SEPLAT Raises Gas Revenues By 185% To US$77 Million (N15.4 billion)

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L-R Chief Executive Officer of the Nigerian Stock Exchange, Mr Oscar N. Onyema,(OON), Chief Executive Officer , Seplat Petroleum Company Development, Mr Austin Avuru and Chief Financial Officer, Seplat, Mr. Roger Brown at the presentation of facts behind the figures, subtitled “Blazing the Gas Trili” by Seplat at the Nigerian Stock Exchange on Monday

SEPLAT Petroleum Development Company Plc (“SEPLAT”), has announced that its revenues from gas sales is up by 185% to US$77 million, which is equivalent of N15.4 billion based on an official exchange rate of about N200 to the USD.

Seplat which is a leading Nigerian independent oil and gas exploration and production company recently revealed that its gas business has been expanded significantly hence the positive impact on its financials.

Austin Avuru, Chief Executive officer of the company recently disclosed at a facts behind the figures presentation at the Nigerian Stock Exchange (NSE) on 16 May that Seplat in 2015   successfully completed and commissioned the Oben gas plant phase I expansion. This expansion saw the Company’s overall gross processing capacity double to 300 MMscfd.

He also disclosed that the Oben gas plant phase II expansion is underway with additional processing modules ordered. Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 MMscfd.

“Our gas business takes on additional importance by providing a continuous revenue stream that is de-linked from the oil price. Our enlarged portfolio offers us the scope for greater diversification” Avuru said.

Presenting the details of SEPLAT’s full-year 2015 performance, ahead of its Annual General Meeting scheduled for 1 June 2016, Austin Avuru (Chief Executive Officer) and Roger Brown (Chief Financial Officer) informed the audience that working interest 2P reserves at the end of 2015 had increased 71% year-on-year to 480 MMboe, with a further 98 MMboe recognised as 2C resources.

Total reserves were reported as 578 MMboe. Average working interest production during 2015 averaged 43,372 boepd, ahead of guidance and up 41% year-on-year.  Within this, oil and condensate production accounted for 29,003 bopd (up 20% year-on-year) and natural gas production was 86 MMscfd (up 119% year-on-year). All of the natural gas production was supplied to the domestic market.

Although production was up year-on-year, the significantly lower oil price realisation and downtime of third party operated infrastructure adversely impacted revenue, more than offsetting the increased contribution of the gas business. Consequently, gross revenue for the full-year stood at US$570 million, down 26% year-on-year.  Net profit for 2015 stood at US$67 million and cash flow from operations before movements in working capital stood at US$190 million against capital investments of US$152 million.

Cash at bank and net debt at year end stood at US$326 million and US$573 million, respectively.  At the end of 2015, the net NPDC receivables balance stood at US$435 million, down from US$463 million at the end of 2014. Further receipts post period end have reduced the net NPDC receivables balance to a current level of around US$350 million.

The Board of Directors of SEPLAT is recommending a final dividend of US$0.04 per share, bringing the total dividend payment for 2015 to US$0.08 per share. Subject to the approval of the shareholders, the final dividend will be paid on or shortly after the AGM, which is scheduled to hold on 1 June 2016 in Lagos, Nigeria.

Looking ahead throughout 2016, the Company has set full year production guidance at 41,000 to 48,000 boepd and expects its capital expenditures to be around US$130 million.

Commenting on the Company’s 2015 results, Avuru said, “In 2015 we delivered on what was in our control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come. We acted quickly and decisively in response to the weak oil price environment, adjusting our work programme and cost structures. Against a bleak industry backdrop, we remained profitable with a strong balance sheet underpinning us. Having started the year strongly, our 2016 full year production expectation has been impacted by the current shut-in of the Forcados terminal. However, we are much better positioned to withstand such interruptions than in prior years.

He assured that Seplat’s “strong focus remains on protecting the business and managing value through effective cost reductions, optimising operations, deleveraging and strengthening the balance sheet. This will strategically position the Company to take advantage of opportunities that will inevitably follow this current downturn.”