Oando Plc has agreed to a Management buy-out of Oando Energy Services, the Plc’s subsidiary involved in rig contracting and oilfield services.
In effect, the management of Oando Energy Services are paying for 60% of the company, with Oando Plc holding 40%. It is not clear, as of the time of writing, how much the deal cost.
Oando Plc formally elected to become a pure E&P company in December 2015, proposing to sell significant equity in everything other than the hydrocarbon acreages it holds.
It specifically requested Shareholders to approve, on December 7, 2015, the sale of the entire Oando Energy Services (OES) Limited, a 16 year old subsidiary which owns and operates four swamp rigs, all of which are currently without work. Oando claims that it invested over $450Million in the acquisition refurbishment and upgrade of these idle rigs, including OES Passion, OES Integrity, OES Professionalism, OES Teamwork and OES Respect. Also up for sale were the oil service segments of OESL, which include Drilling and Completion Fluids Services as well as Drill Bits and Engineering Services.
OESL is the last of the non-acreage holding, non E&P licenced subsidiaries that Oando has sold. Oando Plc sold 51% of the voting rights and 60% of the economic rights of its filling station and petroleum products business to trading house Vitol and Helios Investment Partners for $276MMin 2015. In September 2016, it agreed to sell 49 per cent equity stake in its midstream subsidiary, Oando Gas and Power (OGP) Limited to a new major investor for $115.8Million to a Special Purpose Vehicle (SPV) owned by Helios Investment Partners LLP (Helios).
Much earlier, Oando sold out of the 10 Megawatt (MW) Alausa Power Limited (ALPL), the conception of a Power Purchasing Agreement between the company and the government of Lagos State, Nigeria’s economic powerhouse. The company s also sold its share of Akute Power Limited, a project company set up to develop and operate a 12.15MWIndependent Power Plant (4Nos. 3MW gas-fuelled engines) for Lagos Water Corporation.