Nigerian oil and gas exploration and production company, Oando Energy Resources (OER) has extended the closure date of its $1.68 billion ConocoPhillips acquisition from November 30, 2013 to January 31, 2014.
Under the terms of the proposed acquisition, Oando will purchase all the shares of ConocoPhillips’ Nigerian business.
“The availability of $815 million in committed credit facilities from local and foreign banks and the already paid $435m deposit place OER in good stead to finalise the financing of the balance necessary to close the $1.68bn purchase,” Head, Corporate Communications, Oando Group Plc, Dr. Alex Iruna said, confirming the company’s commitment to complete the proposed acquisition of American firm’s upstream oil and gas business in Nigeria.
Last year, Oando Energy Resources entered into agreements with ConocoPhillips to acquire its entire business interests in Nigeria. The proposed deal is said to be the biggest acquisition by an indigenous company in the history of Nigeria’s oil and gas industry.
On completion, Iruna said the acquisition would be the largest indigenous exploration and production company in Nigeria with 50,000 barrels of oil equivalent per day in production, 236 million in 2P reserves and over 500 million in contingent resources.
However, following the increase in the deposit for PDENL, the aggregate amount of the deposit for the ConocoPhillips acquisition will now be $450 million.
Oando will increase the deposit for the acquisition of the shares of Phillips Deepwater Exploration Nigeria Limited (PDENL) by $15 million and will pay the increased deposit amount to ConocoPhillips no later than December 6, 2013.
This will be in consideration for the extension of the Outside Date, which will see the price of the shares of POCNL increased by $10 million per month for the period from December 1, 2013 up to but excluding the Outside Date of January 31, 2014. The payment would be calculated on a pro rata basis where the completion date of the ConocoPhillips acquisition does not occur on the last day of the month.
“The increase in the principal amount is being borrowed in order for Oando Energy Resources to fund the increase in the deposit required to be paid to ConocoPhillips.
The additional $15 million will bear an annual interest rate of five percent and be repayable in cash on December 31, 2013. As a result of the increase in the principal amount by $15 million, the aggregate principal amount owing by Oando Energy Resources to Oando will be $401 million,” the company said.
