Despite the growing poverty in Nigeria Oando Plc has emerged as a star player on the Nigerian Exchange Limited (NGX), with its share price skyrocketing by an astonishing 1,286% within a year. As of September 2, 2024, Oando’s share price reached N84.55, a monumental leap from just N6.10 on September 4, 2023. This surge propelled the company to achieve a historic milestone—a market capitalization surpassing N1 trillion for the first time ever.
Oando’s remarkable ascent has been fueled by its strategic acquisition of the Nigerian Agip Oil Company (NAOC), a deal that has dramatically reshaped the landscape of Nigeria’s oil and gas sector. The acquisition, announced on August 22, 2024, has positioned Oando as the largest indigenous oil and gas company in Nigeria, with proven reserves now standing at approximately 1 billion barrels of oil equivalent.
Ekene Oyeka, a Securities Dealer with Norrenberger Securities, remarked on Oando’s bullish run: “The acquisition of Agip has significantly impacted Oando’s share price. Since the announcement, we’ve seen a strong buy sentiment, with very few sellers willing to part with their Oando shares.”
The year 2024 has been a record-breaking period for Oando, making it the second fastest-gaining stock on the NGX with a year-to-date (YtD) appreciation of 705%. After starting the year at N10.50 with a market cap of N130.2 billion, Oando’s meteoric rise in the second half of the year—spurred by its financial statements for 2022 and 2023—has seen its stock soar by an additional 464%.
Adebayo Adebanjo, Senior Analyst at CardinalStone Securities, highlighted the significance of Oando’s new standing: “Oando is now poised to outpace even Seplat Energy in terms of oil and gas reserves, as well as power generation capacity. This acquisition solidifies Oando’s dominant position in the industry.”
With its N1.048 trillion market capitalization, Oando has joined an elite group of companies on the NGX and is now the 10th most valuable firm listed, just behind Zenith Bank Plc. The acquisition also brings under Oando’s control two power plants—Kwale-Okpai I & II—with a combined capacity of 960 MW, as well as 1,490 km of pipelines.
However, it’s not all smooth sailing for Oando. Analysts have pointed out ongoing challenges with the company’s financial health, including a negative equity of N236.3 billion and substantial borrowings amounting to N821.4 billion as of FY 2023. Moreover, the company has yet to release its audited financial statements since 2022, raising questions among investors.
Despite these concerns, the fundamentals of Oando’s acquisition strategy remain robust, positioning the company for continued growth and dominance in Nigeria’s energy sector.
