Oando Collects 2 Inland Barge Rigs from Shell

Oando Energy Services has emerged Nigeria's largest indigenous drilling contractor with Oando's acquisition of two inland barge rigs from Shell Petroleum Development Company of Nigeria Limited (SPDC) for an estimated US $43.5 million inclusive of VAT.

This latest acquisition brings to five, the total number of rigs in Oando's fleet and clearly reinforces the company's position as the leading beacon in the oilfield services sector of Nigeria's oil and gas industry.

The two former Parker Drilling rigs which were purchased by SPDC in 2006 have the following specifications:

Rig Name Rig Type Pressure Output Horse Power Drilling Depth Application
Rig 1 Swamp barge 10,000 psi 3,000 25,000 ft Drilling and work-over wells
Rig 2 Swamp barge 10,000 psi 3,000 30,000 ft Drilling and work-over wells with additional cantilever functionality

Commenting on the acquisition, Mr. Uche Dimiri, Chief Executive Officer, Oando Energy Services, said. "The Niger Delta swamps contain abundant reserves that are crucial to Nigeria achieving its plan to increase production levels to 4 million barrels per day by 2010. The understanding that there must be increased drilling activity across all stages of oil exploitation, from exploration to development, for the government's targets to be realized forms the basis of our continued investments in swamp drilling rigs. The cantilever capability of Rig 2 (formerly Parker rig 75) is unique in Nigeria. This feature enables Rig 2 to drill multiple well slots while remaining at the same client location, thus optimising reservoir drainage while reducing the overall cost of well construction. We intend to combine this uniqueness with our superior community relations expertise to deliver not only significant cost savings but other operational efficiencies to our customers. An added feature of Rig 1 is its 3,000 horsepower rating which gives Oando the flexibility to upgrade it to a High Pressure, High Temperature (HPHT) rig. This conversion will increase to two the number of such rigs in-country for exploiting reservoirs with such peculiarity."

"Rig 2 was acquired together with an existing contract whilst Rig 1 (formerly Parker 73) is scheduled to go to shipyard where it will undergo life enhancement and upgrade prior to its deployment in 2010." Mr. Dimiri added.

Mr. Wale Tinubu Group Chief Executive said, "This latest acquisition boosts our investment to approximately $250 million out of the $500 million five-year development plan announced prior. With a further resolve to increase our rig fleet in the near future, we are positioning Oando as the partner of choice for world-class land and swamp oil field services. By the purchase of an asset already in contract, we expedite value extraction for our shareholders, whilst guaranteeing significant and steady long term revenue for the group."