CORPORATE PROFILE
March 2019 This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Oando PLC (the “Company”) shares or other securities.
This presentation includes certain forward looking statements with respect to certain development projects, potential collaborative partnerships, results of operations and certain plans and objectives of the Company including, in particular and without limitation, the statements regarding potential sales revenues from projects, both current and under development, possible launch dates for new projects, ability to successfully integrate acquisitions or achieve production targets, and any revenue and profit guidance. By their very nature forward looking statements involve risk and uncertainty that could cause actual results and developments to differ materially from those expressed or implied. The significant risks related to the Company’s business which could cause the Company’s actual results and developments to differ materially from those forward looking statements are discussed in the Company’s annual report and other filings. All forward looking statements in this presentation are based on information known to the Company on the date hereof. The Company will not publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise, other than is required by law.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. All estimates of reserves and resources are classified in line with the European Securities and Markets Authority (ESMA/2013/319). All estimates are from Independent Reserves Evaluator Report having an effective date of 31st December 2018.
BOEs [or McfGEs, or other applicable units of equivalency] may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl [or an McfGE conversion ratio of 1 bbl: 6 Mcf] is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Reserves: Reserves are volumes of hydrocarbons and associated substances estimated to be commercially recoverable from known accumulations from a given date forward by established technology under specified economic conditions and government regulations. Specified economic conditions may be current economic conditions in the case of constant price and un-inflated cost forecasts (as required by many financial regulatory authorities) or they may be reasonably anticipated economic conditions in the case of escalated price and inflated cost forecasts.
Possible Reserves: Possible reserves are quantities of recoverable hydrocarbons estimated on the basis of engineering and geological data that are less complete and less conclusive than the data used in estimates of probable reserves. Possible reserves are less certain to be recovered than proved or probable reserves which means for purposes of reserves classification there is a 10% probability that more than these reserves will be recovered, i.e. there is a 90% probability that less than these reserves will be recovered. This category includes those reserves that may be recovered by an enhanced recovery scheme that is not in operation and where there is reasonable doubt as to its chance of success.
Proved Reserves: Proved reserves are those reserves that can be estimated with a high degree of certainty on the basis of an analysis of drilling, geological, geophysical and engineering data. A high degree of certainty generally means, for the purposes of reserve classification, that it is likely that the actual remaining quantities recovered will exceed the estimated proved reserves and there is a 90% confidence that at least these reserves will be produced, i.e. there is only a 10% probability that less than these reserves will be recovered. In general reserves are considered proved only if supported by actual production or formation testing. In certain instances proved reserves may be assigned on the basis of log and/or core analysis if analogous reservoirs are known to be economically productive. Proved reserves are also assigned for enhanced recovery processes which have been demonstrated to be economically and technically successful in the reservoir either by pilot testing or by analogy to installed projects in analogous reservoirs.
Probable Reserves: Probable reserves are quantities of recoverable hydrocarbons estimated on the basis of engineering and geological data that are similar to those used for proved reserves but that lack, for various reasons, the certainty required to classify the reserves are proved. Probable reserves are less certain to be recovered than proved reserves; which means, for purposes of reserves classification, that there is 50% probability that more than the Proved plus Probable Additional reserves will actually be recovered. These include reserves that would be recoverable if a more efficient recovery mechanism develops than was assumed in estimating proved reserves; reserves that depend on successful work-over or mechanical changes for recovery; reserves that require infill drilling and reserves from an enhanced recovery process which has yet to be Disclaimer established and pilot tested but appears to have favorable conditions.
2 About Oando PLC
3 Oando Overview
A TRULY INDIGENOUS NIGERIAN OIL & GAS PLAYER CORE ACTIVITIES
GAS & EXPLORATION & PRODUCTION TRADING MARKETING POWER ~ 40 kboepd ~7% >300 163Km FYE 2018 of Nigeria’s Fuel Requirement Retail outlets operations Production is Supplied by Oando in Nigeria, Ghana, Togo Pipeline Network
CAPITAL MARKETS PUBLIC LISTINGS
MARKET CAPITALIZATION ENTERPRISE VALUE PRIMARY LISTING SECONDARY LISTING ~$ M $ M 193 742 Johannesburg Stock Exchange FINANCIAL OVERVIEW UPSTREAM INFRASTRUCTURE
22,447Km2 483 Kbopd 3,663 mmscf/d $1,949.2M $117.1M $75.1M Combined Acreage Oil Handling Capacity Gas Handling Capacity OVER FYE 2018 FYE 2018 FYE 2018 3.5 km REVENUE OPERATING PROFIT NET PROFIT mmbbls 1,255 14 Terminal Capacity Pipeline Network Flow Stations
FYE 2018 Production of 40,023 boepd 4 Market Capitalization and Enterprise Value dated as at 25 March 2019 Oando holds a stake in Marketing (5%) and Gas & Power (25%) Asset Overview
Exploration & Production Trading Marketing Gas & Power
DESCRIPTION Leading indigenous Oil & Experienced international Leading Oil & Marketing First private sector Gas producer in Nigeria commodities supply and Retailer company to enter gas trading company distribution in Nigeria
OPERATIONAL 6 Producing Assets Trading desks and 300+ retail outlets in 2 Gas Pipeline franchises: ASSETS 2 operations in Nigeria, Nigeria, Ghana & Togo 22,447km Combined GNL: 146km Lagos (110 Acreage South Africa, East Africa & Dubai 7 terminals (110ML) mmscf/d Capacity) 483 kbopd Oil Handling 3 Aviation fuel depots CHGC: 17km East Capacity Trading desks in the 3,663 mmscf/d Gas 3 lube blending plants United Kingdom & (130m litres/annum) Handling Singapore Compressed Natural Gas: 3.5mmbbls Terminal 7 LPG filling plants 5mmscf/day capacity Capacity 1,255km Pipeline Network 14 Flowstations
5 Oando holds a stake in Marketing (5%) and Gas & Power (25%) Oando Investment Case
6 Why Invest in Oando?
LARGE LEADING EXPERIENCED INDIGENOUS E&P PLAYER COMPETITIVE POSITION MANAGEMENT TEAM
Oando Energy Resources has Its indigenous status Led by a highly skilled and evolved to become one of the positions the Company at experienced management largest independent exploration the forefront to benefit from team as well as a young and and production companies in planned and on-going Oil & dynamic labor force boasting Nigeria with an average Gas sector reforms. a successful track record and production of 40kboepd (FYE a wealth of relevant Oil & 2018) with 2P Reserves of Gas knowledge across the 480MMboe and 2C Resources full spectrum of the industry. of 147mmboe* 1 2 3 PROVEN STRONG TRACK RECORD OF PROJECT FINANCING CAPABILITY DELIVERY Oando boasts of a long history The company has of delivering key infrastructure successfully raised $3.5bn in projects which have changed debt and equity over the past the landscape of the oil and 7 years which have funded gas industry in Nigeria. 4key projects 5 6 7 *2C Resources yet to be updated for 2018 Experienced Management Team OER
Wale Tinubu has pioneered the execution of world-class Omamofe Boyo is a Director of Oando Energy Resources Independent initiatives in the region as an ethical business leader, as well as the Deputy Group Chief Executive of Oando plc. entrepreneur and philanthropist. As well as being Chairman Before taking up this position, he doubled as the Executive Auditors and Director of Oando Energy Resources, he Co-founded Director, Marketing of Oando plc and CEO of Oando Ocean & Oil Group in 1994 and has been the Group Chief Supply & Trading. Between 2004 and 2006, he Executive of Oando plc since 2001. In 2002, he led the transformed Oando Supply & Trading into Africa’s largest largest ever acquisition of a quoted Nigerian Company, private sector trading company. Agip. Wale Tinubu Omamofe Boyo Group Chief Executive Deputy Chief Executive
Independent Femi Adeyemo is the Chief Financial Offer of Oando PLC. Mr. Zubairu is a highly respected leader with 26 years Reserves Evaluator Femi has extensive experience in Strategic Consulting progressive experience in the financial services industry. His especially in areas of Mergers and Acquisitions (M&A), experience and achievements cover key aspects of Banking, operations reviews, strategy development and including International Banking, Treasury Operations, Retail, implementation as well as organization redesign and Corporate and Commercial Banking. He was until recently, a financial management. Deputy General Manager and Group Head Commercial Banking North, at Access Bank Plc. Prior to joining Oando PLC, Femi was the Associate Principal, McKinsey Incorporated, one of the world’s Prior to working with Access Bank, Mr. Zubairu worked at Femi Adeyemo leading consulting firms. Femi was also the Financial Muntari Zubairu various times as Group Head Retail Banking and Public Controller/Head of Operations at First Securities Discount Chief Corporate Sector at First Bank (2010-2017), Group Head Commercial Chief Financial House (FSDH), as well as PwC as an Investment Banking and Divisional Head Public Sector at Diamond Bank Officer Services & Operations Banker/Auditor. Officer (1998-2010), and at FSB International Bank (1995-1998) and Citibank Nigeria (1992-1995) amongst other leadership roles.
Ayo Adeogun is the Chief Executive Officer of Oando Refinery Ainojie Irune is the Chief Operating Officer, Oando Energy Plc. Ayo has been a valuable contributor to many key Resources (OER). Prior to assuming this role in 2018, he was transformational projects and processes including restructure of the Chief Strategy & Corporate Services Officer at Oando Oando Marketing, OES Passion Rig refurbishment, PLC from 2016 – 2018. He also served as the Head of construction of the Apapa Island Jetty and various process Corporate Communications from 2013 – 2016, where he improvement initiatives in Procurement and IT&S. oversaw all internal and external brand-building efforts across the company’s business entities. Prior to joining Oando PLC, Ayo worked for Ocean & Oil Holdings in 2004 as SVP Corporate Development and moved Ayo Adeogun Prior to his time at Oando PLC in 2011, Alex worked in the to Oando in November of same year. Since then he has Ainojie “Alex” Irune garnered a wide and deep understanding of the entire Oando United Kingdom as an In-Vehicle Systems Designer with Chief Executive Officer, Chief Operating Officer, Nissan, Honda, and Jaguar Land Rover. Oando Refinery business, working in senior sales and leadership roles in OMP, through asset development roles in the downstream sector to OER system and process optimisation across the Group supply chain.
8 Experienced Management Team OER
Ms Jagun, is the Company’s Chief Compliance Officer and Ngozi Okonkwo is the Chief Legal Officer of Oando PLC. Independent Company Secretary of Oando PLC. She is an experienced Before assuming this role, she was Head, Legal Services of Auditors lawyer with over 22 years of experience, starting her career the company, responsible for legal supervisory oversight over with Chief Rotimi Williams Chambers, working on corporate the two upstream entities in Group, one downstream entity law, mergers and acquisitions, commercial law, civil and all projects at the parent company level. litigation, and intellectual property. Prior to joining Oando PLC, Ngozi worked with F.O Akinrele Prior to joining Oando PLC, Ms. Jagun worked as General & Co. as Junior Counsel and KPMG Professional Services Counsel and Corporate Secretary at Capital G Limited, a (previously known as Arthur Andersen) as Manager in the Ayotola Jagun financial services Group based in Bermuda and as Senior Ngozi O konkwo Tax, Regulatory and People Services unit and Head of Chief Compliance & Corporate, Risk & Control Manager at Citigroup in Chief Legal indirect tax services, providing advice and compliance Governance Officer Bermuda. Officer services to oil and gas and independent power producing companies and provision of legal secretarial services to Independent private oil service companies. Reserves Evaluator
Ima Ofulue is the Chief Human Resource Officer of Oando Plc. Ima has over 14 years experience gained in Human Resource Management.
Prior to joining Oando PLC, Ima has a wealth of experience gathered from companies such as Northwestern Mutual Financial Network, Halliburton and FMC Technologies. Ima Ofulue Chief Human Resource Officer
9 Proven Track Record of Project Delivery
$1.6Bn 45,000 228 KM DWT Acquisition of Midstream Jetty and Gas Pipeline ConocoPhilips sub-sea pipeline Network Nigeria Business commissioned Commissioned
22.55 MW 1ST of Independent African company to Power Plant Capacity achieve a cross-border Commissioned listing on the JSE
10 Production & Reserve Growth
PRODUCTION (kboepd) 55 50 44 40 40 40 30 251 20 10 4 4 0 2013 2013 2014 2015 2016 2017 FYE 2018
2P RESERVE (mmboe)
500 469 471 480 450 420 445 400 350 300 250 231 200 150 100 50 15 19 0 2012 2013 2013 2014 2015 2016 2017 2018 Post Conoco Phillips Acquisition
11 Volumes stated at Year End based on independent estimates Strong Financing Track Record...
bn $ debt&equityraised 3.5overthepast7years
2010 2013 2014 2015 2016
$140Million $341Million $1.6Billion $250 Million $210 Million Rights Issue, Rights Issue, Acquires Conoco Successful Rights Helios & Vitol 128% 101% Subscribed Philips Nigerian Issue Downstream Over Subscribed business investment
$200 Million $115.8Million Private Placement Helios Midstream to consortium of investment private investors
12 Financial Performance
13 FYE 2018 Financial Performance
SOLID FINANCIAL STANDING
NET REVENUE GROSS PROFIT OPERATING PROFIT
-8% -36% $1,949.2M 22% $261.5 M $117.1M VS VS VS FYE 2017: FYE 2017: FYE 2017: $1,603.0 Million $283.9 Million $182.7 Million
NET INCOME CASH & BANK NET DEBT
-14% $75.1M 18% $30.0M 37% $549.4M VS VS VS FYE 2017: FYE 2017: FYE 2017: $63.7 Million $21.9 Million $637.0 Million
14 Historical Financial Performance
$’ M FY-16 FY-17 FY-18 Oando had good resilience through the downturn and Net Revenue 1,739.26 1,603.0 1,949.2 is now in a strong and Gross Profit 109.96 283.9 261.5 healthy position to benefit from the current cycle Operating Profit (27.63) 182.7 117.1 Net Income 14.93 63.7 75.1 Non-current Assets 2,625.70 2,589.9 2,596.1 Cash & Bank 34.07 21.9 30.0 Short Term Debt 473.70 382.6 68.3 Long Term Debt 333.25 276.4 211.1 Total Equity 630.64 731.1 756.9
15 Consistent Debt Reduction Over the Years
GROUP TOTAL DEBT AT QUARTER END ($USM)
3000 Reduction in 2,504 Group Debt 2500 % 2,000 YE 2014 & YE 2018
n 77 2000 o i l l i M ’ 1500 $ S U 1000 828 660 579 500
0 2014 2015 2016 2017 2018
16 Exploration and Production
17 Asset Portfolio
Lagos ASSET W.I. OPERATOR Nigeria OML 90 OML 60 20% ENI/NAOC OML 60 OML 56 OML 61 20% ENI/NAOC OPL 321 OML 61 Cameroon OPL 323 OML 62 20% ENI/NAOC OML 62 Port Harcourt OML 63 20% ENI/NAOC
Douala OML 63 OML 13 OML 56 42.75% Energia OML 122 (Qua Ibo Field) OML 13* 40% Network E&P OML 131 OML 145 Equatorial Guinea ASSET W.I. OPERATOR OML 90* 40% Sogenal EEZ Block 5 OML 122* 5% Oil, 12% Gas Peak
São Tomé ASSET W.I. OPERATOR and Príncipe EEZ 5 20% Kosmos Production Phase EEZ 12 22.5% Kosmos EEZ Block 12 Development Phase OPL 321& 323 30% OER Exploration Phase Gabon OML 131 100% OER *OER is Technical Partner OML 145 21.05% ExxonMobil
18 An Overview of Our Business
Production Infrastructure 55 50 44 2 40 40 22,447Km 483 3,663
) 40 Kbopd mmscf/d d
p 1 Combined Oil Handling Gas Handling e 30 o 25 Acreage Capacity Capacity b k ( 20 10 4 OVER 0 3.5 1,255km 2013 2014 2015 2016 2017 2018 mmbbls 14 Terminal Capacity Pipeline Network Flow Stations 2018 Production4 2018 Revenue2,5
NGL Others 3 8% 3% Oil Oil Gas 80% 42% 15% Our CSR Impact $ 40,023 NGL 407.0 BOEPD MILLION Gas 2% 50% OVER ~ $ Million 340 130 Projects Investment Executed 2P Reserves 2C Resources
NGL 4% Oil Oil 36% 54% 6 OVER 479.8 146.9 ~12Million 400 MMBOE MMBOE Gas Lives Impacted Communities 60% Gas 46%
1 - Conoco Phillips Nigerian business acquired 2 - Revenues are net of Royalties 3 - ‘Others’ include revenue from power sales at the Kwale-Okpai IPP as well as oil transportation tariffs 19 4 - FYE 2018 production split: Oil 42%, Gas 50%, NGL 8% 5 - FYE 2018 revenue split: Oil 81%, Gas 14%, NGL 2%, Others 3% 6 - 2C Resources are yet to be updated for 2018 Strategic Outlook
EXPLORATION & PRODUCTION
Production Reserves kboepd mmboe 100 by 2021 500by 2021
Grow Production: Organic 25% + Inorganic 75% Derisk existing resources portfolio and bring both existing and new assets on-stream Production enhancement initiatives Leverage on alternative funding opportunities Service contract initiatives Gas opportunity and monetization Merger and acquisition opportunities as well as marginal field bid rounds Grow Reserves Near fields/infield exploration and acquisition Liquidity Management Hedge against price risk Debt restructuring
Operatorship Actively seek operatorship in a producing asset and be active non-operators on others
20 Trading
21 Oando Trading Overview
Established, experienced trader of Pan-African, crude oil and petroleum products whose regular counterparts are major oil companies and trading houses
% million 100 30 bbls of crude 1.4 million Subsidiary of Oando Operations in Nigeria, Traded through propreitary Metric Tonnes of refined Plc London, UAE, South Africa & JV contracts products traded
% $ m 7of Nigeria’s fuel $1.3bn 700 Requirement supplied Dollar denominated 2017 Turnover Secured credit lines from by Oando Trading earnings to drive a pool of First Class profitability International Banks
22 Operational Overview and Partnerships
FY-16 FY-17 FY-18 Crude Oil (Bbls) 13,938,078 15,132,740 14,187,897 Refined Products (MT) 1,396,914 826,196 739,876
OTD Trading Partners OTD Banking Partners
23 Strategic Outlook
TRADING Dollar denominated earnings to drive profitability
Immediate Term (2017 – 2018) Maintain existing flows and further develop position/role in Nigerian and West African oil markets Commence market re-entry in Southern and East Africa
Medium Term (2019 – 2020) Establish Southern African presence, whilst further increasing geographical presence across East Africa Build Equity/WC levels beyond $35m as the Africa growth effort intensifies
Long Term (2020 – 2022) Attract new forms of debt (and equity) in order to fund the next critical stage of development.
24 Equity Plays: Marketing and Gas & Power
25 OVH Energy: Downstream Market Leadership Position
Terminals LubesBlending 7 2 Plants Sokoto Kano Over 151M Litres capacity 55m Litres active capacity
Maiduguri Aviation Dutse Damaturu 3 Depot 8 FilingDepot 3,000MT Combined Capacity Kaduna Bauchi LPG filling depots with 700MT storage capacity Jos ~ Trucks Minna 1,800 Yola Abuja Ilorin Jalingo Retail Through partnerships with > several transporters 300 Outlets Oshogbo Ibadan Lokoja In Nigeria, Ghana & Togo Abeokuta Markudi
DWT Lagos 45,000 Enugu Benin City Midstream jetty and Asaba subsea pipeline Umuahia Owerri Calabar Uyo Port Harcourt
Oando Owned LPG Lube Blending Filling Plants Plants Terminals
26 Axxela: Expanding Gas & Power Portfolio
Gaslink A ela Nigeria Leading gas and power Limited solutions provider
Central km Horizon Gas 163 Company Pipeline Network
scm/day 150,000 Gas Network Services Compressed Natural Gas Facility Limited
27 Axxela: Asset Overview
chCentral Horizon Gas cCompany GNS
Gaslink Nigeria Central Horion Gas Network Ltd Gas Company Services
Location Lagos State Port Harcourt Rivers State Lagos State Pipeline / Plant 146km 17km 5mmscfd
Client >140 industrial customers Over 10 industrial customers Nigerian Breweries Operations 2000 2011 2011 Contract Structure Exclusive franchise for gas 30-year exclusive franchise Retail & B2B distribution in Greater Lagos Contract Economics End User Gas price currently End User Gas price currently End User Compressed Natural $7.62/mscf with annual inflation $7.62/mscf, with annual inflation Gas price comprises of: indexation indexation - Input Gas Price - Compression Charge Gaslink earns Operations & 35% Operations & Maintenance - Transportation Charge Maintenance tariff and Capital earnings - Storage Charge Recovery tariff Shell takes 65% for gas supply Customers subject to 90% take and existing infrastructure or pay gas offtake development Capital Expenditure $150MM $10MM $15MM Incurred
28 Corporate Social Responsibility
29 Corporate Social Responsibility
Background As an integral part of Oando Plc’s responsible business culture, corporate social responsibility has been enshrined as one of our key focus areas. Oando Plc. has continually supported the implementation of projects most relevant to our stakeholders and communities in the areas of operation of our businesses. The long term thrust of Oando’s CSR is sustainable development. In 2012, Oando Foundation was born to achieve access to universal basic education, capacity building and economic empowerment. Develop strategic partnerships with relevant government ministries, departments, agencies and other corporations.
30 Corporate Social Responsibility
Goals & Objectives Implement sustainable programmes aimed at increasing access and quality of education in Nigeria. Focus Establish partnerships for collaboration between School Infrastructural development International & Governmental institutions Teacher development and training Strengthen the effectiveness of key partners vested with Establishment of ICT/Creative Centers the mandate of school development Implementing Early Child Care Development Centers Provide Support within and outside the education sphere Building capacity of School Based Management Committees for school governance Award of Scholarships to deserving pupils
31 Strong Commitment to CSR
We are actively Renovation Scholarship Programme engaged in many projects to achieve environmental and 75,000 9,720 Students in Beneficiaries economic impact Adopted Schools
LGEA Training ICT Centres - 95 Schools
Institutional LGEA Offices Strengthening for 58 170,400 SUBEB Officials Capacity Direct Beneficiaries 48 Developed
ECCD Centres SBMC Capacity Strengthening 11,000 75,000People Beneficiaries in School 100 Communities
32 Community Development Projects
Goals & Objectives
Promote sustainable economic empowerment and poverty alleviation with empowerment programmes such as Current Initiatives scholarship to indigent children 128 scholarships are disbursed annually via: Supporting charitable and laudable causes ad hoc Gaslink Back-to-School Scholarships proposals such as disaster relief Xplicit Dance Group
Several donations are to laudable causes and charitable concerns: Sponsorship of orphans & the under privileged through school
33 Industry Overview
34 Nigeria Overview
Oil Reserves (bnboe) Oil Production (mmbbls/day)
303 13.1 266 12.0 10th in World 11.3 13th in World 169 2nd in Africa 1st in Africa 157 149 106 102 5.0 4.8 4.5 98 3.9 3.8 3.0 2.7 49 38 2.2 2.1 2.0 i i t l a t a a a a a a n q i a a n S a q a i i E o a i E i l i i d d i i l y r a d a a a z a n d c a r e s U b b A s u u r i A i e r r r e b a a I a I I I e s a i a u s a w a w x h r u U U g r n r n z g i u L u e z u S u S i C B a a A e A e N R R K K M N C C n n e e V V
Gas Reserves (tcf) Brief History
1,230 While exploration in Nigeria began at the turn of the 20th century, periods of interruption through the World Wars and lack 1,173 10th in World of licensing awards issued in the 1970s and 1980s has led to 880 1st in Africa production in Nigeria being slow to develop, with production 688 hovering below 2.5mmboe/day.
309 284 225 The Amnesty Programme by the FGN has led to stability in 210 194 184 recent years, with the government targeting production of 4mmboe/day by 2020. r a n a a i a a n E S l i i a a n s a t r e i r A U b t I s a e u h a s It is estimated that there are as many fields with only partial U i u g r z Q i C n e R reserves disclosure as with proved reserves, indicating strong N e n i A e d m potential for future upside. V k u r a u S T
35 Source: BP Statistical Bulletin 2018 Nigeria Oil & Gas - Vastly Improved Climate
New NNPC Three-Tiered Strategy Update on Niger Delta Security - JV Initiative
RESTRUCTURING TRANSPARENCY INDUSTRY ENGAGEMENT
Better managed & Full NNPC audit Review all PSC &JV downsized NNPC underway Contracts Surveillance, Re-draft PIB within Social Engineering Law Enforcement 9 Divisions Monitoring & 12 months & Community & Prosecution streamlined to 4 Protection Engagement Improve investments & revenues from upstream
NNPC Funding Challenges - Agreement Signed Growth in Indigenous Participation
250 230 20% 215 18% 200 176 16% 14% 150 144 12% LIFTING PROCEEDS CASH CALLS DEBT 130 124 125 102 110 10%
Kboepd 100 8% 68 77 NNPC’s share of 6% NNPC lifting Cash calls remitted 50 proceeds paid into directly from escrow incremental production 4% escrow account to NAOC to meet (2016 baseline) used to 2% future cash calls repay NNPC accrued 0 0% cash call 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total Indigenous Indigenous Share
36 New Funding Mechanism Will Boost Investor Confidence
Investment Proposed Derivation Budget Review Acct (13%) Process Two critical impediments for NNPC to Federation Federation JV NNPC 100% Govt. (44%) meet its funding obligations were the Account federation account, the complex and Local & State Other development inefficient approval process with IOCs Funding Requested Govt. (43%) Priorities? shortterm perspective E&P Funding? JV Investment Funding Allocated Poor JV funding resulted in declining production due to lack of investment SUSTAINABLE JV FUNDING GOING FORWARD In 2016, a blueprint was revealed for restructured NNPC into four autonomous, commercially operated entities that will be allowed to generate and keep their own profits Upstream (incorporating NPDC) NNPC lifting proceeds of Base NNPC share of cash calls NNPC share of incremental Production paid into NNPC/CBN remitted directly to NAOC to production (2016 baseline) Downstream Refining (for NNPC’s Crude Oil Proceeds meet future cash calls used to repay arrears refineries) Gas & Power (incorporating a gas transportation, and marketing company) KEY HIGHLIGHTS
Repayment Agreement signed to recover Following the signing of the Repayment Agreement, NAOC immediately mobilized NNPC arrears in 5 years through contractors and restarted the activity incremental production and ensure a sustainable JV funding NNPC has paid USD69M 2016 funding gap in full and has met its funding obligations for the year 2017 due to control of its cash flows from operations (NNPC cash water fall) under the Repayment Agreement
37 Alternative Funding Arrangements
Use of Proceeds JOINT VENTURE CAPEX The NAOC JV parties have been evaluating Forward Sales alternative financing mechanisms to sustain Agreements Loan Proceeds and increase daily production and Hydrocarbons Loans producibility: SPV BORROWER The objective is to secure NNPC’s share of OFFTAKERS INTERNATIONAL NIGERIAN JV funding necessary for incremental budget LENDERS LENDERS CO-LENDERS activities through external sources;
Repayment shall be through NNPC’s share JV PARTNERS NNPC of proceeds associated with the incremental OFFTAKERS OFFTAKERS production. Payments for Hydrocarbons JV PARTNERS NNPC NNPC has already embarked on successful PROCEED OFFTAKERS financing programmes as follows: ACCOUNTS
$1200m multi-year drilling financing package JV PARTNERS NNPC DEBT DEBT SERVICE SERVICE (23 onshore & 13 offshore wells) under the ACCOUNT ACCOUNT NNPC/CNL JV termed project Cheetah Interest and Principal
$780 millions under the NNPC/CNL JV termed JV PARTNERS NNPC DEBT project Falcon DEBT SERVICE SERVICE RESERVE AC. RESERVE AC. The above funding arrangement are $2500 millions under the NNPC/SPDC JV expected to increase combined termed project Santolina production of crude oil and condensate JV PARTNERS NNPC ‘PRICE by 150,000bopd and 618 MMscfd of “PRICE BALANCE” BALANCE’ gas with a combined government take $700 millions under the NNPC/First E&P JV & of about $32 billion over the life of the Schlumberger Agreement projects. JV NNPC
38 APPENDIX I: Upstream Asset Overview
39 OMLs 60-63
Asset Information Effective Date Dec 2012; Acquired Transaction closed July 2014 ONSHORE BUSINESS Working Interest 20% NAOC (Operator)- 20% Co-Venturers & Ownership NNPC-60% Contract Type Concession Contract Expiry 2027 Fiscal System Nigerian R-T System
Asset Crude Oil Brass Blend Facility Water Depth (m) 0 – 5 (Onshore)
Description Asset Development Status
The blocks are in the upper Niger Delta and the lower Niger 26 Producing Fields 49 Oil Trunk Lines Delta margin, located to the North and Northwest of the 12 Flow Stations 1367 km Trunk Lines Brass River Terminal 7 Gas Trunk Lines 2035 km Flow Lines OMLs 60 to 63 cover a combined area of 5,324 km2 1 Oil Terminal 3 Plants (2 Gas, 1 Oil) One field (Beniboye, OML 62) is located in shallow waters, while the remaining fields are onshore 396 Wells Drilled Wells 121 wells in production Exports are through the Brass Terminal 11 gas injector wells
40 NAOC-JV Oil Surface Facility Infrastructure
Okpai IPP LAR
11 50 50 2 MBPD MBPD MBPD MBPD Kwale/Okpai OML 60 Akri 0 25 Gas Plant MBPD MBPD Beniboye 15 2 MBPD MBPD 5 23 Ebocha MBPD MBPD O 8 50 M MBPD MBPD Irri L 6 *On-going Post 2015 Fire 1 Restoration Work Toumo Sambiri OB/OB Cluster 45 8 MBPD MBPD LEGEND OML 62 Forcados (Not part of the NAOC JV) Idu Flow Station OML 63 Ogoda SAR 40 6 5 40 Manifold Planned Flow Station 2 25 MBPD MBPD MBPD MBPD Forcados MBPD MBPD Oshie Clough Ogbainbiri Creek Gas Station 45 6 Akepo MBPD MBPD Obama Bonny (Not part of the NAOC JV) Terminals 7 30 MBPD MBPD x x Tebidaba MBPD MBPD Holding Capacities
Exisitng Oil Pipeline 200MBPD Planned Oil Pipelines 3.5Mbbls Brass Terminal
41 NAOC Gas Surface Facility Infrastructure
Okpai 50 IPP LAR MMSCFD 150 150 MMSCFD MMSCFD Kwale/Okpai OML 60 Akri Oguta Gas Plant Beniboye 250 2070 MMSCFD MMSCFD Ebocha 200 O MMSCFD M Irri L 6 EPCL 1 Eleme Toumo Sambiri OB/OB Cluster LEGEND OML 62 Ubeta Forcados Flow Station (Not part of the NAOC JV) Idu 150 OML 63 MMSCFD Rumuji SAR 2018* 200 PForlancadosned Flow Station 87 MMSCFD 150 MMSCFD Oshie MMSCFD Clough Ogbainbiri Creek AkepoGas Station 70 2019* MMSCFD Obama Bonny (Not part of the NAOC JV) Terminals 60 MMSCFD Fuel Gas xxx MMSCFD Holding Capacities Tebidaba
Exisitng Oil Pipeline Planned Oil Pipelines Brass Terminal
42 Ebendo (OML 56) Marginal Field
Asset Information
Umusedege Acquired: 2003
Working Interest: 45% Ebendo
Eb en Operator: Energia do Fiscal System: Nigerian R-T System, Marginal Terms & Farm-out Agreement
Kwale
O M Ogini L 6 (SDPC) 0 Brief Description
Oil and Gas Field Located onshore in Delta state, within the flood plains slightly Flowstation west of the Niger Delta. approximately 100 km north-west of Oil Pipeline Gas Pipeline OML 61 Port Harcourt . Proposed Oil Pipeline to Kwale Farmed out of the former OML 56 in 2003 as marginal fields Asset Development Status Operated by Energia (with 55% stake) Ebendo field (producing) Fields • • Obodeti field (undeveloped) Field Exports through: - SPDC JV Umugini Pipeline (Forcados Pipeline) All gas produced from Ebendo is under a Gas Utilization - Brass Oil Terminal (Trucking/Barging) GSA/GPA between Energia/Oando & Xenergi - Additional Evaluation is being negotiated to potentially boost productivity by up to 3,000 bpd 5 production wells: Production Wells Ebendo 1, 4 (SS,LS), 5 (SS,LS), 6 (SS,LS), 7 (SS,LS)
43 Qua-Ibo (OML 13) Marginal Field
Asset Information
Acquired: 2013 (OEPL farmed into the Licence in 2012, with ownership transferred to OER in 2013) Working Interest: 40% Operator: Network E & P Nigeria (NEPN)
Fiscal System: Nigerian R-T System, Marginal Terms & Qua Ibo Farm-out Agreement Qua Ibo Terminal
Brief Description Oil and Gas Field
Flowstation Located onshore at the mouth of the Qua Ibo River in the eastern Oil Terminal Niger Delta and covers an area of 14 sq.km Proposed Oil Pipeline
The License includes the Qua-Ibo field, with various reservoir Asset Development Status pools. Other discovered reservoirs within the field remain un- appraised Production Wells Qua-Ibo 3ST & 4 Oando is a Funding and Technical Partner on the block Fuel Gas: 0% The asset includes flowstation to process field production which Sales Gas: 0% GasUtilization flows through a Group Gathering Facility to the Exxon Mobil Shrinkages: 0% Operated Qua-Ibo Terminal for export as Qua blend Flare Gas: 100%
44 Akepo (OML 90) Marginal Field
Asset Information
Acquired: 2008 Working Interest: 40% OML 90 Operator: Sogenal N I G E R I A Technical Service Agreement: OER Cameroon Port Harcourt Brief Description
Type of Contract Marginal Field Douala Royalty Oil 2.5% - 18.5% based OML 122 on production Overriding Royalty: 2.5% - 7.5% based OML 131 on production OML 145 Tax Oil: 55% Equatorial Profit Oil/Cash Flow Allocation Varies from 80%-40% based on cummulative Guinea
45 OML 122
Description OK LNG Escravos Oil Field T Warri OML 122 is located in the Shallow Offshore are T Block OML 122 of the Niger Delta Basin Pipleline T Terminal Total area of the OML is 1,599 km2, with water LNG Plant depths ranging from 110-150 m Forcados T N I G E R I A onshore fields and pipelines emitted for clarity Background Gas pipeline
Bilabri Operated by Peak Petroleum (with 60% stake) Port Harcourt with EEL as a technical and funding partner to the Operator on the block. Bonga Bonny LNG 10Km Brass River LNG Working interest: 5% Oil & 12% Gas, with Peak Oil as Operator OML 122 Export through the FPSO via Ship to Ship 100m T T transfer Pennington T 200m Bonny Brass River T Offshore The License contains three discoveries (Bilabri, Offshore Orobiri and Owanare) 500m 4 Discovery/Appraisal Wells have been drilled 1000m Contingent Resources – Bilabri 100km
46 EEZ 5 & 12
Opportunity
EEZ 5 & 12 represents an exciting opportunity in a + + + + +
frontier deepwater basin within the Exclusive EEZ Economic Zone (EEZ) of São Tomé and Príncipe
+ + + + + Principe Rio Muni 5 5 Basin
Location + + + + +
EEZ One of Africa’s untapped region with significant Sao Tome exploration diversity + + + + +
Gabon Gabon 12 Offshore east bordering Equatorial Guinea (EEZ 12 Block 5) and Gabon (EEZ Block 12) + + + + +
+ + + + + Geology
Structural configuration of the STP basin is Operation Block 5 Block 12 confined between the Douala & Rio Muni basins & the Cameroon Volcanic Line (CVL) Equator 20.0% 22.5% EEZ Blocks 5 & 12 are There has been penetration of several wells operated by Kosmos Kosmos 45.0% 45.0% offshore and onshore & crops out Rio Muni & Energy Galp 20.0% 20.0% North Gabon ANP 15.0% 12.5%
WORKING INTEREST
47 OPL 321 & 323
Opportunity
OPL 321 and OPL 323 represents a unique opportunity to operate deepwater assets with substantial exploration potential OPL 321
Location Falls within West deep-water Niger Delta OPL 323 OPLs 321 and 323 are separated by the Benin transform fault, thus OPL 321 lies within the Toe thrust Belt and OPL 323 lie within the Fold belt
Discoveries Operation
Prolific Mid-Life Basin – known "Tertiary Blocks lie on the intersection of two prospectivity trends Niger Delta (Akata-Agbada) Petroleum Major fields on trend contain between 600-1.900 MMboe System" hydrocarbon basin with huge Neighbouring discoveries & fields, increasing in volumes continuously discoveries. Well defined large structures Well defined presence of reservoirs
48 OML 131
Opportunity
OML 131 represents a unique opportunity in a Ebitemi deepwater asset with substantial resources & exploration potential Pulolulu
Location Bolia-Chota OML OML 60 East-Chota 62 One of Africa’s largest countries in terms of oil and OML 61 gas reserves. OML 63 Proximity to evacuation infrastructure.
OML 145
OML 131
Discoveries Operation
Prolific Mid-Life Basin – known "Tertiary Niger Delta (Akata-Agbada) Petroleum System" hydrocarbon Bolia-Chota Unit Area is Operated basin with huge discoveries. by Shell (SNEPCO)
Ebitemi & Chota discoveries are with OML131
49 OML 145
Opportunity Oil & Gas Field Ichokwu NZA Deep Prospect OML 145 represents an opportunity with substantial Uge North resources & exploration potential Lead Lead 5 Uge Deep NZA
Uge
Uge Main/Zan Location
One of Africa’s largest countries in terms of oil and OML OML 60 62 OML gas reserves OML 61 145 Orso 145 OML 63 Proximity to evacuation infrastructure Ogazi/Lead C
OML 145
OML 131
Discoveries Operation
Prolific Mid-Life Basin – known "Tertiary Niger Delta Area Operated by Exxon Mobil (21.05%) (Akata-Agbada) Petroleum System" hydrocarbon basin with huge discoveries CoVs include Chevron (21.05%), Svenska (21.05%), Oando (21.05%) & NPDC (15.8%) Uge discovery is within OML 145
50 APPENDIX II: Midstream Data
51 The Nigerian Gas Master Plan (NGMP)
OGP is participating in the development of strategic CPF and pipeline systems
Make gas available in all parts of the country Allow for Develop an widespread integral industry distribution of gas development to remote areas plan Allow & markets NGMP refurbishment & Ensure supply rapid development continuity to meet As an Indigenous Player of the crippled current & future within the Industry, OGP Make gas power sector contracts available at Promote gas is well positioned to commercial & use investment to benefit from the NGMP affordable replace imported prices products
Eliminate gas flaring
Government Planned Infrastructure in the Gas Master Plan Oando’s Participation
Gas Processing Facilities (Western, Eastern & Central Clusters) Central Cluster CPF – Oando/NAOC/NNPC consortium awarded Gas transmission pipeline systems (OB3, CAP & AKK) project Export terminals / facilities Independent gas gathering / distribution pipeline networks ELPS-Ibadan-Ilorin-Jebba (EIIJ) gas pipeline network
52 WWW.OANDOPLC.COM
INVESTOR CONTACT
Olufemi Adeyemo Segun Awodele General Chief Financial Officer Head, Investor Relations Enquiries +234 (1) 2702400 Ext 6391 +234 (1) 2702400 Ext 6204 +234 (1) 2702400 Ext 6204 [email protected] [email protected] [email protected]