Oando Plc, a leading Nigerian energy company, announced impressive financial results for the fiscal year 2024, marked by significant revenue growth and a steady increase in profitability. The company’s unaudited financial statements revealed a 45% surge in revenue, reaching N4.1 trillion compared to N2.9 trillion in 2023. This substantial increase was primarily attributed to higher crude oil volumes, escalating gas prices, and favorable foreign exchange gains. These positive factors offset the impact of lower trading volumes and a dip in realized crude oil prices. The company’s profit after tax also experienced healthy growth, rising by 9% to N65.5 billion from N60.3 billion in the previous year. This robust financial performance underscores Oando’s resilience and adaptability in a dynamic energy market.
A key driver of Oando’s success in 2024 was the strategic acquisition of an additional 20% stake in NAOC Limited, a move that significantly bolstered the company’s production capacity. This acquisition, according to Group Chief Executive Wale Tinubu, enabled Oando to achieve peak operated production of 103,206 barrels of oil equivalent per day (boepd) and net entitlements of 45,000 boepd. This enhanced production capacity translated into a remarkable 46% increase in exit production, reaching 30,712 boepd compared to 21,036 boepd in 2023. Average production also witnessed a steady 3% growth, rising to 23,911 boepd from 23,258 boepd in the previous year. These figures highlight the transformative impact of the NAOC acquisition on Oando’s operational capabilities and its contribution to the overall positive financial performance.
A closer examination of Oando’s production data reveals a nuanced picture of its operational performance. While crude oil output experienced a robust 27% increase, reaching 7,864 barrels per day from 6,211 bpd in 2023, natural gas production saw a slight decline of 6%, dropping to 15,801 boepd from 16,808 boepd. This contrasting performance reflects the company’s strategic focus on maximizing crude oil production in the prevailing market conditions, even as natural gas production faced certain headwinds. Despite the impressive revenue growth, the company’s operating profit saw a modest 1% increase to N220.2 billion. This marginal growth was attributed to several factors, including increased administrative expenses, foreign exchange losses stemming from the revaluation of payables and borrowings, and costs associated with the NAOC acquisition. These factors underscore the complex interplay of various operational and financial elements that influence a company’s overall profitability.
Oando’s trading division experienced a challenging year, with a noticeable decline in traded volumes. Crude oil sales plummeted by 37% to 20.7 million barrels, while refined product sales witnessed a steeper decline of 64%, falling to 599,692 metric tonnes. This downturn in trading activity underscores the volatility of the global energy market and the challenges faced by companies operating in this sector. Despite these challenges, Oando remains committed to its long-term growth strategy, focusing on optimizing costs, enhancing operational efficiency, and implementing an aggressive drilling program across three rig lines to further boost production in 2025. This forward-looking approach demonstrates Oando’s commitment to navigating market fluctuations and capitalizing on future opportunities.
As part of its commitment to operational integrity and security, Oando is implementing a revamped security framework. This framework incorporates advanced surveillance technology and intelligence-driven initiatives aimed at curbing oil theft and ensuring the safety and efficiency of its operations. This proactive approach to security reflects Oando’s recognition of the critical role of safety and security in maintaining sustainable operations and protecting its valuable assets. The company’s capital expenditures related to oil and gas development and exploration activities amounted to $18.1 million in 2024, compared to $52.3 million in 2023. This decrease in capital expenditure suggests a strategic shift in focus towards optimizing existing operations and integrating the newly acquired NAOC assets, rather than undertaking large-scale new exploration projects.
Looking forward, Oando is poised for continued growth and success in the Nigerian energy sector. The company’s strategic focus on cost optimization, operational efficiency, and enhanced security measures, coupled with its aggressive drilling program, positions it well to capitalize on future market opportunities and deliver strong performance in the years to come. The substantial increase in crude oil production output in a short span of three months, as reported by The PUNCH, further reinforces the company’s positive trajectory and its commitment to maximizing production capacity. This commitment to growth, combined with a proactive approach to addressing challenges and adapting to market dynamics, solidifies Oando’s position as a key player in the Nigerian energy landscape.
