Economy
Oando Cuts Debt Levels by 8%, Raises PAT by 26% in Q3
By Modupe Gbadeyanka
The management of Oando Plc under the leadership of Mr Wale Tinubu has continued to show that he has the ability to turnaround fortunes of the leading indigenous energy group in Nigeria.
The energy firm, listed both on the Nigerian and Johannesburg Stock Exchange, announced its unaudited results for the nine months period ended September 30, 2019 and from the highlights, it declared a 26 percent rise in profit after tax, which went up to N13.1 billion from N10.4 billion despite the total generated revenue going down by 18 percent to N413.8 billion from N505.1 billion, with the operating profit going down by 31 percent to N19.8 billion from N28.7 billion.
However, due to the strategies mapped out by the board and management, Oando was able to reduce its total borrowings by 8 percent to N193.1 billion from N210.9 billion, while the production increased by 8 percent to 43,045boe/day from 40,039boe/day.
This was driven by an 11 percent increase in natural gas production (from 120,047mcf/day YTD September 2018 to 133,415mcf/day YTD September 2019) and an 8 percent increase in crude oil production (from 16,850bbls/day YTD September 2018 to 18,147bbls/day YTD September 2019).
In YTD September 2019, Oando Trading traded approximately 9.3 million barrels of crude oil under various contracts with the Nigerian National Petroleum Corporation (NNPC) and delivered 317,649MT of refined products.
It incurred capital expenditure of $84.3 million in the nine months of 2019 compared with $59.3 million in same period in 2018. This consists of $77.3 million at OMLs 60 to 63, $5.6 million at OML 56, and $1.4 million on other assets.
During the year, the company, in conjunction with its JV partners, aggressively ramped up its drilling program towards increasing oil revenue and meeting gas obligations and as at September 2019, it has successfully completed a side track at OML 56, shoring up net production by nearly 1,500bbls/day, whilst also drilling and completing five wells across three rig lines at its joint venture operations on OMLs 60-63.
Recall that last month, Oando announced that the NNPC/NAOC/OANDO Joint Venture (of which Oando Energy Resources [OER] holds a 20 percent working interest) had made a significant gas and condensate find in the deeper sequences of the Obiafu-Obrikom fields in OML 61, onshore Niger Delta.
Preliminary evaluation indicates that the find amounts to about 1 trillion cubic feet of gas and 60 million barrels of associated condensate in the deep drilled sequences.
The well can deliver in excess of 100 million standard cubic feet/day of gas and 3,000 barrels/day of associated condensates. The discovery is part of a drilling campaign planned by the Joint Venture aimed at exploring near-field and deep pool opportunities as immediate time to market opportunities.
The JV started gas and condensate production from the Obiafu-41 discovery just 3 weeks after completion and the gas from this discovery will largely be channelled to the domestic market in order to feed the power sector.
Oando said the full impact of this discovery will be determined and communicated to the market on conclusion of the next annual independent reserves and resources evaluation.
Commenting on the results, Mr Tinubu said, “In the period under review, we made substantial progress on our top priority of operational growth and recorded an 8 percent increase in hydrocarbon production.
‘In conjunction with our partners, we successfully completed an ambitious 6-well drilling program, the results of which have been positive, and are particularly excited about the discovery of a significant gas and condensate find at a field in OML 61 of our Joint Venture.
“This has had a major impact on our reserves and consequently future cash flows. Production has since commenced in October on the completed wells, and the gas will largely be channelled to feed the nation’s power sector through our Joint Venture’s Okpai Power plant, Nigeria’s first independent power plant.
“In addition, we achieved an 8 percent reduction in our debt levels, whilst growing free cash flows. Over the last quarter of the year, our focus will be on the completion of our drilling program as well as tie-in of the new discoveries.”
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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