BY BAMIDELE FAMOOFO
Oando Plc, Nigeria’s leading indigenous energy group listed on both Nigerian Exchange Limited and Johannesburg Stock Exchange, recorded a loss after tax of N132.6billion in the financial period ended December 31, 2020.
The unaudited report released on Wednesday on the floor of the NGX, showed that turnover dropped by 15 percent to N490 billion in the review period compared to N576.6 billion in the preceding financial year.
Oando’s total borrowings in 2020 increased by 16 percent to N419.6 billion as against N362.2 billion in 2019.
A statement from the Group explained that the loss recorded in the review financial year was driven primarily by asset impairments of N84.7 billion as well as a 45 percent increase in Net Finance Costs to N58.9 billion (compared to N40.7 billion in 2019).
Commenting on the results, Wale Tinubu, Group Chief Executive, Oando PLC said: “2020 proved to be an unprecedented year for the global economy due to the impact of the novel COVID-19 pandemic. The Oil & Gas industry was no exception as the year turned out to be one of the most challenging years in its history as we witnessed the lowest oil prices since our sojourn into Nigeria’s upstream sector in 2008, thus negatively impacting our revenue during the period. This resulted in us having to impair a portion of the goodwill on our balance sheet to ensure the carrying value of our assets was a true reflection of the environment we were operating in.
“Furthermore, the second tranche funding of the settlement of a protracted and disruptive shareholder issue resulted in us taking a further impairment on a category of our financial and non-financial assets. Despite these challenges, our hedging policy and long-term off take contracts ensured our cash flows were not severely stressed during this period. Amid an uncertain operating environment, our operational performance remained on track as we grew our upstream production by 5%, whilst downstream traded volumes of crude oil and refined products ramped up by 13% and 53% respectively.”
During the 12 months ended December 31, 2020, production was 44,550 boe/day, compared to 42,492 boe/day in 2019.
In 2020, production consisted of 15,912 bbls/day of crude oil, 1,757 boe/day of NGLs and 161,288 mcf/day (26,881 boe/day) of natural gas.
The increase in production was a result of increased natural gas production at OML 60-63 (22%) offset by 29 percent decrease in NGL production and 5% and 15% crude production decreases at OML 56 and OML 13 respectively.
Production decreases were a result of shut-ins for repairs, maintenance and sabotage incidences at the facilities.
During the 12 months to December 31, 2020, Oando spent $82.8 million on capital expenditures related to the development of oil and gas assets and exploration and evaluation activities, compared to $78.8 million in the twelve months to December 31, 2019.
Capital Expenditures in 2020 consisted of $80.0 million at OMLs 60 to 63 incurred on oil and gas properties, $1.5 million at OML 56 and $1.3 million capital expenditure recorded on other assets.
