Oando declared N3.5bn profit after tax for 2016 financial year

Oando has announced audited results for the year ended December 31, 2016, with the profit-after-tax gaining 107per cent to N3.5 billion compared to a loss of N47.6 billion in 2015.
The indigenous energy group listed on both the Nigerian and Johannesburg Stock Exchange, on Tuesday announced a turnover that increased by 49 per cent, N569.0 billion compared to N382.0 billion in 2015 while net debt reduced by 35 per cent to N230.6 billion compared to N355.4 billion in 2015.
In 2016, the company in the upstream sector recorded a 20 per cent decrease in total production to 15.9MMboe (average 43,503 boe/day) from 19.9MMboe (average 54,520 boe/day) in comparative period of 2015.
The company said approximately 46 per cent of crude production – as at December 31, 2016, 9,590 bbls/day was hedged at $65/bbl (average) with expiry dates ranging from July 2017 to January 2019, and further upside on the condition of certain price targets being met.
The volatility in oil prices continues to impact the balance sheet of oil companies globally. This is evident in a decline in Oando’s crude oil and natural gas sales in the year ended 31 December, 2016. Unrest in the Niger Delta forced a reduction in Oando’s production, specifically sabotage activities at OMLs 60 to 63 and a Force Majeure on the Qua Iboe terminal, resulting in losses estimated at 11,600bbl/d.
Despite these challenges the company achieved successes in the year as witnessed by an improvement in top line revenue, deleverage of the company’s balance sheet and growth in its business model of higher weighted dollar earnings in both the Upstream and Downstream operations.
Commenting, Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said, “2016 saw the country plunge into a recession, the first in over two decades, besieged with liquidity constraints, devaluation of the naira and a slump in oil earnings due to low oil prices intensified by the insurgency in the Niger Delta.
“We were proactive in the timely execution of our restructuring program of Growth in our upstream division; Deleverage, through divestments resulting in a net debt reduction of N125billion; and Profitability by focusing on dollar denominated earnings.
“In the, upstream we witnessed a decline in production but an increase in our 2P Reserves from 445mmboe in 2015 to 469mmboe. We are hopeful that the federal government will establish a long term resolution to the conflict in the Niger Delta which will positively impact the oil and gas industry, consequently ramping up our daily production.
“In the midstream we concluded the partial divestment of Oando Gas and Power (OGP) to Helios Investment Partners to further expand our gas footprint, whilst in the Downstream our trading business continued to make in-roads in crude lifting.
“As we enter a new phase in our business evolution we are optimistic about 2017 and look forward to even more successes having braved the challenges of 2016.”