Yemisi Izuora
Oando Energy Resources (OER), a company focused on oil and gas exploration and production in Nigeria today released its financial and operating results for the three and nine months ended September 30, 2015.
During the nine months ended September 30, 2015 revenues increased to $355.2 from $247.4 million in the same period of 2014, which was attributed to the acquisition of the ConocoPhilip (COP) producing assets.
It also noted that revenues in the third quarter 2015 increased $42.3 million from $90.2 million realized in the second quarter of 2015.
The company further stated that quarter to quarter increase was mainly the result of a portion of second quarter production not being sold until early July 2015 (with a market value of $23.6 million) to accommodate changes to customer lifting schedules.
The OER hedged 9,689 bbls/day of crude oil production at $65/bbl (average) with expiries ranging from July 2017 to July 2019 and further upside if certain price targets are met. The hedges represented 43% of third quarter production rates of crude oil.
Commenting on the result, Pade Durotoye, CEO of Oando Energy Resources Inc said, “In the face of lower and increasingly volatile crude oil prices, we continue to carefully manage costs and execute low Capex activity that optimize our overall production base whilst benefiting from our hedging strategies,”
“Despite the unfortunate operational incidents that temporarily impacted production in July, Oando delivered total production levels of 4.9 MMboe, an average production level of 53,169 boe/day thanks to quick bypass and recovery systems executed by the Operator and our diverse portfolio of producing assets.
We remain committed to working with our joint venture partners to further consolidate the assets we acquired last year and optimize production, whilst also continuing to implement cost reduction strategies and prudently manage our balance sheet.”
Also, in the third quarter of 2015 production increased to 4.9 millilon barrels of oil equivalent (MMboe) (average 53,169 boe/day) from 3.2 MMboe (average 35,307 boe/day) in the third quarter of 2014.
During the nine months ended September 30, 2015 production increased to 15.1 MMboe, compared with 4.1 MMboe in the same period of 2014.
The increase between the 2015 and 2014 year-to-date periods is primarily the result of the Nigerian onshore and offshore assets acquired on July 30, 2014 from the ConocoPhillips Company (COP) that included substantial production from OMLs 60 to 63, significant reserves and resources, and a considerable base of development and exploration opportunities.
Third quarter 2015 production was a slight decrease from 5.2 MMboe (average 56,917 boe/day) achieved in the second quarter of 2015. Crude oil production increased by 0.2MMboe, however the net decrease was attributed to a 0.5MMboe reduction in natural gas and NGL production (caused by the Ebocha Flowstation incident).
However, net revenue was $132.5 million in the third quarter of 2015, a decrease of $52.3 million from $184.8 million generated in the third quarter of 2014, resulting from the significant decrease in crude oil prices, which was partially offset by the production increase between the periods.