Oando Energy Resources Incorporated, a wholly-owned subsidiary of Oando Plc focused on oil and gas exploration and production in Nigeria, says it has significantly increased its oil reserves as a result of technical revisions and the acquisition of the Nigerian upstream oil and gas business of ConocoPhillips.
OER had on July 2014 completed the acquisition of the assets of United States-based ConocoPhillips for a total cash consideration of $1.5bn.
The company, in its announcement of its 2014 year-end summary reserves and resources for its assets in Nigeria, said its proved net reserves increased by 78 per cent to 288.5 million barrels of oil equivalent, while proved and probable net reserves increased by 82 per cent to 420.3 mmboe.
The increase, OER said, was largely due to recognising the precedence of the licence renewal under the Nigerian Petroleum Act, which is the basis of the extension of the reserves beyond the current license limit.
It said the economic value (net present value 10 per cent of future net revenue) of the proved and probable reserves had increased by $545m (+44 per cent) to $1.785bn, largely due to the COP acquisition.
The company said the annual independent reserves and resources evaluation was undertaken by DeGolyer and MacNaughton, a worldwide petroleum consulting group.
According to OER, best estimate (working interest) contingent resources correspondingly decreased by 78 per cent from 547 mmboe to 122 mmboe as a result of the conversion of approximately 190 mmboe of 2C resources to 2P reserves due to the rebased evaluation utilising the economic life of the producing fields.
It said the net negative revisions of 246 mmboe occurred due to the current crude oil price environment, which has deemed certain contingent developments uneconomic; and lastly, the change in the interpretation of reservoirs by the independent evaluator.
The Chief Executive Officer, Oando Energy Resources, Mr. Pade Durotoye, said, “We are very pleased with the new 2014 reserves numbers that confirms our thesis at the time we embarked on our transformative COP acquisition.