By Alex C
Oando Energy Resources (OER) has announced that the outside date for completion of the proposed acquisition of ConocoPhillips, an upstream oil and gas business firm has been extended to June 30, 2014.
Pursuant to an amendment agreement executed on April 30, 2014, OER, a company focused on oil and gas exploration and production in Nigeria and ConocoPhillips agreed to extend the outside date for completion of the ConocoPhillips Acquisition from April 30, 2014 to June 30, 2014 to enable the companies to satisfy all closing conditions including the anticipated consent of Mrs Diezieni Allison-Madueke, Minister for Petroleum Resources.
OER has agreed to increase its deposit by $25 million on May 30, 2014, if the consent of the minister is not received on or before May 23, 2014. The $1.55 billion deal for which Oando has raised a princely N200 billion from the capital market was being delayed several months the takeover ought to have been completed.
In a statement some months ago, the Department of Petroleum Resources (DPR) had accused both Oando and US-based ConocoPhillips of trying to arm-twist the Federal Government over the ongoing sale of the latter’s $1.55 billion oil assets in Nigeria.
DPR faulted the claims by Oando Plc that its efforts to acquire the business interests COP was been threatened by delay in granting the required consent by the Minister.
George Osahon, Director of DPR, insisted that government would follow the process of due diligence before signing-off on the deal.
He explained that documents to the oil field transaction were only submitted to the minister two months ago to “rubberstamp” the transaction without the DPR conducting statutory due diligence on the transaction, and after Oando and COP had concluded their negotiations amongst others.
This new development comes as Oando Plc announced that it has completed the sale of the entire issued share capital of one of its wholly owned subsidiaries, East Horizon Gas Company Limited (EHGC) to Seven Energy International Limited for a total gross consideration of up to $250 million.
The consideration consists of an initial payment of $100 million in cash; assumption by Seven Energy International Limited of existing liabilities of EHGC, including approximately S$62 million of bank indebtedness; and balance in deferred payments due on achievement of certain operational and contractual conditions.
It is expected that these conditions will be satisfied during the course of 2014. EHGC is a special purpose vehicle operating a 128km, 120 million standard cubic feet per day (mmscfd), 18-inch natural gas transmission and distribution pipeline traversing the Akwa Ibom and Cross River States.
EHGC also has a gas sales agreement to supply up to 25 mmscfpd, increasing to 50 mmscfpd in 2016, under a 20 year “take-or-pay” agreement expiring in 2032.