Despite the challenges affecting the Oil and Gas industry, Oando Nigeria Plc recorded a profit- after- tax of N1.71 billion in its first quarter ended March 31, 2017.
The company in a release said, whilst most oil and gas companies specifically upstream players still struggle to navigate the difficult terrain translating to lower revenues and operating cash flows, Oando’s strategy of growth across its business operations, deleverage through the divestment of non-performing assets and profitability, by focusing on dollar denominated export earnings has steadily paid off.
The company’s turnover grew by 116 per cent to N138.4 billion and gross profit by 53 per cent to N13.4 billion compared to the first quarter of 2016.
Oando’s N1.7 billion profit can be attributed to proactive measures put in place to enable the business cushion the effect of continued economic headwinds.
Through its upstream subsidiary, Oando Energy Resources (OER), the company has consistently adopted a hedge mechanism that ensures the business is protected from fluctuating oil prices. Approximately 66 per cent of the company’s crude production was hedged with 9,590 bbls/day of crude oil production hedged at $65/bbl (average) with expiries ranging from July 2017 to January 2019.
Commenting, group chief executive, Oando, Mr Wale Tinubu, said, “Following a successful restructuring in 2016, we are pleased with our first quarter, 2017 results which reflect a return to normalcy and growth in spite of continued security challenges, economic headwinds and a fluctuation in crude prices.”
The company has continued to reduce its net debt quelling any concerns of critiques, as at March 2017, it stands at N225.9 billion a 29 per cent reduction from N316.6 billion in March 2016.
“In the Upstream, production in the first quarter of 2017 decreased to 38,125 bp/day compared to 49,365 boe/day in Q1 2016. However, due to decreased production expenses Oando Energy Resources (OER) recorded a profit of N4.96 billion in the first quarter of 2017, compared to a profit of N815.5 million in the prior year comparative period. In the midstream following the partial divestment of Oando Gas and Power (OGP) to Helios Investment Partners, we successfully concluded the sale of Alausa IPP for a transaction price of N4.6 billion.”