Oando Plc · NSENG:OANDO
Oando — Investor Presentation (November 2015)
71 slides from Oando's investor presentation, November 2015
Slide 1: Oando Investor Presentation
Oando Plc Oando Investor Presentation November, 2015 www.oandoplc.com ..the energy to inspire
Slide 2: Disclaimer
Disclaimer This presentation includes certain forward looking statements with respect to regulatory authorities) or they may be reasonably anticipated economic This presentation does not constitute an certain development projects, potential collaborative partnerships, results of conditions in the ca
Slide 3: Contents
Contents 01 Executive Summary Upstream Operations 08 Oando Energy Resources (OER) Oando Energy Services (OES) 27 Midstream Operations Oando Gas & Power (OGP) Downstream Operations Oando Terminals (OT) 32 Oando Supply & Trading (OST) Oando Marketing (OMP) Corporate Social Responsibility (CSR) 46 Oand
Slide 4: Executive Summary
Executive Summary ..the energy to inspire
Slide 5: Oando Overview
Oando Overview PARENT LISTING Primary Listing NSE Secondary Listing JSE UPSTREAM LISTING Subsidiary Oando Energy Resources Listing TSX FINANCIAL OVERVIEW ~$ 2.21 BN 2014 Revenue ~$ 2.06 BN Enterprise Value ~$ 533 Market Capitalisation M PUBLIC LISTING Information dated 9th November 2015 2 Reflects 2
Slide 6: History of Oando (1956 - 2015)
History of Oando (1956 - 2015) The company commenced business in 1956 with operations as a petroleum marketing company in Nigeria under the name "ESSO West Africa Incorporated", a subsidiary of Exxon Corporation GASLINK of the USA The Federal Government of Nigeria (FGN) bought 2000 2002 2003 2004 20
Slide 7: Financial Highlights
Financial Highlights Profit & Loss Statement 2014 Revenue 2014 EBITDA 2014 Net Profit Contribution Contribution 2 Contribution2 9M Sept $’ Million 2015* 2014 2013 2012 Revenue 1,347 2,561 2,944 4,190 3% Revenue Growth (38%) (13%) (30%) 15% 7% EBITDA 175 271 306 237 EBITDA Margin 13.0% 10.6% 10.4% 5.
Slide 8: Business Overview
Business Overview EXPLORATION & ENERGY SERVICES GAS & POWER TERMINALS SUPPLY & TRADING MARKETING PRODUCTION ~ 55 kboepd 9M September 2015 4 125 Km 45,000 MT C 15 % > 400 Average Net Production Swamp Rigs Pipeline Network Dead Weight Tonnage of Nigeria’s Fuel Retail outlets Cargo Capacity, Apapa Requ
Slide 9: Asset Overview
Asset Overview Description Assets · Largest indigenous producer in Nigeria · Producing assets: OMLs 60-63, OML 125, OML 56 & OML 13. Exploration & · OER Listed on the Toronto Stoch Exchange (TSX) · Development & appraisal: OML 90, OML 122, OML 131, OML 134, Production and OML 145, UPSTREAM · 93.8% o
Slide 10: Strategic Highlights
Strategic Highlights Current: 2015 Midterm: 2017 Long Term: 2019 › Production of ~55kboepd (9M Sept 2015 Average) › Production Target: > 80kboepd › Production Target: >100kboepd › 2P Reserves of 420mmboe › Reserves Replacement Ratio Target of 1:1 › 2P Reserves Target: >500mmboe › Maintain production
Slide 11: Upstream Operations
Upstream Operations ..the energy to inspire
Slide 12: Exploration & Production
Exploration & Production 9
Slide 13: Oando Energy Resources (TSX:OER) - Overview
YTD Sept2015 Oando Energy Resources (TSX:OER) - Overview $Million 1 9M SEPT 2015 2014 2013 2012 Revenue 355 421 127 135 Revenue Growth 44% 231% (6%) (15%) EBITDA 133 199 89 91 EBITDA Margin 38% 47% 70% 68% Net Income (63) (320) (38) 16 Net Income Margin (18%) (49%) (30%) 12% Production (mboe) 15,057
Slide 14: Oando Exploration & Production - Overview
Oando Exploration & Production - Overview The combined Group of Oando Energy Resources (OER) & Oando Exploration and Production (OEPL) is the exploration and production subsidiary of Oando Plc, which has built a portfolio of oil and gas assets in Nigeria and the Gulf of Guinea. Vision: Key Objective
Slide 15: OER & OEPL Asset Overview
OER & OEPL Asset Overview NIGERIA Asset W.I. Operator OML 125 OML 60 20% AGIP OML 56 - Ebendo Field OML 61 20% AGIP OPL 321 & 323 O OML 60 M OML 62 20% AGIP L OML 90 - Akepo Field 62 CAMEROON OML 61 OPL 236 OML 63 20% AGIP OML 134 OML 63 OML 125 15% ENI OPL 282 OML 122 - Bilabri Field OPL 278 OML 13
Slide 16: 2015 Capex Plan
2015 Capex Plan 138.7 $ Total CAPEX M 2015 OMLs 60-63 Development OML 125 drilling, completions & OML 56 Other Assets OML 13 Upper recompilations Completion of Facility & pipeline OML 134 EEL Facility Enhancements and environmental Abo 12, FPSO life overhauls and & safety projects extension and enha
Slide 17: Producing Assets: OMLs 60-63 (NAOC JV)
Producing Assets: OMLs 60-63 (NAOC JV) Overview Acquired 2014 Working Interest 20% Net 2P Reserves 401.2 MMboe Net 2C Resources 38.9MMboe Producing Wells 170 Operator NAOC Fiscal System Oil Gas Type of Contract Joint Venture Joint Venture Royalty 20% 7% Annual Capital Years 1-4; 20% Capital Expendit
Slide 18: Producing Assets: Ebendo Field (OML 56)
Producing Assets: Ebendo Field (OML 56) Overview Acquired 2006 Working Interest 45% Net 2P Reserves 7.9 MMboe Producing Wells 5 (4 Producing & 1 Shut in) Operator Energia Fiscal System Type of Contract Marginal Field Royalty 2.5%-18.5% based on production Overiding Royal 2.5%-7.5% based on productio
Slide 19: Producing Assets: OML 125 (Abo Field)
Producing Assets: OML 125 (Abo Field) Overview Acquired 2008 Working Interest 15% Net 2P Reserves 7.6 MMboe Producing Wells 7 (5 Producing & 2 Shut in) Operator NAE (Agip) Fiscal System 1993 PSC Fiscal System Type of Contract PSC Royalty 8% Cost Oil Allocation Ceiling NA Petroleum Tax 50% Profit Oil
Slide 20: Producing Assets: Qua Ibo Field (OML 13)
Producing Assets: Qua Ibo Field (OML 13) Overview Acquired 2012 Working Interest 40% Net 2P Reserves 3.5 MMboe Producing Wells 2 Technical Services OER/ORPSL Agreement Fiscal System Type of Contract Marginal Field Royalty 2.5%-18.5% based on production Overiding Royal 2.5%-7.5% based on production T
Slide 21: OER Portfolio - Assets Under Development
OER Portolio - Assets Under Development OML 131 - Overview OML 122 (Bilabiri/Owanare) - Overview NIGERIA Acquired 2014 Acquired 2009 Working Interest 100% Working Interest Oil 5%, Gas 12% Operator Oando Operator Peak Fiscal System OML 90 - Akepo Field CAMEROON Fiscal System Type of Contract PSC OML
Slide 22: OER Portfolio - Exploration Assets
OER Portolio - Exploration Assets* OML 321/323 - Overview OPL 278 - Overview Acquired 2009 Acquired 2006 Working Interest 30% Working Interest 60% NIGERIA Operator OEPL Operator Knoc OPL 321 & 323 Fiscal System Fiscal System OPL 236 CAMEROON Type of Contract PSC Type of Contract PSC Royalty Oil 20%
Slide 23: Strategy
Strategy TO BE THE LEADING INDIGENOUS E&P PLAYER ON THE AFRICAN CONTINENT 500 / 100 mmboe kboepd MIDCAP COMPANY: MARKET CAPITALISATION > $2BN 2015 2017 2019 Current Mid-Term Long-Term Production of ~55 kboepd (9M Sept 2015 Average) Production Target: > 80kboepd Production Target: >100kboepd 2P Reser
Slide 24: Energy Services
Energy Services 21
Slide 25: Energy Services - Overview
Energy Services - Overview $Million 9M SEPT 2014 2013 2012 2015 Revenue 29 93 140 132 Revenue Growth (67%) (33%) 6% 43% EBITDA (35) (28) 59 28 EBITDA Margin (123%) (31%) 42% 21% Net Income (26) (298) (7) 1 Net Income Margin (218%) (320%) (5%) 1% OES Teamwork OES Integrity Rig Workers Largest Swamp D
Slide 26: Asset Overview
Asset Overview Teamwork Respect Integrity Passion Rig Type Swamp / Barge Swamp / Barge Swamp / Barge Swamp / Barge Date of Purchase 2007 2007 2007 2009 High Pressure, High Cantilever Rig - Application Normal Drilling Normal Drilling Temperature Wells Normal Drilling Operating Pressure Rating 10,000
Slide 27: Summary of Rig Contracts
Summary of Rig Contracts Passion Respect Operating Rate with Drill Pipe (US$) Low $90,000s for extension period Low $80,000s for initial term Term of Contract • 2 years with optional 1 year extension • 2 years with optional 1 year extension • Shell Petroleum Development Company • Chevron Nigeria Lim
Slide 28: Other Businesses
Other Businesses Drilling Fluids Drilling Bits > Mud Engineering and Production > Specialises in providing customised drill Chemicals for major IOCs bit solutions to upstream IOCs, operating in Nigeria > Alliance with Baker Hughes > Alliance with Halliburton Drill Bits > 9% market share in a $280M p
Slide 29: Strategic Rig Fleet
Strategy Strategic Rig Fleet Drilling rig fleet to support land and swamp production ramp up 2015 2017 2019 Current Mid-Term Long-Term Keep Swamp rig fleet active. Deploy first offshore rig through JV company Enter into partnerships and jointly deploy deep-water drilling rigs Enter into more partners
Slide 30: Midstream Operations
Midstream Operations ..the energy to inspire
Slide 31: Gas & Power
Gas & Power 28
Slide 32: Gas & Power Overview
Gas & Power Overview $Million 9M SEPT 2014 2013 2012 2015 Revenue 12711 180 160 343 Revenue Growth (7%) 13% (53%) 191% EBITDA 27 29 60 97 EBITDA Margin 21% 16% 37% 28% Net Income 19 22 11 76 Net Income Margin 15% 12% 7% 22% Gas Link Akute Power CNG Station Construction Networks in Lagos Independent
Slide 33: Asset Overview
Asset Overview A Alausa P wer Limited ch c Central Horizon Gas Company GNS Gaslink Nigeria Akute Power Alausa Power Central Horion Gas Network Ltd Plant Plant Gas Company Services Location Lagos State Lagos State Lagos State Port Harcourt, Rivers State Lagos State Pipeline / Plant 120 Km 12.15 MW 10
Slide 34: 600 km + Pipeline Network
Strategy 600 km + Pipeline Network Infrastructure to support growing gas requirements (Commercial, Industrial and Domestic) 2015 2017 2019 Current Mid-Term Long-Term Achieve mandates for the development of Complete development and commence Complete development and commence embedded power generation
Slide 35: Downstream Operations
Downstream Operations ..the energy to inspire
Slide 36: Terminals
Terminals 33
Slide 37: Future Strategy - 45,000 MT Midstream Jetty
Future Strategy - Main Capital Projects 45,000 MT Midstream Jetty Berthing of larger import volumes & improved efficiency Project Description Rationale New marina jetty and 1-Km subsea Savings on shipping costs and demurrage: pipeline / at the Lagos Apapa port Being able to berth larger vessels (30-
Slide 38: Future Strategy - Main Capital Projects
Future Strategy - Main Capital Projects 68,000 MT Terminal facility upgrade Project Description Rationale Upgrade in facilities to optimize storage Maximization of vessel receipts for marketers via the ASPM APAPA capacity within the bounds of available Increase in Terminal storage capacity by 230% f
Slide 39: Future Strategy - 210,000 MT Terminal Facility
Future Strategy - Main Capital Projects 210,000 MT Terminal Facility Larger import volumes & efficient and reduced handling charges Project Description Rationale Development of a new Petroleum Address infrastructure/congestion challenge in Apapa axis product storage terminal of 210,000 Natural deep-
Slide 40: Supply & Trading
Supply & Trading 37
Slide 41: Supply & Trading - Overview
Supply & Trading - Overview $Million 9M SEPT 2014 2013 2012 2015 Revenue 615 1,614 1,079 3,801 Revenue Growth (51%) 50% (72%) (4%) EBITDA 19 26.9 28 13 EBITDA Margin 3% 2% 3% 0.3% Net Income 14 25 23 4 Net Income Margin 2% 2% 2% 0.1% Vessels with Refined Products 2014 Revenues Nigeria’s fuel require
Slide 42: Oando Supply & Trading at a Glance
Oando Supply & Trading at a Glance Oando Supply & Trading is the largest indigenous importer of petroleum products in the Sub- Saharan region, supplying and trading crude oil and refined petroleum products Track Record: Trading of regulated products (PMS) under the Petroleum Subsidy Fund (PSF) regim
Slide 43: Competitive Positioning
Competitive Positioning Competitor Trends & Strategies Strategic Patner Oando has entered into strategic partnership with Vitol which will increase and accelerate Oando’s investment in the industry as well as provide economies of scale. Global Trading Firms have taken to structuring term supply deal
Slide 44: 20+ Market Share
Strategy C 20 + Market Share % Leader in product export and import 2015 2017 2019 Current Mid-Term Long-Term Focus on increasing market share in existing Diversify Markets, increasing West African Expansion into other African markets markets and achieving economies of scale presence 41
Slide 45: Marketing
Marketing 42
Slide 46: Marketing - Overview
Marketing - Overview $Million 9M SEPT 2014 2013 2012 2015 Revenue 616 1,270 1,388 1,581 Revenue Growth (39%) (8%) (12.2%) 24% EBITDA (5) (8.36) 43 64 EBITDA Margin (1%) (1%) 3% 4% Net Income 15 (12) 23 35 Net Income Margin (2%) (1%) 2% 2% Lubricant Plant Terminal Retail Outlet Retail Outlets Market
Slide 47: Downstream Environment in Nigeria
Downstream Environment in Nigeria 2014 PSF Payment Trend Gross Margin Contribution* 12.00 10.00 8.00 Lubricants (19%) Kerosene (6%) MONTHS 6.00 4.00 AGO (30%) PMS (32%) 2.00 Others (13%) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Target collection Period Actual Collection Period Target days for
Slide 48: LPG Market Share
Strategy C 30 % LPG Market Share (Majors) Operations in Nigeria, Ghana, Benin, Togo and Liberia 2015 2017 2019 Current Mid-Term Long-Term Conclude on process of Group’s partial Business expansion and increased Explore further divestment (Group) divestment from Downstream efficiencies Maintain at a mi
Slide 49: Corporate Social Responsibility
Corporate Social Responsibility ..the energy to inspire
Slide 50: Corporate Social Responsibility
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 comm
Slide 51: Education Intervention
Education Intervention Goals & Objectives Implement sustainable programmes aimed at increasing access and quality of education in Nigeria. Establish partnerships for collaboration between Focus International & Governmental institutions School Infrastructural development Strengthen the effectiveness
Slide 52: Education
Education Projects Archbishop Taylor Memorial School, Lagos. Current Initiatives Forty Seven (47) schools adopted in Lagos, Cross River, Akwa Ibom, Bauchi, Katsina, Ogun, Sokoto, Taraba, Adamawa, Kaduna, Plateau, Niger, FCT, Enugu, Before After Ebonyi, Edo, Ondo, Bayelsa. 19 schools renovated, with
Slide 53: Current Initiatives
Current Initiatives 1 Oando Foundation works to invest in young children and create a strong foundation for their lifelong health, education, and productivity. In 2013, the Foundation completed 2 pilot ECCD centres in Archbishop Taylor Primary School, Lagos and St. Patrick’s Primary School, Odukpani
Slide 54: Community Development Projects
Community Development Projects Goals & Objectives Promote sustainable economic empowerment and poverty alleviation with empowerment programmes Current Initiatives such as scholarship to indigent children 128 Scholarships are disbursed annually: Supporting charitable and laudable causes Adhoc • Gasli
Slide 55: Community Development Projects
Community Development Projects Gaslink Scholarships School Initiative Sponsorships of Orphans 52
Slide 56: Appendix I: Midstream Data
Appendix I: Midstream Data ..the energy to inspire
Slide 57: The Nigerian Gas Master Plan (NGMP)
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 NGMP development plan Allow refurbishment & rapid development to remo
Slide 58: Summary Operating Data – OG&P
Summary Operating Data – OG&P Value proposition of gas is clear and OGP has progressively recruited quality clients to take the gas advantage Gas Transmission Lines / Distribution Network (Km) Number of Customers 240 241 242 173 154 128 137 125 103 110 106 73 81 87 100 62 2007 2008 2009 2010 2011 20
Slide 59: Appendix II: Downstream Data
Appendix II: Downstream Data ..the energy to inspire
Slide 60: Summary Operating Data - Scale and Volumes
Summary Operating Data - Scale and Volumes Number of Stations Volume Summary (Million Metric Tons) (‘000 litres, except otherwise indicated) 2014 2013 2012 2011 Nigerian Retail Dealer Owned Company Owned PMS 969,513 1,251,908 1,579,886 1,468,586 AGO 54,935 118,880 101,510 79,709 643 Station Rational
Slide 61: Regulatory Landscape How the Subsidy Works
Industry Overview: Regulatory Landscape How the Subsidy Works 1. Product Cost NWE monthly moving average as quoted on Platts Oil gram Component PMS HHK Average clean tanker freight rate (World Scale 100) as quoted on 2. Freight Platts (from NWE to West Africa), plus trader's margin of $10/MT C+F 0.7
Slide 62: Appendix III: Corporate Governance & Management
Appendix III Corporate Governance & Management ..the energy to inspire
Slide 63: Overview of the Oando Board
Overview of the Oando Board HRM Oba M.A Gbadebo Chairman Oba Gbadebo is the Alake (King) of Egba Land in Nigeria and a Non Executive Director of the Company. Prior to his coronation, He had a successful career in the Nigerian Army culminating in his appointment as the Principal Staff Officer to the
Slide 64: Overview of the Oando Board
Overview of the Oando Board Chief Sena Anthony Oghogho Akpata Non-Executive Director Non-Executive Director Chief Anthony was appointed as a Non-Executive Director Oghogho possesses 20 years of experience in the of the Company in January 2010. Prior to her appointment, transactional and dispute reso
Slide 65: Overview of Oando Senior Management
Overview of Oando Senior Management Group Leadership Group Chief Executive Jubril Adewale Tinubu Deputy Group Chief Executive Omamofe Boyo CEO, CEO, CEO, CEO, Oando Energy Resources Oando Energy Services Oando Gas & Power Oando Downstream Pade Durotoye Bandele Badejo Bolaji Osunsanya Yomi Awobokun C
Slide 66: Overview of Oando Senior Management
Overview of Oando Senior Management Wale Tinubu Omamofe Boyo Group Chief Executive, Oando PLC Deputy GCE, Oando PLC Wale Tinubu has pioneered the execution of world-class Omamofe Boyo is a Director of Oando Energy Resources initiatives in the region as an ethical business leader, as well as the Depu
Slide 67: Overview of Oando Senior Management
Overview of Oando Senior Management Ayo Ajose-Adeogun Femi Adeyemo Chief Strategy Officer Chief Financial Officer Over 20 years experience in engineering design and Mr. Adeyemo was appointed as Group Executive commissioning, business strategy development and IT Director on 30 July 2009 and as the Ch
Slide 68: Oando's Core Values - TRIPP
Oando’s Core Values - TRIPP All employees are required to work together as a team; assist fellow employees Teamwork and stakeholders to meet their obligations Company and client information is used solely for the benefit of the company Respect and its clients, and not for personal benefit. All emplo
Slide 69: Overview of EHSSQ Policies and Track Record
Overview of EHSSQ Policies and Track Record Company requires its managers and supervisors, as well as all employees, to demonstrate a Leadership, commitment to the EHSQ policies of the Company Commitment The commitment includes ensuring new employees and contractors receive appropriate induction and
Slide 70: Contact Details
Contact Details Tokunboh Akindele Head, Investor Relations takindele@oandoplc.com 67
Slide 71: www.oandoplc.com
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