All companies listed on the Nigerian Stock Exchange will be expected to have submitted their Q3, 2019 results by the end of business on Thursday 31st October; so far volatility in the economic and business climate has impacted negatively on the earnings of some companies.
An ongoing narrative across board has been poor sentiment for equities; specifically equities have been dragged down by weaker macroeconomic indicators, which has stifled earning expectations and increased appetite for debt securities.
Against this backdrop Oando PLC published its financial results for the month ended September 2019, posting another profit. Without a doubt 2019 has been another challenging year for the company, not just in terms of external factors beyond its control but an ongoing conundrum with the regulator.
Despite this the company’s results show that a management team that has worked aggressively to maintain a trend of positive results reflected in higher production and profit after tax.
An analysis into the company’s financials for the month ended September 30, 2019 shows that its turnover decreased by 18% to N413.8billion compared to N505.1billion in same period of 2018; total borrowing decreased by 8% to N193.1bn from N210.9bn in comparative period of 2018 while its production grew by 8% to 43,045 boe/day from 40,039 boe/day in Year-to-Date (YTD) September 2018.
The increase in production was driven by an 11% increase in natural gas production and an 8% increase in crude oil production.
To cap this, Oando recorded a profit after tax of N13.1bn a 26% increase from N10.4bn in same period of 2018. A review of the company’s activities in YTD ended September 2019 shows proactive work to drive increased revenue in the medium term.
To this end Oando recently announced that the NNPC/NAOC/OANDO Joint Venture (of which Oando Energy Resources, the upstream subsidiary of Oando PLC, holds a 20% 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.
In its statement, 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.”
Also on a positive note Oando through its upstream subsidiary reduced its existing Senior Secured Facility to a balance of approximately $0.4 million.
This $450 million facility constituted a portion of a total of $900 million in debt raised towards the Company’s $1.8 billion acquisition of Conoco Phillips Nigerian business in 2014.
The hope is that the company will sustain the momentum and continue on this winning streak in the final quarter of the year and positively impact the Capital Market and stakeholders alike.
