Nigeria-based oil and gas producer and trader Oando turned around to make a profit in the six months to June after a loss in 2016 as revenue more than doubled and finance costs halved.
A Nigerian television station reported two weeks ago that Oando was the subject of a "comprehensive investigation" by Nigeria’s Securities and Exchange Commission (SEC). This was after some of its foreign investors filed a complaint about its shareholding structure following its $1.65bn acquisition of the Conoco-Phillips assets in Nigeria in 2014.
Oando said it was an inquiry, not an investigation. It described correspondence filed with the SEC as "unsubstantiated, misleading and defamatory".
Group revenue from continuing operations rose 129% to 266.9-billion naira ($848.5m) in the six months to June from 116.2-billion naira in the same period in 2016.
It posted a 14.6-billion naira operating profit, against 2016’s 31.7-billion naira operating loss, while net finance costs more than halved to 16.4-billion naira, from 35.3-billion naira.
Basic earnings amounted to seven kobo (0.02 US cents) per share, from -226 kobo previously. From March 31 Oando has disposed of its interest in Alausa Power to Elektron Petroleum Energy & Mining Nigeria. It recorded a 58.2-million naira gain on the disposal. It also sold its nonoperated interests in blocks OML 125 and 134, with effect from end-June. Although the transaction was announced in December 2015, ministerial approval was only secured this year. It booked a 4.6-billion naira gain on the disposal.
Oando is still entitled to 22.2-billion naira of crude oil entitlement from OML 125 owed by Nigerian National Petroleum Corporation (NNPC), but there is an unresolved dispute between the parties over liftings by the NNPC in 2008 and 2009.
Oando’s shares were flat at 24c on the JSE on Friday. On the Nigerian Stock Exchange they fell 2.5% to 7.8 naira.