By Emmanuella Opara | November 5th 2026
KEY POINTS
- Oando Plc reduced production operating costs by 22 per cent to $15.39 per barrel of oil equivalent in the nine months to September 2026.
- Average daily production increased by 14 per cent to 42,985 barrels of oil equivalent per day.
- Revenue rose nine per cent to N2.78tn, while gross profit climbed 483 per cent to N174.5bn.
- The company invested N110.7bn in capital expenditure, mainly in drilling across its OML 60–63 assets.
- Oando expects its seven-well drilling programme to add between 16,000 and 20,000 barrels of oil equivalent per day in gross production.
MAIN STORY
Oando Plc has reduced its production operating costs by 22 per cent to $15.39 per barrel of oil equivalent in the first nine months of 2026, while increasing average daily production by 14 per cent to 42,985 barrels of oil equivalent per day.
The figures, contained in the company’s unaudited nine-month financial results, compare with production costs of $19.67 per barrel and average output of 37,700 barrels of oil equivalent per day in the corresponding period of 2025.
Oando attributed the lower costs to improvements in transportation, logistics, services and information and communications technology, as well as higher production across a largely fixed field cost base.
Facility uptime also improved to 96.1 per cent from 85 per cent in the previous year’s corresponding period, indicating increased reliability across its production and evacuation infrastructure.
The company’s Group Chief Executive, Wale Tinubu, said the performance reflected the impact of investment and operational improvements across its upstream assets.
“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,” Tinubu said.
Crude oil production increased by 12 per cent to 12,193 barrels per day, while gas output rose by 13 per cent to 28,689 barrels of oil equivalent per day. Natural gas liquids production recorded the strongest growth, increasing by 53 per cent to 2,103 barrels per day.
The higher output also supported growth in sales volumes. Crude oil lifts 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. Natural gas liquids sales climbed by 90 per cent to 570,000 barrels.
Overall, exploration and production sales volumes increased by 21 per cent to 10.21 million barrels of oil equivalent.
The operational gains were reflected in the company’s financial performance. Revenue rose by nine per cent to N2.78tn, while gross profit increased to N174.5bn from N29.8bn in the same period of 2025.
Oando also recorded an operating profit of N159.7bn, reversing the N109.7bn operating loss reported a year earlier.
Cash generated from operations stood at N285bn, while total borrowings declined to N2.16tn, representing a 22 per cent reduction from the peak recorded at the end of 2024.
The company spent N110.7bn on capital expenditure during the period, with most of the investment directed towards drilling activities across its OML 60–63 assets.
Its seven-well drilling programme for 2026 has progressed across operated fields. Drilling at Idu 6ST and Idu 15 has been completed, with both wells brought on stream. Workovers at Samabri 4T and Samabri 7T have also been completed.
Drilling was continuing at Idu T and Samabri A50, while the final well, Ogbainbiri, was scheduled to commence drilling in December.
Oando expects the programme to contribute between 16,000 and 20,000 barrels of oil equivalent per day in gross production. The additional output is expected to help maintain production levels and offset natural declines across its operated assets.
The company is targeting average production of approximately 100,000 barrels of oil equivalent per day within the next four to five years.
Outside its upstream operations, Oando reported progress in its electric mobility partnership with the Lagos Metropolitan Area Transport Authority. The service recorded more than 212,000 passenger journeys in the first nine months of the year, with average capacity utilisation of 73 per cent.
Eleven additional electric buses, the first batch of a planned 50, arrived in Lagos during the period, increasing 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.
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 directed towards high-impact, short-cycle upstream activities.
THE ISSUES
The reduction in production costs alongside higher output points to improved operational efficiency across Oando’s upstream portfolio. Lower unit costs can improve the economics of production, particularly when accompanied by stronger sales volumes and higher facility availability.
However, sustaining the gains will depend partly on the successful completion of the drilling programme and the company’s ability to manage natural declines in its existing fields.
The planned investment also comes against a financial position that includes N2.16tn in borrowings. Oando has indicated that an impending equity raise will form part of its efforts to strengthen shareholders’ funds and reduce leverage.
WHAT’S BEING 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,” Wale Tinubu, Group Chief Executive of Oando Plc, said.
WHAT’S NEXT
Oando’s immediate priorities include completing its seven-well drilling programme, bringing the remaining wells into production and sustaining operational reliability.
The company is also expected to pursue its planned equity raise and capital expenditure programme, while working towards its production target of approximately 100,000 barrels of oil equivalent per day over the next four to five years.
BOTTOM LINE
Oando’s nine-month results show lower production costs, higher output and a return to operating profitability. Whether these improvements can be sustained will depend on the delivery of its drilling plans, continued production growth and efforts to strengthen its balance sheet.
