Oando deepened upstream investment with a financing agreement of $ 375 million

Nigeria Oando’s native energy solutions company, with a primary and secondary list on the Nigerian and Johannesburg stock exchanges, today announced the success of a reserve -based loan facility (RBL2) which managed to become $ 375 million.

Re-financing, led by the African export-import bank (Afreximbank) with the support of Mercuria, expanded the final maturity date of the facility until 30 January 2029.

In recent years, a reserve -based loan (RBLS) has become a popular form of financing for the purchase, development and operation of oil and gas assets.

Under this model, the number of borrowers that can be accessed – in this case, Oando – directly correlates with the number and value of their proven reserves, with the position of Oando at 1.0 BNBOE, also known as a loan base.

This increase is a consequence of the company’s progress in Deleveraging, which has reduced the original facility of $ 525 million RBL2, which was signed in 2019, to $ 100 million at the end of 2024. This debt management cleans the road for successful re -financing.

It is estimated that the funding package, obtained through a group of domestic and foreign lenders, will pay for field development, drilling programs, and improvement of infrastructure in important oil and gas assets operated by Oando.

This investment coincides with Nigeria’s efforts to increase crude oil production and encourage greater private sector participation in upstream operations in dealing with obstacles from the global energy revolution.

According to CEO Oando, Wale Tinubu, the agreement is an “important milestone” that will increase the company’s ability to provide value to shareholders and make a major contribution to the development of Nigeria’s economy and energy security.

He says; “We are happy to have completed the improvement of our RBL2 facilities, our joint venture has extensive reserves with the potential to produce more than $ 11 billion in net cash flows for Oando during the life of the asset.

” This working capital facility is an important enabler for extracting and monetizing these resources efficiently. We appreciate the advanced partnership of Afreximbank and Mercuria, whose support is unprooved underlines their harmony with our long -term focus on maximizing production, optimizing asset performance, and providing continuous value to all stakeholders. “

Also Read: Oando Targets 100,000BPD Production with NaOC Acquisitions

With the help of new cash infusion, the company will pursue important growth goals, such as accelerated drilling campaigns, the application of improvement of operational efficiency in all of its portfolios, and improving important infrastructure in all operations.

Oando PLC financing arrangements worth $ 375 million have a number of short -term and long -term market effects, especially in the larger and larger and larger African capital and capital markets.

Capital infusion will increase investor confidence, especially in the upstream Nigerian sector, because it shows that the country’s upstream oil and gas industry, which had been underestimated in previous years, had gained confidence.

The fact that Oando is able to collect so much money, perhaps in dealing with challenging international financing conditions, can convince domestic and international investors about the feasibility of funding Nigerian energy assets.

In addition, this will increase the value and activity of Oando’s stock trading because the company’s shares can move positively at Johannesburg Stock Exchange (JSE) and Nigerian Exchange (NGX), especially if the market views financing as a value-accrate.

Oando financing agreement worth $ 375 million may have an indirect but significant effect on the Nigerian Eurobond Market, especially in terms of credit risk and investor sentiment. This is because the successful fundraising, which is most likely originated from a combination of foreign and local lenders, shows that the international credit market is still willing to provide nigerian company risk prices despite macroeconomic problems such as inflation, fiscal pressure, and volatility of foreign exchange volatility.

Because oil is still a Nigerian main breadwinner, Oando’s investment is likely to increase oil production, which supports Nigerian fiscal revenue and external reserves. Investors can view this as a sign of the feasibility of a sovereign state credit, which can result in a narrower spread to the nigerian sovereign eurobond or at least stabilize it.