Oando Energy Resources Closes Private Placement and Converts Loan

CALGARY, Alberta, February 27, 2014 /PRNewswire/ --

Oando Energy Resources Inc. ("Oando Energy Resources" or the "Company") (TSX:OER), a company focused on oil and gas exploration and production in Nigeria, is pleased to announce it has closed its previously announced private placement of units (the "Private Placement") for proceeds of US$50,000,000. In addition, the Company converted to equity amounts outstanding under the US$1.2 billion facility agreement dated 10 February with Oando Plc (the "Oando Loan") (the "Conversion").

The Offering

Under the Private Placement, the Company issued 35,070,063 common shares (the "Common Shares") and 17,535,031 common share purchase warrants (the "Warrants") for gross proceeds of US$50,000,000 (each Common Share and half-Warrant, a "Unit") at a price of C$1.57 per Unit. Each whole Warrant will entitle the holder thereof to acquire one common share of the Company at a price of C$2.00 per common share for a period of 24 months from the date of the closing of the COP Acquisition (as defined below). If, after a period of six months from the closing of the COP Acquisition, the closing price of common shares of the Company on the Toronto Stock Exchange ("TSX") is greater than C$3.50 for a period of at least 10 consecutive trading days, the Warrants will expire within 30 days. The securities issued are subject to a hold period, which will expire on June 27, 2014.

It is anticipated that the proceeds of the Offering will be used by the Company to satisfy a portion of the purchase price for the proposed acquisition by the Company of the Nigerian upstream oil and gas business of ConocoPhillips (the "COP Acquisition"). The Private Placement was negotiated at arm's length.

The Loan Conversion

Further to its press release of February 10, 2014, OER has issued 432,565,768 Units to Oando Resources Limited, a wholly-owned subsidiary of Oando Plc, as repayment of principal and interest outstanding under the Oando Loan. The Units have the same terms as the Units issued pursuant to the Private Placement. Prior to the completion of the Private Placement and the Conversion, Oando Plc directly owned, and exercised control or direction over, 100,339,052 Common Shares, representing 94.6% of the Company's issued and outstanding Common Shares. As a result of the completion of the Private Placement and the Conversion, Oando Plc currently beneficially owns, or exercises control or direction over, 532,904,820 Common Shares, representing 92.9% of the Company's issued and outstanding Common Shares. Assuming exercise of the warrants issued to Oando Plc in connection with the Conversion, Oando Plc would beneficially own, or exercise control or direction over, 749,187,704 Common Shares, representing 94.8% of the Company's issued and outstanding Common Shares; however, Oando Plc is restricted from exercising any warrants that would result in its ownership of the Company exceeding 94.6%.

A copy of the early warning report required to be filed with the applicable securities commissions in connection with the Conversion will be available for viewing at http://www.sedar.com or can be obtained by contacting Ayotola Jagun, Chief Compliance Officer & Company Secretary of Oando Plc, by email at [email protected] or by telephone on +234-806-9806190.

Forward Looking Statements:

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, this news release contains forward-looking statements relating to intended acquisitions.

Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that such statements and information will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.

Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: risks related to international operations, the actual results of current exploration and drilling activities, changes in project parameters as plans continue to be refined and the future price of crude oil. Accordingly, readers should not place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive.

Additional information on these and other factors that could affect the Company's financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (http://www.sedar.com) for the Company. The forward-looking statements and information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

For further information:
Pade Durotoye, CEO
Oando Energy Resources Inc.
[email protected]
+1-403-561-1713

Tokunboh Akindele
Head Investor Relations
Oando Energy Resources Inc.
[email protected]
+1-403-560-7450

Jeremy Dietz/David Feick
Investor Relations
+1-403-218-2833
[email protected]
[email protected]

SOURCE Oando Energy Resources Inc.