.32) |
Capital expenditures | 22,505 | 19,127 | 37,804 | 41,206 | 52,910 | 24,355 | 42,550 | 45,573 |
Total assets | 2,900,574 | 2,922,598 | 2,971,858 | 3,242,791 | 3,693,880 | 1,662,142 | 1,689,937 | 1,299,422 |
Total non-current liabilities | 1,177,793 | 1,201,823 | 1,033,688 | 1,088,996 | 1,523,019 | 245,925 | 274,812 | 275,195 |
Figures in $’000 unless otherwise stated
Current Outlook
Operationally, 2015 has been a successful period for the Corporation. Production has remained steady throughout 2015 with third quarter and nine months production of 53,169 boe/day and 55,154 boe/day, respectively. The third quarter saw increased production from OML 125 and Ebendo which partially offset net production losses at OMLs 60-63 due to production constraints. The production constraint at OMLs 60 to 63 was caused by a fire at the Corporation’s non-operated Ebocha terminal at the end of June, with production being fully restored to pre-incident levels near the end of July. The restriction of production resulting from the fire was the reason for the slight decrease in production from the second quarter. Throughout the year, the Company has continued to work with its joint venture partners to execute its development program for 2015, which has been scaled back in response to low commodity prices. The current development program is focused on lower risk activities that provide short-term returns.
Financially, we expect 2015 to continue to be a challenging year for the Company and the oil and gas industry as a whole. Global crude oil prices have been volatile and are expected to remain at their current low levels for the remainder of 2015 and into 2016.
In response to the low prices, the Corporation has taken steps to improve its liquidity including pre-paying debt to reduce short-term interest and negotiating advances from joint venture partners to fund a portion of its capital program. Furthermore, in October 2015, the Corporation increased the capacity of the $450 million senior secured facility by $90.7 million using those proceeds to repay the $100 million subordinated debt facility, thereby, extending that obligation over the next 3 to 4 years through the consolidation of loans. The repayment will result in the return of $50 million which was used to as collateral to secure the letter of credit associated with the loan. Going forward, the Corporation will continue to rely on cash from producing assets and financial commodity hedges and plans to secure additional debt financing from Oando PLC in the short-term, in addition to pursuing third party debt and equity financing, as required, to execute on its business plans.
Here is the link to the full report:During the third quarter of 2015 the Corporation made $22.5 million in capital expenditures related to the development of oil and gas assets and exploration and evaluation activities, as compared with $52.9 million in the same quarter of 2014.
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