Presentation to Capital Market Correspondents

1
Oando Plc The Future

• Presentation to Capital Market Correspondents
• Wale Tinubu
• Group Chief Executive
• 13th August 2007

NSE Quoted Company of the Year 2003, 2004
2
Oandothe future
Gas (Pipeline Transmission of Natural Gas)
Power
Marketing
Supply Trading
Exploration Production
Energy Services
Refining

• Dominant local player
• Expansion into other West African Markets

• Offering Product service lines through strategic
  alliances (e.g. Baroid, Halliburton)

• The dominant player in gas supply powering
  Nigeria's manufacturing base

• No. 1 marketer of Petroleum Products

• A Significant Opportunity for Oando

• Evolving into a leading player in the upstream

• Seeking opportunities to ensure product
  availability

exploiting synergies between subsidiaries
3
Contents

• Summary of Half year Performance
• Q2 2007 Performance
• Corporate Restructuring
• Questions

4
Overview of the Half Year financial Performance

• Strong revenue growth
• Strong contribution across the subsidiaries
• Efficient Cost containment strategy
• Improved profitability
• Stronger balance sheet
• Boost in Earnings per share
• Increase in market share in the downstream company

Overall increasing value delivery to shareholders
5
and 58 ahead of previous years position
Nmillions YTD 07 ACTUAL
YTD 06 ACTUAL VARIANCE
EPS of N3.25
EPS of N2.29
6
Current performance merely reflects the trend of
the last 5 years
5 year Revenue trend - Nbn
5 year PBT trend - Nm
44 CAGR
65 CAGR
7
Shareholders funds have also grown appreciably
over the same period
5 year trend in shareholders funds - Nbn
67 CAGR
8
In terms of revenue marketing and trading remains
the main contributors
100 N6,619m
100 N105,975m
Gross Margin
Turnover
MKTING
MKTING
ST
ST
OES
GNL
GNL
OES
PAT
100 N2,309m
MKTING
GNL
OES
ST
. As well as profitability too. Gaslink however
continue to impress year on year basis
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Operational highlights 1/2
Gas (Pipeline Transmission of Natural Gas)
Power
Marketing
Supply Trading
Exploration Production
Energy Services
Refining

• The Good
• PSF aids turnover growth market penetration
• Structure delayering foster operational
  efficiency
• Better cost control
• the not so good
• Increasing dependence on imported products
• Delay in receiving PSF claims from the govt.
• Industrial and General strike affected business
• Product shortages
• Gradual breakdown of infrastructure

• The Good
• Activities in steady pace on OPL 236
• Significant progress towards first
  oil-Pre-developmental stages near completion.
• the not so good
• Government bureaucracy

• The Good
• Power sector reform kick started
• the not so good
• Progress is still slow

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Operational highlights 2/2
Gas (Pipeline Transmission of Natural Gas)
Power
Marketing
Supply Trading
Exploration Production
Energy Services
Refining

• The Good
• Increasing market share
• Ability to compete against the international
  traders
• Growing profile along W/A coast
• the not so good
• Gradual breakdown of infrastructure
• Product shortages

• The Good
• Greenfield feasibility approved
• the not so good
• Government process is so slow

• The Good
• Becoming a leading local content player
• Identified promising acquisition targets
• the not so good
• Upstream players do not seem to be on target to
  meet local content targets

• The Good
• Greater Lagos expansion near completion
• Pre-developmental effort initiated on eastern
  flank expansion
• the not so good
• Worrying signals on the stability of gas supply

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Contents

• Summary of Half Year Performance
• Q2 2007 Performance
• Corporate Restructuring
• Questions

12
Second Quarter PAT is 11 above First
QuarterPerformance

• Nmillions 2007Q2 2007 Q1
  VARIANCE

EPS of N1.46
EPS of N1.79
13

and 49 ahead of last years second quarter
performance

• Nmillions 2007Q2
  2006 Q2 VARIANCE

EPS of N1.79
EPS of N1.22
14
Strong Q2 Performance
Nbn
Q2 2006
-12
Q2 2007
42
4
Q2 Bud
58
Revenues
Gross Margins
88
9
49
14
EBITDA
PAT
Q2 Numbers
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In terms of revenue marketing and trading
continue to be the main contributors
100 N1.24bn
100 N56.92bn
Trading
Marketing
Marketing
Trading
Gas
Energy services
Energy services
Gas
Q2 2007 Revenues
Q2 2007 PAT
As well as in profitability
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Mixed Macro and Internal Factors

• Good things have happened
• PSF operating better debt repaid
• Lower working capital requirement
• Lower interest costs compared to last quarter
• Cost containment strategies yielding result
• Improved remuneration of staff across cadres.
• Supply and Trading gaining wider acceptability
  and market share
• Efficient financing option arranged
• but there is still more to be done
• Continued high dependence on imported products
• Intermittent gas supply issues
• Inadequate infrastructure to support the
  downstream
• Industrial and General Strike due to price
  increase
• Man-hour lost to Election Holidays

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Contents

• Summary of Half Year Performance
• Q2 2007 Performance
• Corporate Restructuring
• Questions

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Behold our new corporate structure
The marketing business is NOW a separate entity
Oando Plc
The New Oando Group
98
100
100
100
95
100
Gaslink
Energy services
Supply and trading
Oando Production and development
Oando Exploration and production
Oando Marketing Limited
Oando Plc
Before
54
51
51
51
95
100
Gaslink
Oando Energy services
Oando Supply and trading
Oando Production and development
Oando Exploration and production
Oando Marketing
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Once again the rationale

• To align the interests of the investors in the
  subsidiary companies with those of shareholders
  of Oando Plc
• To promote transparency in the performance of the
  companies
• To avoid the possibility of value transfer and/or
  cross subsidisation
• To enable like for like comparison
• To enable better accountability for managers

Effect of the New Group Oando Plc is now a
group of companies with interest along the entire
energy chain Oando marketing now better placed
for peer group comparison Total elimination of
conflict of interest Oando Plc now owns 100
interest in all the subsidiaries except for 98
interest in Gaslink.
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.and the effect of Our corporate Restructuring

• Using YTD 2007 figures

Pre restructuring
Post restructuring
Number of shares in issue
572.3
754.1
Attributable earnings
1,860
2,309
Indicative per share earnings
3.25
3.06
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Finally, what can we look forward to this year

• Continue to seek ways to enter the refining space
  in the aftermath of the sale of the Port Harcourt
  refinery.
• Deployment of Business Intelligence Module-Oracle
• Seek to optimize the fallout from the recent
  product price adjustment
• Continue the ongoing cost operating and capital
  - containment
• Continue the ongoing drive to be the supplier of
  choice to petroleum marketers in the country
  majors and independents
• Explore opportunities in other countries along
  the West African Coast
• Bring another product service line rigs on
  stream
• Seek additional alliances that will enable the
  exploitation of the local content factor in the
  upstream
• Complete the ongoing greater Lagos pipeline
  expansion resulting in 300 increase in capacity
• Commence construction of the eastern flank
• Bring the marginal oil field OPL 56 to
  production
• Complete pre-production activities on OPL 236
• Advance monetization efforts on the other assets

• Corporate
• Marketing
• Supply and Trading
• Energy Services
• Gas
• Exploration and

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• Thank you
• Questions?