CAUSE 1:
"Connect As" setting in Toad connection window not set correctly.
If the user account is a NORMAL user, trying to connect with "connect as" set to SYSDBA or SYSOPER will not be accepted (and vice versa).
CAUSE 2:
Changes between Oracle 11g and 12c where sys.user$ is no longer included in the SELECT_ANY_DICTIONARY system privilege.
Toad 11.6, which was built before this Oracle change, does not handle this change in permissions.
RESOLUTION 1:
In the connection window just below the database field is the "Connect As" drop down field. By default Toad is set to "NORMAL ". But the drop down allows users to also choose to connect the schema as "SYSDBA" or "SYSOPER".
Verify the correct setting is specified for user/connection being attempted.
In SQLPlus, if no "CONNECT AS" command is used in the connection statement, then Oracle defaults to "NORMAL " also.
RESOLUTION 2:
Newer versions of Toad for oracle (12+) addresses this and checks for the privileges properly between Oracle 11g and 12c connections.
Download the newest version of Toad for Oracle here.