Oando PLC Presentation to Shareholders Recapitalisation Initiatives October, 2012 www.oandoplc.com 1
Contents Oando PLC Overview Year in view Corporate Actions Impact of Corporate Actions 2
Asset Overview Oando is the leading indigenous oil and gas player in Nigeria Upstream Division Midstream Division Downstream Division Exploration & Production Energy Services Gas & Power Supply & Trading Marketing Market Position A leading indigenous player #1 #1 #1 #1 Description Rapidly expanding business line Primary assets are located in Nigeria Largest swamp drilling fleet in Nigeria First private sector company to enter gas distribution in Nigeria Consists of: GNL APL EHGC CHGC Largest indigenous supply and trading player in the sub-saharan region. 12% market share in PMS importation. Nigeria s leading retailer of refined petroleum products with 13% market share. Large distribution footprint with access to over 1,500 trucks and 150m litres storage capacity. Key Assets 94.6% ownership of OER Producing assets: OML 125 & OML 56. Development & appraisal: OML 134, OML 90, OML 13 & OPL 236. Exploration: OPL 278, OPL 282, OPL 321, OPL 323, OML122, JDZ, Block 26 & Rubai Licences 4 swamp rigs: 3 Working Assets and 1 under refurbishment. Drill bits and engineering services Total fluids management. 100 km gas distribution pipeline in Lagos. 128 km gas pipeline in the East of Nigeria spanning Akwa Ibom and Cross River states. Akute captive Power Plant Riv Gas. Central Processing Facility Trading desks and operations in Nigeria and Bermuda. Trading consultants in the UK and Singapore. 500+ retail outlets in Nigeria, Ghana and Togo 8 terminals (159.5ML) 3 Aviation fuel depots 2 lube blending plants (55m litres / annum) 7 LPG filling plants 3
Year in View www.oandoplc.com 4
Oando Energy Resources (OER) OER commenced trading on the Toronto Stock Exchange on 30 th July, 2012. The Company has an ownership interest as follows: Oando: 94.6% Public: 5.4% Its portfolio consists of 9 assets in the Gulf of Guinea which are at varying stages of upstream operations exploration, development and production. Evolution of OER Awarded a 45% interest in the Obodeti & Obodugwa marginal fields (OML 56) Awarded a 60% interest in OPL 278 and operator status. Awarded a 95% interest in OPL 236 and operator status. Acquired 78% of Equator Exploration Ltd. (EEL) Acquired a 40% interest in the Qua Ibo marginal field (OML 13) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Awarded a 4% interest in OPL 282. Acquired a 30% interest in the Akepo marginal field (OML 90) Acquired a 15% stake in OML 125 & OML 134. *Information is as at 3 rd October, 2012. EEL awarded 100% of Blocks 5 & 12 in Sao Tome EEZ Oando Energy Resources lists on TSX 5
Corporate Actions www.oandoplc.com 6
Corporate Actions Will result in a more robust balance sheet management and provide a basis for sustainable growth. Pipeline Downstream Business Combination This will see Oando consolidate its #1 market position in the downstream segment by partnering with a global market leader. Capital Raising Through a Rights Issue to raise at least N35Bn in equity to shore up the equity capital base and optimise the balance sheet for future growth. Equity Investment into OES By an institutional investor to recapitalise its balance sheet and provide a basis for sustainable growth in the rigs business. 7
Corporate Action (OMP) JV Structure Oando Plc 100% OMP OST Oando Downstream BEFORE Oando Downstream AFTER New Joint Venture Major Downstream Business Oando Downstream New JV Company Major Downstream Business 50% 50% Transaction Highlights Oando s Downstream operations combined with a major downstream business resulting in: Oando owning a percentage of an enlarged company with major trading partners. Oando contributing shares in OMP in exchange for shares in the Joint Venture Company. Debt owed by Oando to OMP will be assumed by Joint Venture Company. 8
Corporate Action (OES) Corporate Structure Equity OES Current Balance Sheet 0% 100% Debt BEFORE AFTER Equity Injection Institutional Investor Increase Equity OES New Balance Sheet Debt Decrease Transaction Highlights Oando is in discussions to receive a new equity infusion for recapitalisation of the Energy Services Business resulting in: Facilitation of growth aspirations. Improvement in Group s debt and liquidity positions. Boost in the Group s PAT and potential dividend yields. 9
Capital Raising Initiative (PLC) Balance Sheet As at 29 June 2012 Equity, N95Bn Debt, N171BN Balance Sheet Post Capital Raise Equity, N130BN Debt, N171BN Transaction Highlights Oando plans to raise N35Bn through Rights Issue resulting in: Debt reduction. Improved liquidity position and liability management for the Group. Boost in the Group s PAT and potential dividend yields. *N50Bn Trade Finance excluded from Debt Profile 10
Impact of Corporate Actions www.oandoplc.com 11
Projected Balance Sheet After Corporate Actions Balance Sheet As at 29 June 2012 Equity, N95BN Debt, N171BN Balance Sheet Post Corporate Actions Equity, N130BN Debt, N121BN Transaction Highlights The resultant Balance Sheet will have a Debt: Equity gearing ratio < 1 due to the following actions: Net Debt Reduction by up to N50Bn from Business Combinations Equity Increase by up to N35Bn from capital raise *N50Bn Trade Finance excluded from Debt Profile 12
Conclusion Overall Significant Impact of our actions Recapitalisation of upstream companies balance sheets from near 100% leverage to appropriate equity levels; Boost in profitability and liquidity by reducing group debt service burden; Ring-fence group assets from the liabilities of certain key subsidiaries e.g. OER and OES; Builds a platform for further growth from its dominant industry positions; Operational synergies achievable from the downstream alliance; and Opportunity to form an alliance with one of world s largest commodity trading company; 13
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