Oando Share Price Rises By 1,286% In One Year, Market Cap Crosses N1trn

Oando Plc has made a climb on the Nigerian Exchange Limited (NGX), reflecting a 1,286 per cent gain in its share price from September 4, 2023, to September 2, 2024.

The stock closed at N84.55, up from N6.10 just a year earlier. This unprecedented surge has catapulted Oando Plc into the ranks of companies with market capitalisation exceeding N1 trillion, marking a historic milestone for the company.

Oando’s Rise To  N1 Trillion Market Capitalisation

Oando’s performance on the NGX in 2024 has been nothing short of stellar. By September 2, the company achieved a market capitalisation of N1.048 trillion, making it the 10th most valuable company listed on the Exchange.

This milestone was driven by a combination of factors, including the completion of its $783 million acquisition of Nigerian Agip Oil Company (Agip) and the release of its financial statements for 2022 and 2023.

Ekene Oyeka, a Securities Dealer with Norrenberger Securities, attributed the surge to the Agip acquisition. “The acquisition of Agip has significantly affected the share price of Oando.

“Since the announcement, we’ve seen strong buying activity, with few willing to sell their shares,” he noted. Oyeka added, “This move is expected to solidify Oando’s position in Nigeria’s oil and gas sector and boost their cash flow.”

Oando’s Performance In 2024: A Year Of Rapid Growth

Oando Plc has become the second fastest-gaining stock on the NGX in 2024, appreciating by 705 percent year-to-date (YtD). The year began with a share price of N10.50 and a market cap of N130.2 billion.

The second half of the year saw a remarkable 464 per cent increase in stock value, fuelled by investor confidence and strong financial performance.

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Adebayo Adebanjo, Senior Analyst at CardinalStone Securities, highlighted the significance of Oando’s growth. “In terms of 2P reserves, Oando is expected to surpass Seplat, even considering MPNU (Mobil).

Additionally, their power generation capacity is set to exceed that of Transcorp Power and Geregu,” Adebanjo stated.

Oando’s Acquisition of Agip: A Game Changer

The completion of the Agip acquisition has been a key driver of Oando’s recent success. The deal, announced on August 22, has led to a 94.4 per cent increase in the company’s stock price.

With this acquisition, Oando has become the largest indigenous player in Nigeria’s oil and gas sector, with total proven reserves of approximately 1 billion barrels of oil equivalent.

The acquisition also transfers ownership of two power plants, Kwale-Okpai I & II, with a total nameplate capacity of 960 MW, and 1,490 km of pipelines, further strengthening Oando’s infrastructure and operational capabilities.

Challenges Ahead: Unresolved Financial Issues

Despite its impressive market performance, Oando Plc still faces challenges. The company has not released audited financial statements since 2022, raising concerns among analysts and investors.

According to Oando’s 2023 unaudited financial statements, the company’s negative equity had risen to N236.3 billion, and total borrowings stood at N821.4 billion by the end of FY 2023.

Adebanjo noted, “Oando has not dropped audited financials since 2022, and as of their FY 2023 unaudited numbers, they still have legacy issues like their negative equity from compounded losses over time. Those are just some of the issues, but the acquisition fundamentals are very strong.”