Oando Plc has cut borrowings to N2.16 trillion, down 22% from the end-2024 peak, as stronger operating cash flow and higher oil and gas output give the Nigerian producer more room to fund drilling and reduce leverage.
Oando cuts debt as cash flow and output rise
The Lagos- and Johannesburg-listed company said cash generated from operations reached N285 billion in the nine months through September, while capital spending totaled N110.7 billion, mostly on drilling across oil mining leases 60 to 63. The improved cash generation matters because Oando is trying to finance growth from internal funds rather than rely entirely on fresh debt in a market where borrowing costs remain high.
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The turnaround is sharp. Oando posted operating profit of N159.7 billion, versus an operating loss of N109.7 billion a year earlier, as revenue climbed 9% to N2.78 trillion and gross profit jumped to N174.5 billion from N29.8 billion. Higher crude liftings, stronger gas and natural gas liquids sales and better realized prices drove the gains.
Production and volumes also improved. Output averaged 42,985 barrels of oil equivalent a day, up 14%, while crude liftings rose 43% to 3.97 million barrels and NGL sales almost doubled. Oando said production operating costs fell 22% to $15.39 a barrel, helped by lower transport, logistics and service costs, while facility uptime improved to 96.1% from 85%.
Chief Executive Wale Tinubu said the company’s renewed investment drive is delivering “greater efficiency, improved reliability, lower unit costs and ultimately higher production.” He also said Oando recorded no fatalities or lost-time injuries across about 14.9 million hours worked, an operational detail that supports continuity in a capital-intensive business.
The debt reduction is important for investors because Oando still carries a heavy leverage load relative to operating profit, and management is signaling that an equity raise is part of the solution. Tinubu said the company plans to strengthen shareholders’ funds, though he gave no size or timetable for the offering.
Oando’s seven-well 2026 drilling campaign is still under way, with two wells already on stream, workovers completed at two others and the final well due to spud in December. The program is expected to add 16,000 to 20,000 boepd of gross production, helping offset natural decline and supporting a medium-term target of about 100,000 boepd within four to five years.
For the full year, the company narrowed production guidance to 40,000 to 45,000 boepd and kept capital spending plans at $90 million to $100 million, focused on short-cycle upstream projects. Beyond oil and gas, Oando’s electric bus partnership in Lagos has topped 212,000 passenger journeys, with more buses due in service in the fourth quarter.
| Entity | Gains | Losses |
|---|---|---|
| Oando | ▲Lower leverage, stronger cash flow | ▼Still-high debt burden |
| Shareholders | ▲Growth funding potential | ▼Dilution risk from equity raise |
| Creditors | ▲Better repayment profile | ▼Less borrowing upside |
| Nigerian output growth | ▲Higher drilling activity | ▼Continued execution risk |
