Oando reduces production costs to $15.39 per barrel

Oando Plc says it reduced its production operating costs by 22 per cent to $15.39 per barrel of oil equivalent in the nine months ended September 2026, from $19.67 in the corresponding period of 2025, as its average daily production increased by 14 per cent to 42,985 barrels of oil equivalent per day.

The company disclosed this in its unaudited financial results for the nine months, attributing the reduction in operating costs to optimisation across transportation, logistics, services, and information and communications technology, alongside increased production across a largely fixed field cost base.

Oando also reported an improvement in facility uptime to 96.1 per cent from 85 per cent in the corresponding period of 2025, which it said strengthened the reliability of its production and evacuation infrastructure.

Commenting on the performance, the Group Chief Executive of Oando, Wale Tinubu, stated that the company’s investment drive and operational execution had improved efficiency, reliability and production across its upstream portfolio.

“Our performance in the first nine months of 2026 demonstrates how diligent execution under our operatorship, supported by our renewed investment drive, is delivering greater efficiency, improved reliability, lower unit costs and ultimately higher production across our expanded upstream portfolio. Production averaged 42,985 boepd, up 14 per cent year-on-year, while facility uptime improved to 96.1 per cent and production operating costs declined by 22 per cent to $15.39 per boe. These gains were achieved with zero fatalities and zero lost-time injuries across approximately 14.9 million hours worked,” Tinubu said.

A breakdown of the company’s production showed that crude oil output increased 12 per cent to 12,193 barrels per day, while gas production rose 13 per cent to 28,689 barrels of oil equivalent per day.

Natural gas liquids production recorded a 53 per cent increase to 2,103 barrels per day during the review period.

The higher production translated into increased sales volumes, with crude oil lifts rising 43 per cent to 3.97 million barrels, while natural gas sales grew five per cent to 34.01 billion standard cubic feet.

NGL sales also increased 90 per cent to 0.57 million barrels, bringing the company’s total exploration and production sales volumes to 10.21 million barrels of oil equivalent, a 21 per cent increase over the corresponding period of 2025.

The improved operational performance contributed to a nine per cent increase in revenue to N2.78tn, while gross profit rose sharply by 483 per cent to N174.5bn from N29.8bn in the same period of 2025.

Oando also recorded an operating profit of N159.7bn, reversing the operating loss of N109.7bn reported in the corresponding period of the previous year.

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The company said the operational improvements were supported by higher production, improved facility reliability and lower production costs.

On its financial position, total borrowings stood at N2.16tn, 22 per cent below the peak recorded at the end of 2024, while cash generated from operations reached N285bn.

The company said it invested N110.7bn in capital expenditure during the nine-month period, with the bulk of the spending directed towards drilling activities across its OMLs 60–63 assets.

Oando said its seven-well drilling programme for 2026 had progressed across its operated assets. The company completed drilling at Idu 6ST and Idu 15, bringing both wells on stream, while workovers at Samabri 4T and Samabri 7T had also been completed.

Drilling was ongoing at Idu T and Samabri A50, while the final well in the programme, Ogbainbiri, was scheduled to spud in December 2026.

The company expects the completion of the drilling campaign to add between 16,000 and 20,000 barrels of oil equivalent per day in gross production. It said the additional output would help sustain production, offset natural field decline across its operated portfolio and support its medium-term production target.

Oando is targeting production of approximately 100,000 barrels of oil equivalent per day within the next four to five years.

In its clean energy operations, the company’s electric mobility partnership with the Lagos Metropolitan Area Transport Authority recorded more than 212,000 passenger journeys in the first nine months of 2026, with average capacity utilisation of 73 per cent.

An additional 11 electric buses, representing the first batch of a planned 50, arrived in Lagos during the period, bringing the fleet to 13. The expanded fleet is expected to enter service in the fourth quarter, with LAMATA operating the buses on behalf of Lagos State.

Looking ahead, Oando narrowed its full-year production guidance to between 40,000 and 45,000 barrels of oil equivalent per day and projected capital expenditure of between $90m and $100m, to be focused on high-impact, short-cycle upstream activities.

Commenting on the company’s outlook, Tinubu said, “For the remainder of 2026, our priorities are to progress the seven-well development programme, sustain operational reliability and strengthen shareholders’ funds through our impending equity raise. These initiatives are intended to reduce leverage, enhance our capacity to fund growth and support future shareholder distributions. We have demonstrated what we can achieve across our strategic assets and are confident in the opportunities ahead. Our commitment remains to realise the full potential of our substantial resource base and deliver lasting value for our shareholders.”