Toronto-listed Oando Energy Resources (OER), the upstream business of Oando Plc, said it had secured funding for the closure of the acquisition of the Nigerian upstream oil and gas business of United States-based group ConocoPhillips.

The company, which is focused on oil and gas exploration in Nigeria, currently estimates that the net purchase price payable to complete the ConocoPhillips acquisition will be about $1.05 billion (after deducting payment of the $450 million deposit previously paid, an additional $50 million to be paid and giving effect to expected adjustments as of the outside date).

OER expects to fund payment of the net purchase price using funds from the corporate facility and reserve-based loan agreement with third party lenders, proceeds from the proposed private placement of units of the company, subject to approval by the Toronto Stock Exchange, and a convertible loan from Oando Plc, the 94.6 percent shareholder of the company.

Pursuant to an amendment agreement executed with ConocoPhillips, OER and ConocoPhillips agreed to extend the outside date for completion of the ConocoPhillips acquisition from January 31, 2014 to February 28, 2014, according to a statement from the company.

As part of this agreement, OER will pay an additional $50 million towards the acquisition for a total deposit of $500 million.

The company said closing of the ConocoPhillips acquisition remains subject to satisfaction of closing conditions, including the anticipated consent of the minister of petroleum resources in Nigeria.

Once concluded, the ConocoPhillips transaction will substantially boost the operations of OER with about production of 50,000boepd post acquisition, generating extensive growth in revenue and profitability.

Additionally, the acquisition will immediately position OER as one of the largest indigenous oil producers in Nigeria, as the company will also grow its 2P reserves and 2C resources by 221MMboe and 492MMboe respectively.

The acquisition comprises the indirect acquisition of all of the shares of Phillips Oil Company Nigeria Limited, Phillips Deepwater Exploration Nigeria Limited and Conoco Exploration and Production Nigeria Limited.

Source: Businessdayonline