Seplat Energy Plc yesterday outlined major steps being taken to drive its energy transition plan and unlock greater values for shareholders, with an assurance that ongoing projects are on course to dramatically change the energy equation in Nigeria.
Addressing shareholders yesterday at its 10th Annual General Meeting (AGM), Chairman, Seplat Energy Plc, Mr Basil Omiyi, said over the past 12 months, the company had taken significant steps towards fulfilling its new purpose and vision on the energy transition.
He said the company has been scaling up its midstream gas business to increase the amount of natural gas supplied towards powering Nigeria’s electricity grid, thereby displacing diesel use in power generation.
He added that the company’s new energy business has also been tasked with developing power and renewable energy.
According to him, the company’s gas business remained strong through the year, as good progress was made with the construction of the ANOH Gas Processing Plant, which now awaits the completion of third-party infrastructure before it can commence operations, projected for the final quarter of 2023.
He pointed out that the positive impact of renegotiated gas sales agreements (GSAs) in second half of last year provided healthy support for revenue growth and profitability while the company continues to focus on increasing capacity utilisation at its Oben Gas Processing Plant.
Seplat Energy, which is listed on both the Nigerian Exchange Limited (NGX) and the London Stock Exchange (LSE), held its 10th AGM virtually with shareholders, regulators, company directors, and the media, amongst other stakeholders joining virtually.
Omiyi said for the 2022 full year, the company’s total revenue rose by 29.8 per cent to $951.8 million while profit before tax rose by 15.3 per cent to $204.4 million.
With the healthy financial performance and solid cash position, the Seplat Energy Board recommended a special dividend of US 5 cents per share to be paid to shareholders, in addition to the final quarterly dividend of US 2.5 cents per share. This brings total dividend for the year to US 15 cents per share. The shareholders at the meeting approved the dividend payout, which will be made on or around May 16, 2023 to shareholders whose names appear in the company’s register at the close of business on April 18, 2023.
Omiyi said the company’s oil business started the year on a strong footing, with working interest production of 29,078 barrels of oil per day (bopd) and 30,338bopd in first quarter 2022 and second quarter-2022 respectively, but in the third quarter, production was impacted negatively by evacuation problems at the Forcados Oil Terminal (FOT), not being available for a period.
“Thankfully, the much-delayed launch of the Amukpe-Escravos Pipeline (AEP) provided some relief as we were able to flow c.10,100bopd (working interest production) during the period. The AEP is now a major export route for our largest assets at OMLs 4, 38 and 41. As a result, our reliance on the Trans Forcados Pipeline and FOT is significantly lower, reducing risks of downtime while providing a solid base for stronger export volumes and revenues.
“At the same time, we have strengthened our approach to understanding and evaluating climate risk, which we have re-designated as a key risk to our business.
“We have adopted a new board-approved climate change policy and have advanced a major component of our decarbonisation strategy: eliminating routine flaring by the end of 2024 through our flares out initiative, which is six years ahead of Nigerian regulatory requirements and the World Bank’s initiative to achieve Zero Routine Flaring by 2030.
“These steps form part of a transition plan that will align our business strategy with the overarching goal of the Paris Agreement to limit mean global temperature rise to well below 2°C and contribute to supporting Nigeria’s pathway to achieving carbon neutrality by 2060. This plan is subject to evaluation, approval and oversight of our Board and Management teams and is underpinned by actionable, specific initiatives for decarbonising our operations and increasing the overall sustainability of our business model,” Omiyi said.
In accordance with guidance provided by the Taskforce on Climate-related Financial Disclosures, and as required under the terms of our listing on the London Stock Exchange, Omiyi announced that the company had published its first Climate Risk and Resilience Report, which is a separate and comprehensive document that outlines its approach to climate change risk.
Shareholders who spoke at the meeting commended the company.
President, Noble Shareholders Solidarity Association (NSSA), Mr. Matthew Akinlade commended the board and management for a good performance, in spite of the challenges of year 2022.
“You were able to raise revenue by about 38 per cent and cost of sales at just 18 per cent, which shows an effective management of the company’s cost,” Akinlade said.
“I want to commend the company for the special dividend of 5 cents, in addition to the final dividend of 2.5 cents, bringing the total to 15 cents. We are, indeed, very grateful and we appreciate the Board for being consistent in dividend payment and ensuring a generous reward to the shareholders at a very difficult time, when most companies are even finding it difficult to maintain profitability,” another shareholder, Mr. Patrick Ajudua, said.
Chief Operating Officer, Seplat Energy, Mr. Samson Ezugworie, outlined that as part of Seplat Energy’s drive to become a leading supplier of lower carbon and renewable energy, it is exploring ways to expand into these new and exciting markets.
“The first and most obvious option is to provide more gas for Nigeria’s power sector, to reduce the country’s reliance on imported diesel fuel, which is highly carbon intensive and a drain on the nation’s wealth.
“We will also look at hybrid systems where we install solar or other renewable technology alongside gas, which will provide baseload power at all times,” Ezugworie said.
