Nigerian leading independent energy company listed on both the Nigerian Exchange (NGX) and the London Stock Exchange (LSE), Seplat Petroleum Development Company Plc, yesterday presented its unaudited results for the three months ended March 31, 2021, showing a 16.8% growth in revenue to $152.4m, increased operational efficiencies and a further reduction in costs.
The directors announced the adoption of a quarterly dividend policy, effective immediately with the payment of US2.5 cents per share in the quarter under review, from Profit before tax (PBT) of $28m, a robust improvement, when compared to the $95.7m loss reported in the same period of 2020.
Meanwhile, the board will at the forthcoming annual general meeting slated for May 20, 2021, seek shareholders’ approval for a name change to Seplat Energy Plc, which it believes would reflect the company’s evolving strategy.
On the outlook for 2021, the directors expect an production unchanged at 48-55 kboepd for the full year, subject to market conditions, as well capital expenditure guidance at $150m for the full year, as well as 5.0MMbbls hedged at $35-$45/bbl from Q2 to Q4 2021.
“For 2021 we expect to produce an average of 48,000 – 55,000 boepd, taking into account the impact of OPEC+ quotas. We continue to hedge against oil price volatility and expect a higher proportion of revenues to come from long-term gas contracts at stable prices,” the directors added.
The statement by the company also quoted them as saying: “We have significant cash resources and will continue to manage our finances prudently in 2021, expecting to invest $150m of capital expenditure across the full year, with nearly $33m already invested. We remain confident that our ongoing cost-cutting initiatives and prudent management of cash will enable further reductions in debt, whilst supporting dividend payments and investment for growth.
“Following its successful funding, the completion of the ANOH project remains a major priority. Although we expect some COVID-19 related delays to push completion into early 2022, following a cost optimisation programme we now expect the project to cost no more than $650m, substantially below the $700m budget previously stated at Final Investment Decision.
Commenting on the results, Roger Brown, the Chief Executive, said the company “made a progressive start to the year, delivering oil and gas production volumes of 48,239 boepd, within our guidance range.
“With the Gbetiokun field at OML40 now back in production, we are currently achieving average daily volumes of nearly 54 kboepd so far in April and we will build on this as we add additional oil and gas wells this year.
“Our flagship ANOH gas project is proceeding as planned and was fully funded in February when our joint venture company, AGPC successfully raised $260 million of debt financing. In addition, the success of our $650 million Eurobond issuance in March demonstrates investor confidence in our prudent financial management and the exciting future ahead for the Company and its stakeholders,” he added.
Continuing, Brown assured that “as we drive forward our strategy of being a low-cost energy provider delivering reliable, affordable and sustainable energy to the young, fast-growing population of Nigeria, energy transition – which delivers on Nigeria’s social development goals in tandem with the climate agenda – is essential.”
According to him, “this is the backbone of Seplat’s strategy and we will be communicating how we plan to achieve this over the coming months. To that end, the Board took the decision to change our name to Seplat Energy PLC, which more adequately reflects our ambitions of providing a broader energy mix. We will present the name change to our shareholders for approval at the AGM on 20 May 2021.”
