Toronto-listed Oando Energy Resources Inc. (OER), a company focused on oil and gas exploration and production in Nigeria, has announced the completion of the acquisition of Medal Oil Company Limited.
The purchase price of $5 million was satisfied by the issuance of 3,491,082 units, each unit consisting of one common share of the company and one-half of one warrant to purchase an additional common share at a price of C$ 2.00 per common share for a period of 24 months from the date on which the company closes the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips, according to a statement published on OER’s website.
Medal Oil holds a 5 percent interest in OML 131. Upon completion of the ConocoPhillips’ acquisition, OER will own a 100 percent interest in OML 131.
OER, the upstream business of Oando plc, had late last month announced that the company and United States oil major ConocoPhillips had entered into an agreement to extend the outside date for completion of the proposed acquisition of the Nigerian upstream oil and gas business of ConocoPhillips to July 31, 2014.
The parties extended the outside closing date for completion of the ConocoPhillips acquisition to enable them to finalise activities required to complete the transaction, having received the required consent of the minister of petroleum resources in Nigeria.
The acquisition of the ConocoPhillips’ Nigerian upstream oil and gas business is expected to position OER as one of the leading indigenous independent exploration and production (E&P) players in Nigeria, as measured by total reserves and production.
The acquisition, which is expected to boost OER’s oil production to about 50,000 barrels per day (bpd) from about 5,000 bpd, comprises the indirect acquisition of all of the shares of Phillips Oil Company Nigeria Limited, Phillips Deepwater Exploration Nigeria Limited and Conoco Exploration and Production Nigeria Limited.