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OANDO PLC - 9M 2026 Unaudited Results Release

Oando PLC
Full analysis

What this filing means

Oando's operating engine is clearly working, but the bottom line is still paying for the acquisition. Nine-month production rose 14% to 42,985 boepd within guidance, unit opex fell 22% to $15.39/boe, and the group swung from a N109.7 billion operating loss to a N159.7 billion operating profit. Yet profit after tax fell 47% to N106.5 billion as N244.2 billion of finance costs on acquisition debt absorbed the gains. The read is a two-tier result: a genuinely stronger upstream business against a balance sheet that is still deleveraging.

Oando is producing more oil and gas, spending less to do it, and has turned its operations from a loss into a solid profit. But the company borrowed heavily to buy assets, and the interest on that debt is eating up a large share of the cash the business now makes. So the underlying business is healthier, while the reported profit is still being held back by the cost of the acquisition.

Bull case

  • Average production rose 14% year-on-year to 42,985 boepd, remained within guidance and was driven by new wells and higher uptime.
  • Production operating costs fell 22% to $15.39/boe from $19.67/boe as cost optimisation delivered savings across the enlarged asset base.
  • Revenue increased 9% to N2,776.1 billion, led by E&P growth from higher crude oil liftings, gas and NGL sales, and improved realised prices.
  • Operating profit reached N159.7 billion versus a N109.7 billion operating loss in 9M 2025, supported by higher production and the absence of a prior-period fair value loss.
  • Adjusted EBITDA improved to N181.8 billion from negative N194.1 billion, driven by higher E&P sales volumes and realised prices.

Bear case

  • Profit after tax fell 47% to N106.5 billion as the swing from net finance income to net finance costs more than offset the operating improvement.
  • Interest paid was N143.9 billion, equivalent to 50% of cash generated from operations, leaving debt service a substantial call on operating cash.
  • The balance-sheet transformation plan still aims to eliminate a retained earnings deficit and strengthen covenant headroom, with completion targeted by end-Q1 2027.
  • OML 13 Qua Ibo production fell 29% to 384 bopd, primarily because of natural field decline.
  • The traded-volume guidance revision removed previously expected volumes after NNPC implemented a new crude-backed financing structure.

AI-generated summary by SENS-AI, based on the original JSE SENS filing.

SENS-AI conclusion

A genuinely improved operating result that confirms the trajectory the market was already told to expect. Nine-month production averaged 42,985 boepd, which the filing describes as within guidance, but a nine-month average cannot establish whether the full-year 40,000–45,000 boepd range will be met or missed — that comparison remains unresolved. The profit-after-tax decline is a financing story, not an operating one, and the pending equity raise is the next lever on that burden. So what: the operating recovery is real, but the market still needs the equity raise and continued deleveraging to convert it into earnings growth.

The Q4 2026 equity raise and the end-Q1 2027 balance-sheet transformation completion are where the market will test whether finance costs finally ease.

Evidence from the filing

  • Average production rose 14% year-on-year to 42,985 boepd, remained within guidance and was driven by new wells and higher uptime.

    “Average production of 42,985 boepd, up 14% year-on-year and within guidance, driven by new wells and higher uptime.”

  • Production operating costs fell 22% to $15.39/boe from $19.67/boe as cost optimisation delivered savings across the enlarged asset base.

    “Production Opex down 22% to $15.39/boe (9M 2025: $19.67/boe), driven by sustained delivery of the Group’s cost optimisation initiatives across the enlarged asset base”

  • Revenue increased 9% to N2,776.1 billion, led by E&P growth from higher crude oil liftings, gas and NGL sales, and improved realised prices.

    “Revenue up 9% to N2,776.1 billion (9M 2025: N2,541.5 billion), led by E&P growth on higher crude oil liftings and gas and NGL sales, alongside improved average realised prices”

  • Operating profit reached N159.7 billion versus a N109.7 billion operating loss in 9M 2025, supported by higher production and the absence of a prior-period fair value loss.

    “Operating profit of N159.7 billion (9M 2025: operating loss of N109.7 billion), on higher production and the absence of a prior-period fair value loss”

  • Adjusted EBITDA improved to N181.8 billion from negative N194.1 billion, driven by higher E&P sales volumes and realised prices.

    “Adjusted EBITDA of N181.8 billion (9M 2025: negative N194.1 billion), driven by higher E&P sales volumes and realised prices”

  • Profit after tax fell 47% to N106.5 billion as the swing from net finance income to net finance costs more than offset the operating improvement.

    “Profit after tax fell 47% to N106.5 billion in 9M 2026 (9M 2025: N201.3 billion), as the swing from net finance income to net finance costs more than offset the improvement in operating profit.”

  • Interest paid was N143.9 billion, equivalent to 50% of cash generated from operations, leaving debt service a substantial call on operating cash.

    “With borrowings still elevated after the acquisition, debt service absorbs a substantial share of the cash the business generates: interest paid during the period was N143.9 billion, equivalent to 50% of cash generated from operations.”

  • The balance-sheet transformation plan still aims to eliminate a retained earnings deficit and strengthen covenant headroom, with completion targeted by end-Q1 2027.

    “Management continues to execute the Group’s balance sheet transformation plan, which aims to eliminate the retained earnings deficit, strengthen covenant headroom and extend debt maturities, with completion targeted by end-Q1 2027.”

  • OML 13 Qua Ibo production fell 29% to 384 bopd, primarily because of natural field decline.

    “Production averaged 384 bopd in 9M 2026, down 29% from 541 bopd in 9M 2025, primarily due to natural field decline.”

  • The traded-volume guidance revision removed previously expected volumes after NNPC implemented a new crude-backed financing structure.

    “The revision removes volumes previously expected under that programme after NNPC implemented its new crude-backed financing structure; it does not reflect any change in the Group’s underlying trading capability or commercial strategy.”
Category
Results
Event posture
No Edge
Published
Oct 30, 2026

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