Oando Plc announces sale of East Horizon Gas Company Ltd
Oando PLC, Nigeria’s leading indigenous energy group, has announced over the festive season that it is selling its wholly owned subsidiary, East Horizon Gas Company Limited (EHGC) to Seven Energy International Limited in a US$25 million deal.
The group, which is listed on both the Nigerian and Johannesburg Stock Exchange, has revealed the execution of a Share Purchase Agreement with Seven Energy for a total gross consideration of US$25 million adjusted for net liabilities.
EHGC is a special purpose vehicle operating a 128km, 120mmscf, 18-inch natural gas transmission and distribution pipeline (‘the Pipeline’) traversing the AkwaIbom and Cross River States.
EHGC also has a gas sales agreement to supplyup to 25MMcfpd, increasing to 50MMcfpd in 2016, under a 20 year “take-or-pay” agreement expiring in 2032.
Wale Tinubu, Group Chief Executive, Oando PLC, said: “This transaction aligns with our Corporate Strategy, as we leverage on the proceeds of the sale to boost overall Group liquidity in furtherance of our main growth initiatives in the Upstream.
“We are particularly delighted that a worthy advocate and champion of the Gas revolution is purchasing the company as they will be able to utilise the abundant gas resources they have to generate synergies and economies of scale through this extensive channel for all stakeholders.
“We remain steadfast in our commitment to growing the midstream business, evidenced by our ongoing expansion efforts on our various assets: the construction of the fourth phase of our Greater Lagos pipeline to increase our capacity and customer base in Lagos, the refurbishment of our newly acquired Port Harcourt pipeline franchise; growth in our Compressed Natural Gas distribution programme, which we commissioned this year; increase in our power generation to 23.55MW, with the addition of our second power plant the 10.4MWAlausa IPP.
“We also have projects which are at conceptualisation stages expected to create value for us in the longer term; the 400km SW-NW EIIJ pipeline and the Central Processing Facility that will serve as a gas gathering and processing hub in the Niger Delta.
“We continue to prioritise our aspirations to develop infrastructure in the midstream space with optimal energy solutions that will unlock and harness the available vast resource potential in our country, thereby reducing the perennial power challenges currently plaguing our nation.”