| Mon 27 Jul 2009, 7:30 | | OAO - Oando Plc - Acquires two rigs from Shell |
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OAO
UNTP
OAO - Oando Plc - Acquires two rigs from Shell
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: NGOANDO00002
("Oando" or "the company")
Oando acquires two rigs from Shell
- OES Emerges Nigeria`s largest indigenous drilling services provider
- Total rigs in fleet now five
- Investment in energy services now $250 million
Oando Energy Services, a subsidiary of Oando PLC - Nigeria`s leading
integrated energy solutions provider, has emerged Nigeria`s largest
indigenous drilling contractor with Oando`s acquisition of two inland barge
rigs from Shell Petroleum Development Company of Nigeria Limited (SPDC) for
an estimated USD 43.5 million inclusive of VAT.
This latest acquisition brings to five, the total number of rigs in Oando`s
fleet and clearly reinforces the company`s position as the leading beacon in
the oilfield services sector of Nigeria`s oil and gas industry.
The two former Parker Drilling rigs which were purchased by SPDC in 2006 have
the following specifications:
Rig Rig Pressure Horse Drilling Application
Name Type Output Power (hp) Depth
1. RIG 1 barge 10,000 psi 3,000 25,000ft Drilling and
Work-over
wells
2. RIG 2 Swamp 10,000 psi 3,000 30,000ft Drilling &
Work-over
wells with
additional
cantilever
functionality
Commenting on the acquisition, Mr. Uche Dimiri, Chief Executive Officer,
Oando Energy Services, said: "The Niger Delta swamps contain abundant
reserves that are crucial to Nigeria achieving its plan to increase
production levels to 4 million barrels per day by 2010. The understanding
that there must be increased drilling activity across all stages of oil
exploitation, from exploration to development, for the government`s targets
to be realised forms the basis of our continued investments in swamp drilling
rigs. The cantilever capability of Rig 2 (formerly Parker rig 75) is unique
in Nigeria. This feature enables Rig 2 to drill multiple well slots while
remaining at the same client location, thus optimising reservoir drainage
while reducing the overall cost of well construction. We intend to combine
this uniqueness with our superior community relations expertise to deliver
not only significant cost savings but other operational efficiencies to our
customers. An added feature of Rig 1 is its 3,000 horsepower rating which
gives Oando the flexibility to upgrade it to a High Pressure, High
Temperature (HPHT) rig. This conversion will increase to two the number of
such rigs in the country for exploiting reservoirs with such peculiarity."
"Rig 2 was acquired together with an existing contract whilst Rig 1 (formerly
Parker 73) is scheduled to go to shipyard where it will undergo life
enhancement and upgrade prior to its deployment in 2010." Mr. Dimiri added.
Mr. Wale Tinubu Group Chief Executive said, "This latest acquisition boosts
our investment to approximately $250 million out of the $500 million five-
year development plan announced prior. With a further resolve to increase our
rig fleet in the near future, we are positioning Oando as the partner of
choice for world-class land and swamp oil field services. By the purchase of
an asset already in contract, we expedite value extraction for our
shareholders, whilst guaranteeing significant and steady long term revenue
for the group."
Johannesburg
27 July 2009
Sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 27/07/2009 07:30:01 Produced by the JSE SENS Department.
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