₦airaland Forum

Trojan8:
Not feasible

That means if they must do 100,000 barrels even next yr.It will require acquiring more wells.

ositadima1:
So?

This is FY'23 guidance from Oando. How you expect these production numbers to do 5x because of a 20% increment of current working interests in OML 60,61, 62, and 63 is beyond me. Meanwhile, they currently own 6 OMLs that contributed to those numbers and only did a 20% upside in the four OMLs mentioned above.

Anyways, ThisDay mentioned it so it is right

https://www.oandoplc.com/press_release/oando-plc-announces-unaudited-fye-2023-results/

emmaodet:
Please can I buy it directly like any other stock on the ngx platform through my broker? Ucap or investment-one
I think I like them

Yes.
It's listed in the EQUITY section of NGX
It's directly below NGXGROUP
With the ticker/symbol "NIDF"

3rd quarter distribution:

https://doclib.ngxgroup.com/Financial_NewsDocs/NIDF_-_Q3_2024_Distribution_Announcement.pdf

KarlTom:
I see ARADEL doing ₦2000 easily.
Likewise, I believe that SEPLAT will do a share split by/before Q1 2025.
OandO will do many things largely dependent on the results...

How na? Aradel at 800 is already priced above Seplat in terms of mcap with less assets and other fundamentals. Going to #2,000 basically means an 8-9tn naira valuation.

yMcy56:
Yes.
It's listed in the EQUITY section of NGX
It's directly below NGXGROUP
With the ticker/symbol "NIDF"

3rd quarter distribution:

https://doclib.ngxgroup.com/Financial_NewsDocs/NIDF_-_Q3_2024_Distribution_Announcement.pdf

Okay.
Thanks very much.
Make I go rush buy am tomorrow

Sunrisepebble:
I did my own valuation and got around 9-10k without consideration of the SPDC deal. This was back on NASD. Cardinal Stone see it as N1,200 (5trn market cap) which I feel is not accurate, the premium is too high compared to Seplat which is producing almost 3 or 4 times more

Cardinal Stone were the issuing brokers of course so level of bias should be expected. I always left it was overvalued and market is already seeing that. Biggest value proposition for them is that they currently refine 30%+ of oil produced. In terms of hard numbers (production, revenue, and PAT), they are no where near the other big guys.

mikeapollo:
It is more like between Oando and SEPLAT. Currently, SEPLAT produces about 48,000 boepd while Oando produces about 40000 boepd excluding both Mobil/ENI acquisitions

Oando current production is 20000+. Including Eni is when it gets to 40000. Seplat is already over 40000 and acquiring Mobil should see it get to 60000+

Ideal entry price is ₦105-₦110. Anything above that is you paying extra...

I project that tomorrow's offers will be ₦115+

emmaodet:
Okay.
Thanks very much.
Make I go rush buy am tomorrow

KarlTom:
Ideal entry price is ₦105-₦110. Anything above that is you paying extra...

I project that tomorrow's offers will be ₦115+

I go dey buy small small with #100 as target. And expecting total dividend for 2025 to hit #20.You won't see stock appreciation here easily

KarlTom:
Ideal entry price is ₦105-₦110. Anything above that is you paying extra...

I project that tomorrow's offers will be ₦115+

Thanks very much.
I will do my DD

Trojan8:
Oando current production is 20000+. Including Eni is when it gets to 40000. Seplat is already over 40000 and acquiring Mobil should see it get to 60000+

Oga are you into this field. I want to understand why the minister is hoping for oando to do 100,000 in the future by revamping its production. Abi na another wale marketing.
This was whr my hope was hanging for wale to clear all this debt if they push to 100,000 by next yr

Streetinvestor2:
Oga are you into this field. I want to understand why the minister is hoping for oando to do 100,000 in the future by revamping its production. Abi na another wale marketing.
This was whr my hope was hanging for wale to clear all this debt if they push to 100,000 by next yr

Nope, I just do analysis of the sector. The minister would always say things that are optimistic which isn't always true. Should I bring various quotes of where he gave timelines that weren't true about Dangote refinery?

"Oando expects the acquisition to significantly enhance its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market. It also expects the transaction to drive local economic growth by creating jobs, improving infrastructure and fostering technological advancements in the oil and gas sector."

This is from Afrexim bank that basically financed the deal with a facility worth $650.0m.

Trojan8:
Nope, I just do analysis of the sector. The minister would always say things that are optimistic which isn't always true. Should I bring various quotes of where he gave timelines that weren't true about Dangote refinery?

"Oando expects the acquisition to significantly enhance its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market. It also expects the transaction to drive local economic growth by creating jobs, improving infrastructure and fostering technological advancements in the oil and gas sector."

This is from Afrexim bank that basically financed the deal with the a facility worth $650.0m.

ok thanks. That means 100,000 barrels is completely not possible from this two deal unless miracles happens with the wells.
Then at 50,000 if achieved can they make good money to pay off all this debt in reasonable yrs

I do hope he lists it o.
https://punchng.com/how-i-got-permit-for-2bn-nigerias-biggest-power-plant-davidos-father/

TOP 4 Economies in Africa and their effective power generating capacities:

1. South Africa ~40,000 Megawatts
2. Egypt ~ 40,000 Megawatts
3. Algeria ~ 50,000 Megawatts
4. Nigeria ~ 7,000 Megawatts.

PS: installed Generating capacity is upwards of 13,000 Megawatts .

The Power Infrastructure needs to be greatly invested in and existing infrastructure improved on...

KarlTom:
Who else saw this video?
Which power station could he be referring to here 🤔

https://www.instagram.com/p/DBLrA2BN0lY/?igsh=MW0zdjE4eTd3dXZqbA==

Streetinvestor2:
ok thanks. That means 100,000 barrels is completely not possible from this two deal unless miracles happens with the wells.
Then at 50,000 if achieved can they make good money to pay off all this debt in reasonable yrs

Yeah, those there are some oil fields that came with the acquisition but can't really project how much crude oil would be coming from those especially for some that are still at exploration stage.

As regards, repaying debt I believe it lies in how they are able to improve on margins. In the last 5 years, it was only in 2019 that Oando was able to generate gross profit margin of above double figures (12.6% to be exact) . What this means is that cost of goods sold takes at least 90% of revenue in each financial year, you haven't factored in other costs. Now when you move downwards to net profit margin, they had negative margins in three of the last five years and the highest positive margin was around 4.1% in FY'21 while the highest negative was ironically in FY'19 at -35.6%. If you compare this with Seplat for example, they've always maintained GP margin of around 40% with net profit margin around 11-20%.

So I believe if they are able to be cost effective in the short term, then they should be able to clear up those debts in the mid term.

Trojan8:
Nope, I just do analysis of the sector. The minister would always say things that are optimistic which isn't always true. Should I bring various quotes of where he gave timelines that weren't true about Dangote refinery?

"Oando expects the acquisition to significantly enhance its production capacity from the current 20,000 barrels of oil equivalent per day (kboe/day) to 60,000 kboe/day, effectively boosting Nigeria’s oil output and reinforcing the country’s position in the global energy market. It also expects the transaction to drive local economic growth by creating jobs, improving infrastructure and fostering technological advancements in the oil and gas sector."

This is from Afrexim bank that basically financed the deal with the a facility worth $650.0m.

Ok, from the same Afrimex website: "“The joint venture, with significant oil and gas assets, including oil mining licenses 60, 61, 62 and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining,” the bank said."

That 1.2 billion barrels is more than enough to pay off the cumulative loan of $950 million. In fact, even a small fraction is sufficient if we consider a conservative price of $60 per barrel, which would value the reserves at over $66 billion. PA Ema is looking for net asset value - is this real or just another hype by Afrimex?

ositadima1:
Ok, from the same Afrimex website: "“The joint venture, with significant oil and gas assets, including oil mining licenses 60, 61, 62 and 63, has produced 4.4 billion barrels of oil and 12 trillion cubic feet of natural gas to date, with 1.2 billion barrels of oil and 10.7 trillion cubic feet of natural gas remaining,” the bank said."

That 1.2 billion barrels is more than enough to pay off the cumulative loan of $950 million. In fact, even a small fraction is sufficient if we consider a conservative price of $60 per barrel, which would value the reserves at over $66 billion. PA Ema is looking for net asset value - is this real or just another hype by Afrimex?

I don't understand you. You brought revenue projections using 100k/bbl which was what I was refuting. How does it rate to 2p reserves? This guy.

Meanwhile, there are reserves for a reason. Not sure where I mentioned anything about Oando but being able to repay their loans if it involves selling off assets. Plus before the acquisition Oando already had over 505.0 barrels of oil in reserves. If I take your "analysis" serious, one would be tempted to say that they should have sold of their reserves in order to facilitate the acquisition but real life doesn't work like that. Again, I am not sure how countering your revenue projections has any bearings on the Company's valuation in itself or their ability to repay their debts.

You would be fine.

Trojan8:
I don't understand you. You brought revenue projections using 100k/bbl which was what I was refuting. How does it rate to 2p reserves? This guy.

Meanwhile, there are reserves for a reason. Not sure where I mentioned anything about Oando but being able to repay their loans if it involves selling off assets. Plus before the acquisition Oando already had over 505.0 barrels of oil in reserves. If I take your "analysis" serious, one would be tempted to say that they should have sold of their reserves in order to facilitate the acquisition but real life doesn't work like that. Again, I am not sure how countering your revenue projections has any bearings on the Company's valuation in itself or their ability to repay their debts.

You would be fine.

You dey find my wahala. You dug out an old post, then you said the production would be 40,000 barrels. I reworked my spreadsheet with that data, but you shrugged it off as ThisDay propaganda.

I then pointed out that they have 1.2 billion barrels in the ground according to the same source you are quoting. So, now it's a mining problem to get to that 100,000 barrels, isn't it? It's either about increasing the rate of mining or the number of wells. It seems like you only want your opinion to be heard.

So what's the point of quoting my post? You don't even know why it was made in the first place.

You're the one who will be fine in the end.

All this double monikers, u don use another one come. Lol

ositadima1:
You dey find my wahala. You dug out an old post, then you said the production would be 40,000 barrels. I reworked my spreadsheet with that data, but you shrugged it off as ThisDay propaganda.

I then pointed out that they have 1.2 billion barrels in the ground according to the same source you are quoting. So, now it's a mining problem to get to that 100,000 barrels, isn't it? It's either about increasing the rate of mining or the number of wells. It seems like you only want your opinion to be heard.

So what's the point of quoting my post? You don't even know why it was made in the first place.

You're the one who will be fine in the end.

Alright.

Trojan8:
Alright.

Yeah

Trojan8:
Yeah, those there are some oil fields that came with the acquisition but can't really project how much crude oil would be coming from those especially for some that are still at exploration stage.

As regards, repaying debt I believe it lies in how they are able to improve on margins. In the last 5 years, it was only in 2019 that Oando was able to generate gross profit margin of above double figures (12.6% to be exact) . What this means is that cost of goods sold takes at least 90% of revenue in each financial year, you haven't factored in other costs. Now when you move downwards to net profit margin, they had negative margins in three of the last five years and the highest positive margin was around 4.1% in FY'21 while the highest negative was ironically in FY'19 at -35.6%. If you compare this with Seplat for example, they've always maintained GP margin of around 40% with net profit margin around 11-20%.

So I believe if they are able to be cost effective in the short term, then they should be able to clear up those debts in the mid term.

Since Oando has all of these challenges, why has the stock been rising sporadically since last year?

bastardson:
Since Oando has all of these challenges, why has the stock been rising sporadically since last year?

The stock witnessed the bull run of 2023 and didn't move an inch largely because of the court case that it was engaging with minorities shareholders. And to be fair it's largely undervalued. So when the court case was final resolved, we saw a year plus of market expectations priced into a few weeks.

Trojan8:
Yeah, those there are some oil fields that came with the acquisition but can't really project how much crude oil would be coming from those especially for some that are still at exploration stage.

As regards, repaying debt I believe it lies in how they are able to improve on margins. In the last 5 years, it was only in 2019 that Oando was able to generate gross profit margin of above double figures (12.6% to be exact) . What this means is that cost of goods sold takes at least 90% of revenue in each financial year, you haven't factored in other costs. Now when you move downwards to net profit margin, they had negative margins in three of the last five years and the highest positive margin was around 4.1% in FY'21 while the highest negative was ironically in FY'19 at -35.6%. If you compare this with Seplat for example, they've always maintained GP margin of around 40% with net profit margin around 11-20%.

So I believe if they are able to be cost effective in the short term, then they should be able to clear up those debts in the mid term.

What you said is generally true but you should also remember that Oando was more of a downstream company in prior 3-5 years and margins are usually very low in the downstream sector. It may not be perfect to compare them with SEPLAT in those years because Seplat has always been an upstream player. But Oando still has to do a lot more to improve on their margins as you said.

100 as target?

Streetinvestor2:
I go dey buy small small with #100 as target. And expecting total dividend for 2025 to hit #20.You won't see stock appreciation here easily

mikeapollo:
What you said is generally true but you should also remember that Oando was more of a downstream company in prior 3-5 years and margins are usually very low in the downstream sector. It may not be perfect to compare them with SEPLAT in those years because Seplat has always been an upstream player. But Oando still has to do a lot more to improve on their margins as you said.

My own na make Wale no carry shareholders handicap

Trojan8:
Oando average production is around the 25k/bbl. mark. Factor in a very bullish estimate, that 100k is not possible. Even the 20% upside From 4 OMLs won't even push peak average production beyond 52k. Post integration of this acquisition, Oando should average around 40-45k/bbl.

I think we are confusing the production measurement metrics of Barrels (bbl) and Barrels of Oil Equivalent (boe).
The bbl is used for the crude oil component only.
The boe combines (or factors in) the crude oil component plus other Gases, NGLs, LNG etc.
Hence the boe figure is usually higher than the bbl figure.

According to their executive in the recent Arise TV interview, Oando currently produces between 25,000-30,000 barrels per day(bbl/day) of crude oil.
On Oando's website, it indicates an average of about 40,100 barrels of oil equivalent per day (boe/day).

Trojan8:
Oando current production is 20000+. Including Eni is when it gets to 40000. Seplat is already over 40000 and acquiring Mobil should see it get to 60000+

Please check your figures again.
Seplat is doing about 49000 boe/day (about 30,000 bbl/day) .... refer to their HY2024 financial statement ).
Oando has been doing 40,100 boepd (about 25k bbl/day) since early this year.... (refer to Oando's official website)

megawealth01:
My own na make Wale no carry shareholders handicap

The key is to sell Oando at a right time and make huge profits and still keep some reasonable remnant units there in case of potential future benefits e.g. bonus, price gain etc.

Trojan8:
The stock witnessed the bull run of 2023 and didn't move an inch largely because of the court case that it was engaging with minorities shareholders. And to be fair it's largely undervalued. So when the court case was final resolved, we saw a year plus of market expectations priced into a few weeks.

Wow, so you believe it’s undervalued at its current price, despite the number of outstanding shares?

Although I am positive it’s gonna keep growing for the next 8yrs.

mikeapollo:
The key is to sell Oando at a right time and make huge profits and still keep some reasonable remnant units there in case of potential future benefits e.g. bonus, price gain etc.

I have decided to invest in both Aradel and Oando.

As the argument don too much.

Is it wise investing in Oando at its current price. There’s been crazy movements in d last few years.

We all agreed that between 590-630 is a good price to enter ARADEL.

Even though 500 would have been better