Oando Plc, one of Nigeria’s leading indigenous energy solutions companies has announced the successful upsizing of its Reserve Based Lending (RBL2) facility to $375 million.
The facility refinancing secured by Oando, was led by the African Export-Import Bank (Afreximbank) with the support of Mercuria, extends the final maturity date of the facility to January 30, 2029.
A reserve-based lending facility is a type of loan commonly used in the oil and gas industry, where the amount a company can borrow is determined primarily by the value of its proven oil and gas reserves.In recent years, financing arrangements for the acquisition, development, and operation of oil and gas assets have commonly been structured as RBLs.
According to statement by the company, it explained that under this model, the amount a borrower, in this instance Oando, could access was directly tied to the size and value of their proven reserves, with Oando’s standing at 1.0Bnboe —referred to as the Borrowing Base.
This upsizing was a result of the company’s significant progress in deleveraging, having substantially reduced the original $525 million RBL2 facility, signed in 2019, down to $100 million by the close of 2024.
This proactive debt management has paved the way for successful refinancing.Speaking on this strategic achievement, Group Chief Executive, Oando, Mr. Wale Tinubu was quoted to have said: “We are pleased to have completed the upsizing of our RBL2 facility, a strategic milestone that reinforces our commitment as Operator of the Oando-NEPL JV to maximising the value of our expanded asset portfolio.
“Our Joint Venture holds extensive reserves with the potential to generate over $11 billion in net cashflows to Oando over the assets’ life. This working capital facility is a critical enabler towards efficiently extracting and monetising these resources.
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“We appreciate the continued partnership of Afreximbank and Mercuria, whose unwavering support underscores their alignment with our long- term focus on maximising production, optimising asset performance, and delivering sustainable value to all stakeholders.”
It stated that the newly secured capital injection would be strategically deployed to aggressively pursue key growth initiatives, including accelerated drilling campaigns, critical infrastructure upgrades across its operations, and the implementation of advanced operational efficiencies throughout its portfolio.
He not that the strategic investments directly support the company’s stated ambition to significantly increase its production levels to 100,000 barrels of oil per day (bopd) and 1.5 billion cubic feet (Bcf) of gas per day by the end of 2029.
“This positive development followed Oando’s landmark $783 million acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant, ENI, in August 2024. This transformative acquisition significantly expanded Oando’s operational landscape, incorporating twenty-four currently producing fields, approximately forty identified exploration prospects and leads, twelve key production stations, an extensive network of approximately 1,490 km of pipelines, three vital gas processing plants, the strategic Brass River Oil Terminal, the significant Kwale-Okpai phases 1 & 2 power plants boasting a total nameplate capacity of 960MW, and a comprehensive suite of associated infrastructure”
“This successful refinancing underscores the confidence of leading financial institutions in Oando’s strategic direction and its ability to capitalise on its expanded asset base to drive growth and value creation in the Nigerian energy sector and beyond.
