Oando’s Nine-Month Profit Falls 47% to ₦106.45bn Despite Stronger Oil Production

The earnings decline was largely attributable to a dramatic reduction in finance income, which plunged by approximately 98 per cent to ₦8.98 billion from ₦369.69 billion a year earlier.

Oando attributed the contraction to lower interest income from loan receivables and bank deposits, alongside the absence of income from finance leases. The company also did not benefit from the one-off reversal of interest defaults that had boosted earnings in the previous year’s corresponding period.

The decline in profit came despite stronger underlying operating performance, with revenue increasing by nine per cent to ₦2.78 trillion, supported by higher crude oil liftings, increased gas and natural gas liquids (NGL) sales volumes, and improved realised prices.

Gross profit surged by 483 per cent to ₦174.5 billion, compared with ₦29.8 billion in the corresponding period of 2025, reflecting improved production efficiency and greater reliability across the company’s operating facilities.

Operating performance also recorded a significant turnaround, as Oando moved from an operating loss of ₦109.7 billion in the first nine months of 2025 to an operating profit of ₦159.7 billion in the same period of 2026.

The company’s operational improvements were underpinned by higher production, lower operating costs and improved facility availability.

Average daily production rose by 14 per cent year on year to 42,985 barrels of oil equivalent per day (boepd), compared with 37,614 boepd in 2025. Facility uptime also improved to 96.1 per cent from 85 per cent.

Crude oil production increased by 12 per cent to 12,193 barrels per day, while gas production rose by 13 per cent to 28,689 boepd. NGL production recorded the strongest growth, climbing by 53 per cent to 2,103 barrels per day.

The production gains translated into higher sales volumes across the group’s upstream portfolio. Crude oil liftings increased by 43 per cent to 3.97 million barrels, while natural gas sales rose by five per cent to 34.01 billion standard cubic feet.

NGL sales expanded by 90 per cent to 570,000 barrels, contributing to a 21 per cent increase in total exploration and production sales volumes to 10.21 million barrels of oil equivalent.

Commenting on the results, Oando Group Chief Executive, Wale Tinubu, said the performance demonstrated the benefits of disciplined execution under the company’s operatorship and renewed investment in its upstream assets.

He said improved efficiency, greater operational reliability, lower unit costs and increased production were contributing to stronger performance across the expanded portfolio.

Production operating costs declined by 22 per cent to $15.39 per barrel of oil equivalent, reflecting cost optimisation across transportation, logistics, services and information and communications technology, alongside increased production against a largely fixed field-cost base.

The company also reported no fatalities or lost-time injuries during the period, despite recording approximately 14.9 million working hours, representing a 55 per cent increase on the corresponding period of 2025.

On its financial position, Oando said total borrowings had declined to ₦2.16 trillion, approximately 22 per cent below the peak recorded at the end of 2024. Cash generated from operations stood at ₦285 billion, while capital expenditure amounted to ₦110.7 billion, largely directed towards drilling activities across Oil Mining Leases (OMLs) 60–63.

The group’s seven-well drilling programme for 2026 is also progressing across its operated assets.

Oando said drilling at Idu 6ST and Idu 15 had been completed, with both wells brought on stream. Workovers at Samabri 4T and Samabri 7T had also been completed, while drilling continued at Idu T and Samabri A50.

The final well in the programme, Ogbainbiri, is scheduled to commence drilling in December.

Upon completion, the campaign is expected to add between 16,000 and 20,000 boepd in gross production, helping to sustain output and compensate for natural declines across existing fields.

The initiative forms part of the company’s medium-term ambition to achieve production of approximately 100,000 boepd within the next four to five years.

Beyond its upstream operations, Oando is expanding its presence in the clean mobility market through its electric bus partnership with the Lagos Metropolitan Area Transport Authority (LAMATA).

The company disclosed that its electric buses had recorded more than 212,000 passenger journeys in the first nine months of 2026, with average capacity utilisation of 73 per cent.

A further 11 electric buses, representing the first batch of a planned 50 additional units, have arrived in Lagos, bringing the fleet to 13. The expanded fleet is expected to enter commercial service in the fourth quarter, with LAMATA operating the buses on behalf of the Lagos State Government.

Looking ahead, Oando has narrowed its full-year production guidance to between 40,000 and 45,000 boepd, while projecting capital expenditure of approximately $90 million to $100 million for 2026, with spending focused on high-impact, short-cycle upstream activities.

Tinubu said the company’s priorities for the remainder of the year included completing its seven-well development programme, maintaining operational reliability and strengthening shareholders’ funds through a planned equity raise.

According to him, the proposed capital-raising exercise is intended to reduce leverage, improve the company’s capacity to finance future expansion and create room for potential shareholder distributions.

The results present a contrasting picture of Oando’s financial performance: while its operating business recorded substantial improvements in production, revenue and profitability at the operating level, the sharp reversal in finance income continued to weigh heavily on its bottom line.

For investors, the distinction between operating performance and reported earnings will remain important as the company enters the final quarter of 2026, with attention likely to centre on the execution of its drilling programme, debt reduction efforts and the ability to sustain production growth while improving overall profitability.