Rating Release

Agusto & Co hereby assigns an indicative “A” rating to Niger Delta Exploration & Production PLC’s ₦10.318 billion Bond

The rating expires on 30-06-23

Agusto & Co hereby assigns an indicative “A” rating to Niger Delta Exploration & Production PLC’s (“NDEP”, “the Issuer” or “the Company”) ₦10.318 billion Five-Year 17% Fixed Rate Senior Unsecured Bond Due 2028 (“Series 1 Bond”, “the Bond” or “the Issue”) under the ₦20 billion Debt Issuance Programme. The rating reflects our opinion on the Issuer’s strong capacity to meet payment obligations on the Series 1 Bond evidenced by its healthy operating cash flow position and satisfactory profitability levels despite the challenging operating environment. The rating also takes into account the integrated nature of NDEP’s operations that have helped to build some resilience against industry-wide issues of crude oil theft and pipeline vandalism. However, the rating is constrained by concerns over the Company’s declining margins amid loss of revenue from crude oil sales and underproduction, as well as the vulnerability of its future earnings to headwinds from host community disturbances and low crude oil prices.

Niger Delta Exploration & Production PLC is an integrated indigenous energy company with operations across the upstream, midstream and downstream segments of the Nigerian Oil & Gas Industry. The Company has an operating interest in four upstream assets all located within the country’s onshore and shallow water areas. Its flagship upstream asset (“the Ogbele Field”) is a fully integrated oil and gas-producing asset, comprising a crude oil processing facility, a gas processing plant and a modular refinery. NDEP also plans to use the opportunity created by the ongoing divestments from onshore and shallow water areas by international oil companies (IOCs) to scale up its upstream assets, while pursuing geographical diversification through new oil and gas investments in other African countries.

The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.