| Fri 25 Jul 2008, 13:44 | | OAO - Oando - Acquisition of interest in offshore Nigeria OML 125 AND OML 134 |
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OAO
UNTP
OAO - Oando - Acquisition of interest in offshore Nigeria OML 125 AND OML 134
Oando Plc
(Incorporated in Nigeria and registered as an external company in South Africa)
Registration number: RC 6474
(External company registration number: 2005/038824/10)
Share Code on the JSE Limited: OAO
Share Code on the Nigerian Stock Exchange: UNTP
ISIN: NG00000UNTP0
("Oando")
ACQUISITION OF INTEREST IN OFFSHORE NIGERIA OML 125 AND OML 134
1. Introduction
Shareholders are referred to the announcement released on SENS on 25 February
2008 as well as the subsequent cautionary announcements released on SENS on 2
April 2008, 14 May 2008 and 25 June 2008 respectively. Shareholders are advised
that the transaction set out in the announcement has changed and Oando has,
subject to the fulfilment or waiver of the conditions precedent set out in
paragraph 3 below, entered into an agreement with Nigerian AGIP Exploration
Limited ("AGIP") to acquire a 15.0% interest in the Production Sharing Contracts
("PSCs") in respect of offshore Nigeria Oil Mining Licence ("OML") 125 and OML
134 (the "Transaction"). The Transaction has been agreed with AGIP subsequent
to AGIP`s exercise of its preemption rights over Shell Nigeria Exploration and
Production Company Limited`s ("Shell") entire 49.81% interest in the PSCs and
JOA in respect of OML 125 and OML 134. Standard Chartered has acted as Oando`s
sole financial adviser for this transaction.
2. Terms of the Transaction
Oando has agreed, subject to the fulfilment or waiver of the conditions
precedent set out in paragraph 3 below, to acquire the AGIP interest for an
aggregate initial cash consideration of US$188,445,292 (the "initial
consideration"). The initial consideration payable in terms of the Transaction
will be settled as follows:
- US$18,844,529 on 24 July 2008, the date of signature of the sale and purchase
agreement (the "agreement") for the Transaction; and
- US$169,600,763 on the completion of the Transaction.
The initial consideration will be adjusted to account for changes between the
effective date of the Transaction being 30 June 2007 and the completion date
being the date when all the conditions precedent set out in paragraph 3 below
have been fulfilled or waived. These adjustments reflect interest on the initial
consideration as well as positive and negative adjustments to account for
expenses incurred and income received from the acquired business by the seller
since the effective date. The initial consideration and any adjustments will be
funded from both internal cash resources and from external financing. Standard
Chartered, Standard Bank Group Limited and BNP Paribas are providing financing
to Oando for the Transaction.
3. Conditions precedent
The Transaction is subject to warranties and indemnities normal for a
transaction of this size and nature and is also subject to the fulfilment or
waiver of the following principal conditions precedent:
- receipt of consent by the Nigerian government; and
- no material adverse event having occurred in the business condition as
defined in the agreement.
4. Rationale for the Transaction
Oando is Nigeria`s largest energy group with strategic investments in a range of
energy companies across West Africa. With its investments and diversified
business model the Company is fast achieving its goal of being "the leading
integrated energy solutions provider". The Transaction represents a rare
opportunity to acquire a balanced upstream asset portfolio in our home market in
line with our stated principle to acquire proven and actively producing
properties that demonstrate the potential for increased financial return. Oando,
through the Transaction, will benefit from partnering with Agip, a world class
operator with significant experience in Nigeria.
The assets being acquired include production from the Abo field combined with
near term production growth and high potential exploration acreage to complement
Oando`s existing upstream position. The Transaction brings approximately 3,000
barrels per day of crude oil production, 24.8 million barrels of 2P and risked
contingent reserves and turns Oando into Nigeria`s leading indigenous
exploration and Production Company.
5. Circular
The Transaction is a Category 2 transaction in terms of the JSE Limited`s
Listings Requirements. After taking into account the estimated adjustments
referred to in paragraph 2 above, between the effective and the closing date,
the transaction would still be considered a Category 2 transaction. Accordingly,
Oando is not required to issue a circular to shareholders.
6. Financial effects
As the Transaction relates to the acquisition of a 15% interest in certain
assets and historical financial accounts for the acquired business are not
available, historical financial effects cannot be quantified.
7. Withdrawal of cautionary
The Oando cautionary announcement released on SENS on 2 April 2008 and renewed
on 14 May 2008 and 25 June 2008 is hereby withdrawn. Accordingly, Oando
shareholders are no longer required to exercise caution when dealing in their
Oando shares.
Johannesburg
25 July 2008
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Financial adviser
Standard Chartered
Date: 25/07/2008 13:44:02 Produced by the JSE SENS Department.
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