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TRANSCRIPT
1
Strictly Private and Confidential
January 2010
“NSE Quoted Company of the Year” 2003, 2004, 2007
*ThisDay Oil & Gas Company of the Year 2008
Building Sub-Saharan Africa’s
Leading Integrated Energy Solutions Provider
Oando Plc
Private & Confidential.
No part of this presentation can be discussed or shared without the written permission of the management of Oando plc
2Contents
1.Group Financial and Operational Overview
2.Divisional Overview: Upstream
3.Divisional Overview : Midstream
4.Divisional Overview: Downstream
5. Rights Issue Highlights
6. APPENDIX
3
GROUP FINANCIAL AND OPERATIONAL OVERVIEW
4
Supply &
TradingEnergy
Services
Gas &
Power
Refining &
Terminals
Group Operations
Midstream Division
11
Mo
nth
, 2
00
9
Fin
an
cia
ls
(US
$M
)D
escri
pti
on
Key a
ssets
• Consists of Gaslink
Nigeria Limited, Akute
Power and East
Horizon Gas Company
Limited
73.8
13.2
6.0
• 128 km gas pipeline in
the East of Nigeria
• 100 km gas
distribution pipeline in
Lagos
• 12 MW Akute Power
Plant
• Leading indigenous
drilling contractor in
Nigeria with special
interest in swamp and
shallow offshore
operations
67.8
56.0
25.8
• 5 rigs
• Drill bits and
engineering services.
• Total fluids
management.
• Rapidly expanding
business
• Primary assets are
located in Nigeria
Revenue 76.8
EBITDA 66.7
Net Profit 15.1
• OPL 236
• OPL 278
• OPL 282
• OML 56
• OML 125
• OML 134
• OML 90
• OPL 321
• OPL 323
• JDZ 2
11 months 2009 NGN/USD exchange rate: N150/1USD used for convenience of translation
Oando Plc generated an additional $24.33m in non-operating income
• Nigeria’s leading oil
retailer with 18%
market share
• Operations in Nigeria,
Togo, Ghana and
Benin
967.8
72.3
22.9
• 562 retail outlets
• Six terminals (120,000
MT)
• 3 Aviation fuel depots
• Two lube blending
plants (55m litres
per annum)
• Ten LPG filling plants
• Largest indigenous
supply and trading
player in the sub-
Saharan region
• Trading desks in
Nigeria, the UK and
Singapore
• Product pipeline
construction at Lagos
Port
• 210,000MT product
terminal at Lekki Free
Trade Zone (LFTZ)
n/a
n/a
n/a
• Ongoing FEED for
refined products tank
farm
• Acquired 450 hectares
of land in LFTZ
• Completed pre-
feasibility studies for
future construction of
a 360kbopd refineryOan
do
: N
igeri
a’s
lead
ing
in
dig
en
ou
s in
teg
rate
d e
nerg
y s
olu
tio
ns c
om
pan
y
Exploration &
Production Marketing
Downstream DivisionUpstream Division
1,750.5
6.9
5.5
5
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09
Total Mobil NSE Index Oando Conoil
Select balance sheet itemsOverview
USD millions 11 months
2009
2008 2007 2006
Non-current assets 996.38 982.34 641.78 269.40
Current assets 666.12 1,225.05 761.71 465.65
Total assets 1,662.50 2,207.39 1,403.49 735.05
Capital and Reserves 350.07 341.42 376.35 184.05
Non-current liabilities 346.80 385.59 201.41 34.87
Current liabilities 965.63 1,479.22 825.73 516.13
Total liabilities and
equity
1,662.50 2,207.39 1,403.49 735.05
Borrowings 771.46 1,407.56 605.03 326.63
Cash & cash equivalents 50.55 374.64 147.88 60.12
Net debt 720.91 1,032.92 457.15 266.51
Oando Plc (Oando) turnover for 11months, 2009 is
$2.57Bn
– Due mainly to an increase in Marketing and Trading
activity and upstream production
Best performing stock over last two years in its peer
group
– Outperformed Nigerian Stock exchange 2009, 18%
increase in share price from Jan - Nov
– Underpinned by strong operating performance over
last 5 years
Continued focus on upstream division expected to
increase profitability and returns considerably
Operating profit is defined as income before tax and interest expense
11 months 2009 NGN/USD exchange rate: N150/1USD used for convenience of translation
Select income statement itemsUSD millions 11 months
2009
2008 2007 2006
Revenue 2,603.4 2,686.5 1,501.8 1,647.8
Cost of sales (2,423.7) (2,360.4) (1,328.5) (1,516.4
)
Gross profit + Other
operating income
348.2 326.1 173.3 131.4
Operating costs (excl depr) (165.4) (137.2) (97.3) (74.9)
EBITDA 182.8 188.9 76.0 56.5
Depreciation (0) (50.8) (11.9) (7.9)
Finance costs (62.3) (47.1) (3.4) (12.8)
Profit before income tax 120.6 91.0 60.7 35.8
Income tax (21.0) (16.3) (10.9) (13.8)
Profit after tax 99.6 74.7 49.8 22.0
Share price performance
Financial and Operational Overview
+18%
- 26%
- 56%
- 68%
- 26%
6
Supply
&
Trading
Energy
Services
Gas
&
Power
Refining
&
Terminals
Strategic Road Map
Midstream Division
Near
Term
Cu
rren
t
• Complete ongoing Gas
pipeline projects
• Enhance operations
and sign new
customers
• Fully contract Rig fleet
to International Oil
Companies
• Enhance Production
from producing Assets
and accelerate near
term development
opportunities
11 months 2009 NGN/USD exchange rate: N150/1USD used for convenience of translation
Total CAPEX Budget of $186M
• Increase distribution
efficiency and
profitability and
expansion into high
margin volumes, Lubes
& LPG distribution
• Increase white products
supply along West
African coast
Transformation from a downstream giant to a full value chain indigenous champion across West Africa
Exploration
&
ProductionMarketing
Downstream DivisionUpstream Division
CA
PE
X
Bu
dg
et
2010
Med
ium
Term
• Consolidation of
position as market
leader and expansion
into other countries
• Target 100kbopd by
2013 achieved through
a mixture of organic
growth and acquisitions
• Establish trade in sub-
Saharan region• Commence FEED
• Expand white product
storage facilities in
Nigeria
• Expand gas distribution
network in Nigeria
• Leverage local content
policy opportunities
(70% LC by 2010)
• Expand product
offering (MWD, etc)
• Harness preferential
resource access due to
indigenous status
• Divestment of up to
49% and listing on the
NSE
• Leverage expected
deregulation in sector
to enhance profits from
high margin products
$39M$55M$80M $11M NA$1M
• Expansion of Nigeria’s
midstream business
and entry into West
Africa (Ghana, Togo
and Benin)
• Expansion of business
across the sub-
Saharan region.
• Development of
product pipelines in
Lagos
• Development of a
210,000MT terminal
facility in Lekki Free
Trade Zone
7
DIVISIONAL OVERVIEW – UPSTREAM
8
ASSET MAP
OML 125
OML 134
Akepo (OML 90)
OPL 282OPL 278
OPL 236
Obodeti/
Obodugwa
(OML 56)
Producing
Appraisal/
Development
Exploration
Core 2P + 2C Reserves: 55.5mmboe
OML 323
OML 321
Block 2JDZ
Exploration & Production: Asset Portfolio
OML 125,
9.8
OML 134,
7.9
OML 90, 1.8
OML 56,
3.7
OPL 236,
32.3
Block Area Wate Depth Date of Working Work
(license) Major Field(s) Type Km2
(m) Assignment Interest Operatorship Program
OML 125 Abo oil / gas 1216 750 Q4 2008 15% NAE Production
OML 56 Obodeti / Obodugwa oil 68.5 NA Q1 2006 45% ENERGIA Production
OML 90 Akepo oil 25.7 20 Q4 2008 30% SOGENAL Development
OML 236 Ukana South gas 1652 NA Q1 2007 52.25% OANDO Development
OML 134 Oberan oil 1131 750 Q4 2008 15% NAE Appraisal
OPL 278 Ke oil 91.9 20 Q1 2006 60% OANDO Exploration
OPL 282 NA oil 699 NA Q3 2006 4% NAOC Exploration
OML 122 Bilbari oil / gas 5% oil / 12 % gas Peak Exploration
OPL 323 NA oil / gas 30% KNOC Exploration
OPL 321 NA oil / gas 30% KNOC Exploration
JDZ Block 2 NA oil / gas 9% Sinopec Exploration
- Oando's interest in marginal fields (Obodeti / Obodugwa and Akepo) is delineated strictly by the fields, therefore only a subset of the license
- Economic terms for Akepo are that Oando pays 100% of costs to firt oil and economic interest ranges from 72% to 54% as per farm-in agreement terms.
- Oando owns 78% interest in Equator Exploration Limited
Equator Assets
9Exploration & Production: Reserves Summary
*As of 30/09/2009.
Block Field
Working
Interest
Reserves
(mmbbls)
Remaining
Reserves
(mmbbls)
Net Interest
(mmbbls)
Reserves
(Bcf)
Net Interest
(Bcf)
Total Net
Interest
(mmboe)
OML 125 Abo Main 15% 53.5 53.5 8.0 72 10.8 9.8
OML 90 Akepo 30% 6.0 6.0 1.8 - - 1.8
OML 56 Obodeti/ Obodugwa 45% 8.3 8.3 3.7 - - 3.7
OPL 236 Ukana South 95% 204 193.8 32.3
67.7 67.7 13.5 276.0 204.6 47.6
OML 134 Oberan 15% 52.5 52.5 7.9 - - 7.9
120.2 120.2 21.4 276.0 204.6 55.5
Contingent
Proven plus Probable
10Exploration & Production: Resources Summary
*Risked Net Interest values of Equator Assets as indicated above reflect Oando’s 78% interest in Equator
Block Field Working Interest
Unrisked OIIP^
(mmbbls)
Prob. Of
Success
Recovery
Factor
Risked
Recovered
Reserves
(mmbbls)
Risked Net
Interest
(mmbbls)
OML 125 Abo Intermediate 15% 293 55% 33% 53.0 8.0
Abo South East 15% 619 50% 33% 102.0 15.3
Aboribo 15% 707 37% 33% 86.0 12.9
Abo North Deep 15% 316 44% 33% 46.0 6.9
Abo North West 15% 397 58% 33% 76.0 11.4
Eba 15% 246 54% 33% 44.0 6.6
Abo South 15% 23 73% 33% 6.0 0.9
Abo South West 15% 36 43% 33% 5.0 0.8
A151 15% 31 - - - 0.0
A254 15% 42 - - - 0.0
Okodo 15% - - - 16.0 2.4
Shell: Deep Prospects 15% 1310 - - - 0.0
4,020.0 434 65.1
OML 134 Oberan unpenetrated 15% 580 37% 32% 69.0 10.4
Engule Structure 15% 158 30% 33% 16.0 2.4
Engule Deep 15% 159 30% 33% 16.0 2.4
Udoro Deep 15% 385 30% 33% 38.0 5.7
Ologure 15% 311 18% 33% 18.0 2.7
1,593.0 157 23.6
OPL 278 Ke 60% 20.1 85% 33% 5.6 3.4
Prospect A 60% 28.2 70% 33% 6.5 3.9
Prospect B 60% 15.3 54% 33% 2.7 1.6
63.6 14.9 8.9
OPL 282 Prospect A 4% 56.5 30% 33% 5.6 0.2
Prospect B 4% 52 30% 33% 5.1 0.2
Prospect C 4% 55 30% 33% 5.4 0.2
163.5 16.2 0.6
OPL 122 (Equator Asset) 5%(oil); 12%(gas) 84% 42.0 1.6
OPL 323 (Equator Asset) 30% 34% 643.0 150.5
OPL 321 (Equator Asset) 30% 27% 275.0 64.4
JDZ 2 (Equator Asset) 30% 26% 352.0 82.4
Total (Excluding Equator Assets) 5,613.0 591.0 98.2
Grand Total 1,903.0 397.0
11Exploration & Production: Operational Overview
Incorporated to tap into vast oil and gas
resources in the Niger Delta and other
opportunities within Gulf of Guinea
Purchased its largest E&P asset from Agip
in 2008
– 15% of producing OML 125 and OML
134, deepwater Nigeria for US$188m
Net 2P+2C reserves of 55.5 mmboe
2009 average production: 4,500bopd, Dec
2009: 5,000bopd
2010 average production: 7,800bopd, Dec
2010: 11,000bopd
– Production of 11,600bopd in 2013 from
existing assets
– Mergers and Acquisitions to increase
production to >100,000 bopd by 2013
Overview
Working on more than US$1bn of
transactions
– Preferred partner/buyer for interests oil
majors want to divest
– Probability of success aided by
indigenous status, corporate profile and
reputation
12Exploration & Production: 2010 Activity Plan
Significant activity to exit 2010 at 11,000 bopd and derisk development/exploration assets
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10
OML 125
Abo-12 Drilling
Seismic Acquisition & Processing
OML 134
Seismic Acquisition & Processing
OPL 278
Seismic Acquisition & Processing
OPL 282
Seismic Acquisition
AKEPO
Akepo Phase 2 Field Development
Akepo 2 Drilling
Obodeti/Obodugwa
Field Development (Pipeline Construction)
Ob/Ob4 Drilling (Re entry)
New Well Drilling
Equator Assets
JDZ Block 2 (Complete analysis of well data)
13Exploration & Production: 2010 Production Outlook
Net Production to hit 11,000bopd in 2010
Average Production per day (Thousand barrels)
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10
OML 125 4.5 4.5 4.4 4.4 4.3 4.3 4.2 4.2 4.1 4.1 4.1 4.0
Obodeti/Obodugwa 0.5 0.5 0.5 1.1 1.1 2.0 2.3 2.3 3.1 3.1 3.2 3.1
Akepo - - - - 1.4 1.8 2.2 2.2 2.2 3.2 3.5 3.7
Total 5.0 4.9 4.9 5.5 6.9 8.1 8.6 8.6 9.4 10.3 10.7 10.9
-
2.0
4.0
6.0
8.0
10.0
12.0
Akepo
Obodeti/Obodugwa
OML 125
Th
ousand b
bls
per
day
14Exploration & Production: 5 Year Production Outlook
Production set to grow to 100,000bopd by 2013 – margin expansion, earnings diversification
Production - Barrels per day
0
20,000
40,000
60,000
80,000
100,000
120,000
2009 2010 2011 2012 2013 2014
New Field Acquisition
New Block Acquisition
OML 236 (boe)
OML 90
OML 56
OML 125
Production - Barrels per day
2009 2010 2011 2012 2013 2014
OML 125 4,141 4,500 4,455 4,410 4,365 4,320
OML 56 405 2,430 2,228 1,559 1,091 764OML 90 0 1,668 3,835 3,268 2,030 1,015
OML 236 (boe) 0 0 0 0 4,144 4,144
New Field Acquisition 0 0 4,000 8,000 9,400 10,520
New Block Acquisition 14,000 55,000 89,000 89,000 88,000
Total 4,546.0 22,598.0 69,517.6 106,237.6 110,030.6 108,762.7
Asset Category
Producing/Development 4,546.00 8,597.99 10,517.63 9,237.55 11,630.63 10,242.67
Exploration - - - - - -
Acquisition - 14,000.00 59,000.00 97,000.00 98,400.00 98,520.00
15Exploration & Production: Key Opportunities & Outlook
Maximise exploitation of existing assets
Increase near term production
Prove up existing reserve base e.g. drilling
of OML 134 in Q1 2010
Asset build up through strategic acquisitions
Anticipated divestitures from International
Oil Companies (IOCs)
Acquisition of expired licenses &
companies with choice assets
Exploit & harness benefits of indigenous status
Asset growth through upcoming license
bidding round
Partnerships with IOCs / local players
focusing on onshore swamp regions
Local content policy & preferential access
Favourable industry dynamics
Lack of availability of swamp rigs
International players increasing preference
for offshore vs. Nigerian swamp operations
Petroleum Industry Bill
Likely positive impact on fiscal terms and
reform the oil and gas sector and the
regulatory bodies in Nigeria;
incorporate the main JV operations into
limited liability companies, in order to solve
funding issues;
consolidate tax laws and other oil and gas
legislation in Nigeria; and
formalise existing Local Content Policy into
a broader legislation that will encourage
domestic participation in the oil and gas
industry.
Strategic Opportunities Outlook
Build a balanced portfolio and become one of the largest E&P companies in Nigeria
16Energy Services: Operational Overview
Commenced business in 2005 as an integrated
oilfield service company serving E&P companies in
Nigeria
Diverse portfolio:
– Drilling rig services
– Drill bits and engineering services
– Drilling fluids management
Acquired 5 swamp barge rigs
– 2 are on contract with IOC’s and 2 are currently in
a tendering process
Overview
Asset summary
Rig Name Rig Type
Pressure
Output
Horse
Power Drilling Depth Application
Searex 6 Swamp Barge 10,000psi 2,000 20,000ft+ Normal drilling
Searex 12 Swamp Barge 10,000psi 2,000 20,000 ft+ Normal Drilling
Constitution Swamp Barge 15,000psi 3,000 25,000 ft+
High pressure, high
temperature (HPHT)
wells
Rig 1 Swamp Barge 2,000 30,000ft + Normal Drilling
Rig 2 Swamp Barge 2,000 30,000ft + Cantilever Rig- Normal
Drilling
Current rig fleet provides OES with 85% market share
in the swamp category
– EBITDA margins are between 45–50%
Have entered into strategic alliances with reputable
international drilling companies:
– Halliburton Energy Services
– Baker Hughes
17Energy Services: Key Opportunities & Outlook
Partnerships with IOCs focusing on onshore
swamp regions
Benefit from Government local content
policy & indigenous status (70% local
content capacity in 2010)
Distinct advantage with community
relations in operating in Niger Delta
region
Broadening of oilfield service offering to
include full spectrum of drilling services
Favourable industry dynamics
Lack of availability of swamp rigs
International players increasing
preference for offshore vs. Nigerian
swamp operations
Strategic Opportunities Outlook
To be the leading drilling services provider in onshore and swap areas in Nigeria
18
DIVISIONAL OVERVIEW – MIDSTREAM
19Gas & Power: Operational Overview
Gaslink Nigeria Limited
Signed a PPA with the Lagos State Water
Corporation to build 12.15 MW power plant
– Power Plant to be commissioned in Q1, 2009
Positioned to become leading provider of captive
power solutions in Nigeria
Gaslink Nigeria (GNL) has expanded its Lagos
pipeline network to 99km in 5 years
– Increased throughput capacity from
22,000scm/h to 65,000 scm/h
Provides gas to over 90 industries in different
industrial zones in Lagos State
Exploring possibility of supplying gas to Benin,
Ghana and Togo upon completion of West African
Gas pipeline
Akute Power Limited
Commenced development of 128Km gas pipeline
in the East of Nigeria spanning Akwa Ibom and
Cross River states
Pipeline will open up eastern gas market
– Will allow Oando to support local industries in
hedging against unreliable power supply
Opens opportunity to provide dedicated gas and
power to captive customers
– Includes manufacturing facilities and gas to
new independent Power Plants
– Already identified customer demands of
50scm/h.
Gaslink Nigeria
Limited
Akute Power
East Horizon Gas
Company
Oando Gas & Power
East Horizon Gas Company
20Gas & Power: Key Opportunities & Outlook
Leading indigenous gas supplier in Nigeria
Leverage gas infrastructure to monetize group
E&P gas assets for electricity supply
Leverage premier domestic gas distribution
network to provide client energy solutions
including captive power plants e.g. 12.15MW
Akute power plant
Capture & capitalize on opportunities from
deregulation of electricity sector
Broadening gas distribution outreach to
Eastern Nigeria; target sales > 100mmscf/d
Grow reach via West African expansion
Ghana expansion – $1bn strategic
partnership with GNPC for Jubilee Gas
Increased domestic gas consumption
Increase demand for captive power plant
solutions as grid infrastructure rapidly
deteriorates
Acceleration in ongoing deregulation of
electricity sector
Strategic Opportunities Outlook
21
DIVISIONAL OVERVIEW – DOWNSTREAM MARKETING
22Marketing: Operational Overview
Key strategic assets
Nigeria
518 retail outlets
6 terminals in key geographic locations with
combined 120,000MT of storage
3 aviation fuel depots in Lagos, Abuja and Kano
10 LPG plants
2 lubricant blending plants with combined
capacity of 55m litres/annum located in Kaduna
and Apapa
2 bitumen plants with a combined capacity of
12,000MT located in Apapa and Port-Harcourt
1,200 trucks through partnerships with several
transporters
Ghana - 24 retail outlets
Togo - 16 retail outlets
Biggest petroleum brand in Nigeria
– 18% market share (2008)
In 2007, marketing activities were reorganised
into Oando Marketing Limited through a Scheme
of Arrangement
Strong cash-generative business
– 52% growth in turnover and 2.9x growth in
profitability over last 5 years (excluding inter-
company sales)
Benefits from Oando’s leading physical supply
and trading business
Improving gross margin line by increasing
participation in higher margin product lines (e.g.
Lubes, LPG)
Overview
40
25
39 25
22
211222
29 15
3337
33
20
19
25
71
Spread of Retail Stations
23
Build on existing dominant position, improve margins via efficiencies, unlock capital
Consolidate leadership position & expand
franchise
Asset sweat existing retail assets
Partnerships with complementary
service providers e.g. fast food
High-grading by promoting & driving higher
margin product volumes e.g. LPG & lubes
Working capital optimization
Post deregulation i.e. elimination of late
subsidy payments
Reduce credit & speed up collections
Impending deregulation of all white products
including PMS & HHK
Increased drive for substitution of HHK with
LPG
Increased consumption of white products
Regulatory / policy changes to encourage
investment in infrastructure
Strategic Opportunities Outlook
Marketing: Key Opportunities & Outlook
24Supply & Trading: Operational Overview
Business activities include trading of refined
and unrefined petroleum products to refiners,
marketing and trading companies worldwide
Split into Oando Supply and Trading (‚OS&T‛)
and Oando Trading Limited (Bermuda)
(‚OTL‛)
– OS&T responsible for supply of refined
petroleum products into Nigeria
(including to OML)
– OTL responsible for supply into other
markets
Largest indigenous petroleum products
importer in the sub-Saharan region
– Over 1.3 million MT of white products
(PMS, AGO & Jet) imported into Nigeria
in 2008
Lower margin but high turnover business
Overview
Maintain profitability, maximise throughput, capture West African opportunity
Steady cash-flow business
– Liquidity provider for Group in the short
term
Strong management team with over 40 years
combined trading experience
Trading desks in Nigeria, the UK and
Singapore
Expanding into other West African Markets e.g.
Ghana, Togo, Liberia
Has a track record of 100% delivery on all its
supply contracts
Traded products include Jet A1, LPG,
Gasoline, DPK, Diesel, Low/High Pour Fuel Oil,
Naphtha, Base Oil and Bitumen
25
To be a truly global energy trading company focusing on SSA
Improve throughput and efficiencies
Increased efficiency of importation
process
Increased distribution across West
African coast
Improve global partnerships to increase
global access to products
Poised to benefit from impending deregulation
Working capital efficiencies due to
removal of delayed subsidy payment
Increased competition favouring
incumbents
Impending deregulation of the downstream
petroleum sector
Increased competition amongst smaller
players
Strategic Opportunities Outlook
Supply & Trading: Key Opportunities & Outlook
26Refinery & Terminals: Operational Overview
Newest business unit of the Oando Group
Expected to be highly profitable, taking
advantage of the current gasoline deficit in
Nigeria
– Expected to remain a gasoline deficit
market until 2025, even if refineries
operate at 100% capacity
Currently developing state-of-the-art refined
products import terminal with 210,000MT
capacity
– Supported by first privately-operated
Single Point Mooring
– Located in Lekki Free Trade Zone
– First phase expected to be complete in H1
2011
Overview
Poised to take advantage of impending deregulation and harness synergies across entire value chain
Currently developing first greenfield
petroleum refinery in Africa in 20 years
– Capacity of 360,000bopd, enough to
satisfy half of Nigeria’s import requirement
– ‘Bankable' feasibility study conducted by
Wood Mackenzie and Foster Wheeler
– Purchased 450 hectares of land for
refinery development
Entry into Refinery & Terminals sectors
completes its position in all segments of the
energy value chain
No revenue generated to-date
27
Development and growth of LPG sector
Gear returns through improved efficiencies
Bypassing port congestion through own
jetties (current import demurrage in
order of $1million per shipment)
Numerous strategic projects under
consideration include
Expansion of storage facilities
Lekki free trade zone
Impending complete deregulation of the
downstream sector
Continued shortage of domestic supply of
white products for the foreseeable future
Continued bottlenecking at key infrastructure
supply points
Increased LPG consumption per capital.
West African per capital consumption is
7x Nigerian avg. consumption
Strategic Opportunities Outlook
Refinery & Terminals: Key Opportunities & Outlook
28
RIGHTS ISSUE HIGHLIGHTS
29
29
Issuer Oando Plc (‚Oando‛)
N21 Billion ($140M)
Vetiva Capital Management Limited
FCMB Capital Markets Limited
Stanbic IBTC Bank Plc
N1,000,000,000 comprising of 2,000,000,000 Ordinary Shares of 50 kobo each
N452,542,314 Comprising of 905,084,628 Ordinary Shares of 50 Kobo each
Rights Issue of 301,694,876 ordinary shares of 50 kobo each at N70.00 ($0.47) per share
At a 25% discount to Market Price
One (1) new share of every three (3) Ordinary Shares held as at close of business on Friday 18, December
2009
In full on Acceptance
Size
Lead Issuing Houses
Joint Issuing House
Share Capital
•Authorized
•Issued and Fully Paid
Method of Issue
Payment
Underwriting
Status
Provisional Allotment
Issue Price
The rights issue is not being underwritten
The new shares to be issued shall rank pari passu in all respects with the outstanding issued ordinary
shares of the Company
Deutsche Securities (SA) (Pty) LimitedSponsor to Issuer in South
Africa
Summary of Terms
PriceWaterhouseCoopersAuditor
30
30Utilization of Proceeds & Profit Forecast
1
2
3
The Rights Issue is an important step for Oando, towards providing
operational capital to fund the growth of the upstream business, and
short & medium term investments in its gas and power business
segment. The Company also intends to partly restructure the financing
of its upstream assets
Utilization of Proceeds
Upstream Asset
Refinancing:
Est N15.0Bn: $100M
Oando requires additional
capital for refinancing existing
facilities used to procure its
upstream assets. This will
further reduce leverage and
maximize future shareholder
value by increased Return on
Equity
Operational Capital
Development & Upstream
Business:
Est:N4.0Bn: $27M
Oando intends to use part of
the capital raised to finance the
operation of upstream assets,
currently under development,
when they become fully
operational
Working Capital:
Est:N1.6Bn: $10.7M
As Oando continues to expand
its operations, it is expected
that funds would be required to
finance increased scope of day
to day operations
Profit & Loss
$ ’Millions 2009 Est. 2010 2011 2012
Revenue 2,640.6 3,612.9 4,604.5 5,642.4
Cost of Sale (2,377.3) (3,041.8) (3,706.7) (4,523.8)
Gross Profit 263.3 571.1 897.8 1,118.6
Operating
Profit
173.0 322.3 533.6 691.9
Net Interest
Expense
(72.1) (162.3) (174.3) (168.4)
PBT 101.0 160.0 359.3 523.6
PAT 68.7 108.8 244.3 356.0
Dividend (18.11) (27.18) (38.29) (37.68)
No of Shares
Outstanding
905,085 1,206,780 1,206,780 1,206,780
EPS ($) 0.08 0.09 0.20 0.30
Profit Forecast
Oando expects revenue to grow at a CAGR of 24% over the next 3
years.
The Company also expects PAT to achieve a CAGR of 55% over the
next 3 years.
*2009 PAT estimate based on outlook from H1, revised numbers on page 6 of this presentation.
31
31
25-01-2010 Acceptance List opens
Acceptance List closes
Receiving Agents make returns
Lift technical suspension on existing shares
Forward allotment proposal and draft newspaper announcement to SEC
Receive SEC approval of the allotment
Return excess/rejected application money
Allotment announcement
Dispatch share certificates/credit CSCS account
Forward Declaration of Compliance to The NSE and THE JSE
Submission of summary report to SEC
Listing of newly issued shares/Trading commences
19-02-2010
08-03-2010
09-03-2010
29-03-2010
31-03-2010
02-04-2010
02-04-2010
16-04-2010
19-04-2010
21-04-2010
21-04-2010
Date Activity
Indicative Timeline
32
APPENDIX
33
Femi Adeyemo, Finance Director & Group CFO
– Ex McKinsey and Co.
– Primarily focused on equity and debt funding of the large pipeline of projects and
M&A activities of the group
Key Executive Management
Wale Tinubu, Group CEO
– Entrepreneur who started Ocean and Oil as physical oil products trading business
and built it into the Oando of today
– UK educated and trained Lawyer
– Key decision maker and driver behind all business development
Mofe Boyo, Deputy Group CEO & OML CEO
– Handles internally focused and government matters
– Co-owner of Ocean and Oil holdings which owns a minority stake in the publicly listed company
34
Supply
&
Trading
Energy
Services
Gas
&
Power
Refining
&
Terminals
Management Structure
Midstream Division
Exploration
&
ProductionMarketing
Downstream DivisionUpstream Division
Babatunde Ogunnaike
CEO Oando Exploration &
Production
Over 30 years experience at Shell
Petroleum Development Company
Worked in Shell Petroleum
Development Company (SPDC) in 1978
as a wellsite petroleum engineer. He
later became the head of business
planning and economics, and in 1993
was assigned as Senior economics
engineer with Shell Expro - London, UK
Uche Dimiri
CEO, Oando Energy
Services
Almost 20 years oil & gas industry
experience with notable experiences in
measurements and logging while
drilling, directional drilling training and
development, accounts management,
operations and sales and marketing
Prior to joining Oando, He was the
world wide drilling training manager,
Schlumberger D&M, England, with
responsibility for implementing
strategic directions for world wide
directional drilling training
Bolaji Osunsanya
CEO, Oando Gas & Power
Oversees the company’s pipeline
expansion programme, the independent
power plant project as well as other
projects in the West African sub-region
Joined the former Unipetrol Nig PLC in
August 2001, as Head of Lubes and
Specialties where he was responsible
for product coordination and eventual
sales of lubricants, bitumen, chemicals,
LPG and aviation fuels
Dimeji Edwards
CEO, Oando Supply &
Trading
Joined Oando in November 2000 as the
head of the distillates trading strategic
business unit of the company
20 years oil & gas experience with
Oando and Schlumberger
Appointed a director of Oando Supply
and Trading Limited in August, 2005
Ayo Ajose Adeogun
CEO, Oando Refinery and
Terminals / CEO, Marketing
Over 15 years experience in
engineering design and commissioning,
business strategy development and IT
management
Was a member of the Corporate
Development Team from Ocean & Oil
Holdings that worked on the business
execution and process improvement
project carried out in Oando PLC
Omamofe Boyo
Deputy Group CEO
Wale Tinubu
Group CEO, Oando
Femi Adeyemo
Finance Director & Group CFO
35Partners and Advisers
Oando is supported by a host of leading Nigerian and international institutions
Supply
&
Trading
Energy
Services
Gas
&
Power
Refining
&
Terminals
Midstream Division
Exploration
&
ProductionMarketing
Downstream DivisionUpstream Division