Oando Energy Resources Announces Agreement for US$50 Million Private Placement

CALGARY, Alberta, January 28, 2014 /PRNewswire/ --

NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Oando Energy Resources Inc. ("Oando Energy Resources" or the "Company") (TSX:OER), a company focused on oil and gas exploration and production in Nigeria, today announced that it intends to complete an arms length non-brokered private placement (the "Offering") for proceeds of US$50,000,000. In addition, in connection with the Offering, OER intends to acquire a 5% interest in OML 131 in exchange for units of the Company (the "OML 131 Acquisition").

The Offering

The Offering is expected to consist of 35,070,063 common shares of the Company (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 common shares of the Company trade on the Toronto Stock Exchange ("TSX") at a price greater than C$3.50 for a period of at least 10 consecutive trading days, the Warrants will expire on the date which is 30 days following the last day of such 10 consecutive trading days.

Closing of the Offering is subject to receipt of applicable regulatory approvals, including approval of the TSX and the closure of the COP Acquisition. Securities issued will be subject to a hold period, which will expire four months plus one day from the date of closing of the Offering.

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 Offering has been negotiated at arm's length. Should OER elect to issue Common Shares to Oando Plc, the 94.6% shareholder of the Company, prior to or concurrent with the closing of the Offering as repayment of all or a part of a convertible loan outstanding to Oando Plc, the Offering is not expected to affect control of the Company and no new insiders are expected to be created as a result of the Offering.

The OML 131 Acquisition

In connection with the Offering, the Company intends to acquire the entire issued share capital of Medal Oil Company Limited which owns a 5% interest in OML 131 for a purchase price of US$5,000,000. The purchase price will be satisfied by the issuance of an additional 3,491,082 Units. The closing of the OML 131 Acquisition is subject to acceptance by the TSX and any requisite approvals from Nigerian regulatory authorities. Assuming completion of the OML 131 Acquisition and the COP Acquisition, OER will own a 100% interest in OML 131.

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:
Contact Information:
Pade Durotoye, CEO
Oando Energy Resources Inc.
pdurotoye@oandoenergyresources.com
+1-403-561-1713

Tokunboh Akindele
Head Investor Relations
Oando Energy Resources Inc.
takindele@oandoenergyresources.com
+1-403-560-7450

Jeremy Dietz/David Feick
Investor Relations
+1-403-218-2833
jdietz@tmxequicom.com
dfeick@tmxequicom.com

(OER. OER.WT. OER.WT.A.)