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Tag: Seplat

  • Seplat: Africa accounts for 7.5% of world’s proven oil reserves

    Records have shown that Africa holds an estimated 7.5 per cent of global proven oil reserves, about 126.5billion barrels and 7.1 per cent of global proven gas reserves about 487.8 trillion cubic feet.

    Operations Director, Seplat Petroleum Development Company Plc, Effiong Okon, stated this while delivering a keynote address at the Africa Exploration & Production (E&P) summit in London, adding that Africa is the destination for gas development and investment.

    He said: “Oil and gas play strategic role in the economies of African countries giving them power and influence on world stage, and this trend is likely to continue with new discoveries in Ghana, Egypt, Algeria, Libya, Tunisia, Mozambique and Uganda. These opportunities have attracted the oil majors with an increasing participation of indigenous oil companies’’.

    In his keynote entitled: Oil and gas rising in Africa, Okon provided an overview of the oil and gas landscape in Africa, stressing that there has been abundant discoveries of oil and gas reserves, which have over the years attracted key international oil companies to the continent. Alongside these majors is the rising of the independents that have also come into existence and have continued to grow in leaps and bounds. He said the appetite for African oil and gas is still growing and continues to present significant investment opportunities. Investors are attracted to the many recent and ongoing bid rounds in the continent.

    “Most of the oil majors and the independent companies have continued to flourish with some exporting not just oil but also gas out of the continent. Most companies had to restrategise portfolio balancing after the recent downturn in oil price. Assets have been changing hands between the oil majors and the Independents,” he said.

    Some challenges, according him, still exist despite the significant discoveries and impressive production of oil and gas across the continent, which has a good balance of oil and gas. He said Africa has a good balance of oil and gas but still faces the challenge of importing the refined products with the lack of sufficient refining capacity.

    “A lot of people in Africa still do not have access to electricity.  Lack of adequate infrastructure also still presents a problem. These challenges present huge opportunities for gas development and investment. As a result, a company like Seplat has remained bullish with its gas development. Seplat with a strategic location on the gas hub in the Niger Delta, facilitates its gas development,” he added.

    According to him, the growing need for capital for emerging infrastructure such as refining and transportation of petroleum commodities and products and the development of a robust petrochemical industry, place the continent at a vantage point for investments.

    The Seplat director said Seplat contributes about 30 per cent of domestic gas supply in Nigeria.  He said given the huge opportunity in Nigeria, the company has continued to make significant investment of well over $300 million in growing its gas business resulting to its massive current daily production capacity. He said: “Seplat current well stock is capable of delivering around 400 million standard cubic feet per day (mmscfd) gross.

    “In addition to these, our Sapele Gas Plant upgrade and Assa North-Ohaji South (ANOH) project is to add 315MMscfd capacity by 2020.”

    Okon noted that of the top-20 discoveries globally between 2012 and 2016, Africa had the greatest contribution compared to any other area.

    According to him, 2019 looks promising for Africa with discoveries in South Africa, Egypt and Angola.  “Africa is home to some of the world’s fastest growing economies, some of them lifted by new oil and gas discoveries,” he stated.

  • Seplat assures shareholders of higher returns

    The board and management of Seplat Petroleum Development Company Plc have assured shareholders that the growth in the operations of the leading indigenous oil and gas company will lead to increased dividend payouts and share price appreciation in the years ahead.

    At the annual general meeting yesterday in Lagos, the company reiterated its commitment to stronger growth in the oil and gas sector and increased returns to its shareholders.

    Addressing the shareholders, Chairman, Seplat Petroleum Development Company Plc,  Dr Ambrose Orjiako, said the company’s 2018 operational and financial performance reflected the significantly higher levels of production uptime at its core oil producing assets combined with a firmer, albeit still volatile, oil price and increased contribution from the company’s gas business.

    He noted that the company’s results from the previous two years were characterised by  the extended period of force majeure at the Forcados terminal from February 2016 to June 2017, pointing out that stable operations have positioned the company to deliver better results.

    “As we enter 2019, our reliable production base, low unit cost of production and discretion over capital commitments will allow the business to remain highly free cash flow generative and profitable. In the absence of any major interruption or force majeure event, this will enable Seplat to honour its dividend policy and provide an attractive yield to our shareholders in addition to the potential for capital appreciation,” Orjiako said.

    He said the company would selectively invest in low risk oil production drilling opportunities within the existing portfolio and the continued expansion of the gas business, with 2019 set to be the year that activity intensifies at the large scale Assa-North and Ohaji-South (ANOH) gas and condensate development.

    According to him, Seplat remains an ambitious growth-orientated company that is in a position of strength to capture inorganic opportunities where it can leverage its competitive advantages to seek out carefully considered, price disciplined and value accretive acquisitions.

    Chief Executive Officer, Seplat Petroleum Development Company Plc, Mr. Austin Avuru, said Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation providing us with an extremely solid foundation for growth in the coming years.

    According to him, at the company’s core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that it can confidently plan and invest long into the future to realise the full potential of those blocks.

    He outlined that as the company continues to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board had taken the final investment decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for its gas business.

    According to him, disciplined capital allocation continues to remain at the core of the company’s activities evidenced by its continual deleveraging of its debt levels to the current balance of $350 million.

    “In 2018, Seplat reinstated the dividend, increased capital investments and with the resources and headroom in our capital structure, we are equipped to capitalise on organic and inorganic growth opportunities as they may arise,” Avuru said.

    He also announced that Seplat board has taken the final investment decision for the ANOH and Amukpe to Escravos alternate export pipeline which will be completed and fully commissioned in second quarter of 2019.

    “These projects are part of the future expansion initiatives of Seplat in Nigeria’s oil and gas industry,” Avuru said.

    Seplat posted N228 billion turnover in the year ended December 31, 2018, 65 per cent growth on N137 billion recorded in the 2017. Profit before differed tax stood at N73 billion, indicating 480 per cent increase on N13 billion recorded in 2017. A review of Seplat 2018 results indicated positive performance across most financial indices, confirming the company’s position as one of the well managed indigenous oil firms in Nigeria. Gross profit grew by 84 per cent to N120 billion from N65 billion reported in 2017. Operating profit stood at N95 billion, representing a growth of 177 per cent on N34 billion recorded in 2017. Seplat’s net profit after tax however dipped by 45 per cent from N81 billion to N45 billion.  in December 2018. Seplat is paying a final dividend of $0.05 per share to all its shareholders.

  • Seplat posts $33m Q1 profit

    Seplat Petroleum Development Company Plc has posted a net profit of $33 million in the first operation ended 31 March 2019after adjusting for a tax credit of US$13 million. – Amukpe to Escravos pipeline is anticipated to be operational in Q2 2019.

    The results showed positive impact of the 2018 debt refinancing and subsequent deleveraging, which resulted in a 38 per cent year-on-year reduction in finance costs to $16 million (2018: $26 million), the firm said.

    According to the firm’s General Manager, External Affairs and Communications, Dr. ChiomaNwachuku, Seplat Petroleum is a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, adding that information contained in this statement is un-audited and is subject to further review.

    Seplat’s Chief Executive Officer, Austin Avuru, said: “Our operations have continued to perform in line with expectation, with the phasing of our 2019 work programme such that the production uplift will be felt throughout the second half of the year as we step up drilling activities to focus on capturing the numerous high margin and short-cycle cash return opportunities within our current portfolio.

    “The next phase of growth for our gas business is now gathering pace following FID for the Assa North-Ohaji South (ANOH) project, with governments first tranche of equity investment received. We have continued to deleverage the balance sheet and self-fund investments into the existing portfolio from operational cash flow, while retaining the financial flexibility and available resources that will enable Seplat to capitalise on what we expect to be an increasingly busy pipeline of inorganic growth opportunities that fit our acquisition criteria.”

    Production uptime in first quarter stood at 85%; reconciliation losses are yet to be finalised but are expected to remain at levels consistent with prior periods. Full year 2019 production guidance maintained at 49,000 to 55,000 barrels of oil equivalent per day (boepd) on a working interest basis, comprising 24,000 to 27,000 barrels of oil per day (bopd) liquids and 146 to 164 million standard cubic feet per day (MMscfd), which is about 25,000 to 28,000 boepd gas production.

  • NNPC, Seplat to deliver gas for domestic use

    THE Nigerian National Petroleum Corporation (NNPC) and Seplat Petroleum Nigeria Limited are partnering  to deliver 300millon standard cubic of gas per day to the domestic market.

    The expected output from the Asa North/Ohaji South (ANOH) Gas Processing Compan, would bridge the shortfall in domestic gas supply.

    The project, an integral part of the 7 Critical Gas Development Project (7CGDP) of the NNPC, is designed to part supply the estimated 3.4 billion cubic feet of gas per day shortfall which could arise as demand increases to about 7 bcf/d by 2020.

    At the inauguration, Group Managing Director of the NNPC, Dr. Maikanti Baru, urged board members to sustain the momentum and ensure timely delivery of the project, not just within budget but below the budget without compromising the industry best practices of zero incidences.

    “We believe that a private sector driven project should deliver much faster, hence we came up with a structure outside the existing Joint Venture with the intent of getting the appropriate entities to participate in the project,’’ Baru said, assuring that NNPC was fully committed to the initiative and would do whatever is possible to keep the dream alive and ensure smooth delivery of the project.

    Chairman of the Board, Saidu Mohammed, who also doubles as NNPC Chief Operating Officer, Gas & Power, affirmed the determination of the company’s directors to work assiduously with Management to ensure attainment of set tasks and targets.

    Mohammed described the inauguration as history in the making, saying this was the first time a midstream company has been unbundled to run on its own from a JV operation. He expressed confidence that board members would ensure full activation of the shareholders agreement and grow the company to enviable heights in line with agreed timelines.

    On his part, Austin Avuru, Vice Chairman of the Board and Chief Executive Officer of Seplat Petroleum, described the event as memorable for the indigenous firm.

    He said under the watch of the NNPC , Seplat and the corporation, have made progress in terms of cementing a partnership that is none acrimonious, saying that Dr. Baru has moved that level of support to the current venture.

    He said the GMD demonstrated his confidence in indigenous operators by allowing “a modest Nigeria Company like Seplat, to strike this kind of JV with NNPC to deliver a project that is not far from a billion USD and to deliver 300mscf/d into the domestic market and to structure a company to do what others may start doing in future – establishing a stand-alone midstream company.’’

    The AGPC functions as a partnership between Nigerian Gas Company (NGC), a subsidiary of the NNPC, and Seplat Petroleum under a 50-50 equity structure.

     

     

  • NNPC, Seplat shop for N253b to develop gas project

    Nigerian National Petroleum Corporation (NNPC) and Seplat Petroleum Development Company Plc are shopping for $700 million (about N253 billion) to develop their joint venture gas project in Imo State, it was gathered at the weekend.

    NNPC and Seplat had in August, last year, signed five agreements for the construction of the gas processing plant with an initial capacity of 300 million standard cubic feet per day of gas (mmscf/d). The agreements were meant to expedite the development of the project, which is expected to deliver about 3 billion standard cubic feet of gas per day in the future.

    The project known as Assa North-Ohaji South (ANOH) gas development scheme, is one of the 7 Critical Gas Development Projects (7CGDP) identified to boost gas production and infrastructure development in the country.

    A special purpose vehicle (SPV) known as ANOH Gas Processing Company (AGPC) is being promoted by the two firms to develop, build, operate and maintain the gas processing plant,

    The Managing Director of Seplat, Austin Avuru, said Seplat and Nigerian Gas Company (NGC) will provide 60 per cent of the funds as equity, while ANOH will source the balance as debt.

    “Both parties already have each contributed $100 million in equity. There will be another equity injection and at the back end of it will be debt,” Avuru said.

    The plant, which will process wet gas from the unitised upstream fields at oil mining leases (OMLs) 53 and 21, has an initial capacity of 300 mmscf/d.

    It’s scheduled to begin production by the last quarter of 2020 and the first supply is targeted in 2021, Avuru said.

    Federal Government is encouraging investments in gas infrastructure to improve supplies to power companies and diversify the economy away from oil, which currently accounts for the bulk of its revenue.

    ANOH will target local customers and has the capacity to double production “depending on domestic demand and the availability of feeds including third-party gas,” Avuru said.

    Seplat will more than double capital spending to $200 million this year from 2018 as it seeks to take advantage of ‘relative stability’ in the Niger Delta region, he said, adding that if Niger Delta is stable, the rest is easy for us to handle.

    Seplat, which is listed on the London and Nigerian Exchanges, will spend about 70 per cent of its capital budget on drilling after a three-year lull, Avuru said. The rest will be for “facilities and gas development,” he added.

    Seplat is targeting output of 49,000 to 52,000 barrels of oil equivalent a day (boe/d) this year and will probably start seeing a gradual increase in production from next year on sustained expenditure and stability in the Niger Delta, he said.

    He urged the AGPC to work hard and deliver the project on schedule, within budget, and to specification, stressing that it was designed as world-class gas processing plant with a capacity to deliver between 3.0 billion and 3.4 billion standard cubic feet of gas daily.

    The Nigerian Gas Processing and Transportation Company (NGPTC) an arm of Nigerian Gas Company, signed the execution of Heads of Terms (HoT) on behalf of NNPC with Seplat and AGPC on December 19, 2017.

    As a result of the HoT, the steering committee for the AGPC project, provided the leadership and broad guidance for the development and finalisation of the various commercial agreements required to underpin the project.

    Avuru said the ANOH gas project is a landmark project, which captures the essence of the gas infrastructure development initiative of the Federal Government as encapsulated in the 7 Big Wins and 12 Business Focus Areas programmes.

     

  • Seplat urges public, private sector investments

    Seplat Petroleum Development Company Plc, has urged the public and private sectors to invest more in research and development aimed at promoting safety.

    The oil company noted that such investments should cut across the various sectors of the economy as is the case for the oil/gas and aviation sectors, among others.

    Its Operations Director, Effiong Okon, stated this at the Nigeria Professional Development Conference and Exhibition in Lagos. It was organised by the American Society of Safety Professionals (ASSP), Nigerian Chapter. The theme of the event was ‘Sustainable safety for national development.’

    According to Okon, safety is at the forefront of Seplat’s activities, which have enabled it to conduct its activities across the country with minimal footprint. “We approach safety, using the people, environment, asset and reputation model incorporated in our ‘safety first’ policy. We only execute projects that promote continuous reduction of environmental impact in our operations,” he said.

    He added: “We track offshoots from our operations and strive to reduce adverse effects from our facilities. Our internal use of gas flared reduced by over 95 per cent between 2011 and 2017.

    “Seplat has incorporated key programmes across all its facilities to achieve flares out by 2020 in line with keeping the environment safe. We comply with all regulatory requirements and benchmark our performance with international standards.”

    Okon said the company has seen continuous decline in safety incidents over the years and would continue to deploy safety training and coaching to hone safety consciousness and skills of its local contractors.

    Progressively managing challenges around establishment of support infrastructure for safety management, he noted, remained a priority to the company, adding that: “Since the taking over of our current assets, third-party interference on Seplat’s infrastructure had been significantly minimised.”

  • Seplat urges public, private sector investments

    Seplat Petroleum Development Company Plc, has urged the public and private sectors to invest more in research and development aimed at promoting safety.

    The oil company noted that such investments should cut across the various sectors of the economy as is the case for the oil/gas and aviation sectors, among others.

    Its Operations Director, Effiong Okon, stated this at the Nigeria Professional Development Conference and Exhibition in Lagos. It was organised by the American Society of Safety Professionals (ASSP), Nigerian Chapter. The theme of the event was ‘Sustainable safety for national development.’

    According to Okon, safety is at the forefront of Seplat’s activities, which have enabled it to conduct its activities across the country with minimal footprint. “We approach safety, using the people, environment, asset and reputation model incorporated in our ‘safety first’ policy. We only execute projects that promote continuous reduction of environmental impact in our operations,” he said.

    He added: “We track offshoots from our operations and strive to reduce adverse effects from our facilities. Our internal use of gas flared reduced by over 95 per cent between 2011 and 2017.

    “Seplat has incorporated key programmes across all its facilities to achieve flares out by 2020 in line with keeping the environment safe. We comply with all regulatory requirements and benchmark our performance with international standards.”

    Okon said the company has seen continuous decline in safety incidents over the years and would continue to deploy safety training and coaching to hone safety consciousness and skills of its local contractors.

    Progressively managing challenges around establishment of support infrastructure for safety management, he noted, remained a priority to the company, adding that: “Since the taking over of our current assets, third-party interference on Seplat’s infrastructure had been significantly minimised.”

  • Seplat grows profit by 499% to N80.6b

    Seplat Petroleum Development Company Plc recorded strong growths in sales and profitability in 2018 as pre-tax profit quadrupled to N80.6 billion.

    Key extracts of the audited report and accounts of Seplat for the year ended December 31, 2018 showed that turnover rose by 65 per cent from N138.28 billion in 2017 to N228.39 billion in 2018. Profit before tax jumped by 499.4 per cent to N80.62 billion in 2018 compared with N13.45 billion recorded in 2017. However, with taxes of N35.75 billion paid in 2018 as against tax gain of N67.66 billion in 2017, profit after tax dropped to N44.87 billion in 2018 compared with N81.11 billion in 2017. Earnings per share thus dropped from N143.96 in 2017 to N79.04 in 2018.

    The board of the company has recommended a dividend per share of $0.05, the same payout for 2017 year.

    Chief Executive Officer< Seplat Petroleum Development Company Plc, Mr. Austin Avuru said the company has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation that provide it with an extremely solid foundation for growth in the coming years.

    He said the company’s core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that the company can confidently plan and invest long into the future to realise the full potential of those blocks.

    “As we continue to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board took the final investment decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for our gas business,” Avuru said.

    He noted that disciplined capital allocation continues to remain at the core of activities evidenced by continual deleveraging of debt levels to the current balance of $350 million.

    According to him, during the immediate past year, the company reinstated the dividend, increased capital investments and with the resources and headroom in its capital structure, it has been equipped to capitalise on organic and inorganic growth opportunities as they may arise.

    He said the company will, going forward, retain its price disciplined approach to only allocating capital to the highest cash returning organic and value accretive acquisition growth opportunities.

    He assured that with a robust dividend yield,  Seplat will become the investment of choice in Nigeria to access sub-Sahara Africa’s most prolific oil and gas opportunities.

     

     

  • Afrinvest posts positive outlook on Seplat

    Analysts at Afrinvest Securities Limited have said Seplat Petroleum Development Company Plc has the potential to deliver above-inflation high returns in the months ahead.

    In a review of upstream oil and gas industry, Afrinvest outlined positive outlook for Seplat, noting that the company’s growth history and industry outlook make it a desirable stock for investors.

    “We are positive about the company’s prospects going forward. Over our forecast period, we expect Seplat’s revenues and overall profitability to be impacted by three major factors over our forecast period: stable oil production and an improvement in uptime to an average of 80.0 per cent, the success of the company’s diversification in its export route and stability in oil prices above US$50.0/barrel and persistent improvement in gas production,” Afrinvest stated.

    According to the report, in valuing Seplat, analysts used a blended valuation of the dividend discount model, residual income model, net asset valuation, EV/EBITDA and forward P/E valuation models. The model assumes a sustainable growth rate of 2.0 per cent and produced a blended 12-month target price of $1.78 per share share. Similarly, analysts deployed the relative valuation methodology using EV/EBITDA and forward P/E to arrive at respective value prices of $2.22 and $1.86 per share. Analysts then consolidated the various methodologies to arrive at 12-month blended target price of $1.86 or N681.50, utilising the one-year futures foreign exchange rate of N366.24.

    “Consequent on the estimated target price and the current market price, the stock presents an upside potential of 28.3 per cent from current price of $1.45 as at January 29, 2019. Hence, we place a ‘BUY’ rating on Seplat,” Afrinvest said.

    The report noted that in Seplat’s first five years of operations between 2011 and 2015, revenue grew at a five-year CAGR of 5.0 per cent, despite deep contractions in revenue by 12.0 per cent and 26.4 per cent in 2014 and 2015 respectively. This came even as oil production rose by 3.3 per cent and 19.6 per cent respectively to 24,252 boepd and 29,003 boepd in 2014 and 2015 respectively. The decline was largely due to the abrupt fall in oil prices which began in second half of 2014 and extended into 2015. Revenues were also further impacted by lower production uptime due to third party operated infrastructure, Trans focados, being shut-in for significant periods of time.

    For the 2018 business year, Afrinvest’s revenue estimate of $757.3 million was based on the company’s nine-month report by September, 2018, which showed that the company’s production operations were stable. Analysts projected revenue between 2019 and 2022 to grow at a CAGR of 13.0 per cent to $828.33 million, before moderating to a 6.0 per cent decline in 2023.

    Seplat had emerged as the 2018 overall winner of PEARL Awards.

    Managing Director, Seplat Petroleum Development Company Plc, Mr Austin Avuru, said the company’s recognition at the PEARL awards and others was a clear testimony to the modest successes so far achieved by it, for which he thanked the staff and management.

    Seplat and the Nigerian National Petroleum Corporation (NNPC) had in August 2018 signed joint ownership agreement in a joint venture floated to process gas production from upstream assets.

    Seplat signed the shareholder agreement and share subscription agreement with the Nigerian Gas Processing and Transportation Company (NGPTC), a wholly owned subsidiary of NNPC.

    Under the deal, NGPTC will subscribe for 50 per cent of the shares in ANOH Gas Processing Company Limited (AGPC), a company that was incorporated in 2017, for the purpose of processing future wet gas production from the upstream unitised gas fields at OML 53 & OML 21, which is operated by Shell.

    The signed shareholder agreement will govern Seplat’s and NGPTC’s respective interests in the AGPC incorporated joint venture. Other commercial agreements with NNPC and the Nigerian Gas Marketing Company (NGMC) were also executed during the signing ceremony held at NNPC headquarters in Abuja yesterday.

     

  • SEPLAT inaugurates cottage hospital

    SEPLAT Petroleum Development Company Plc has inaugurated the renovated Oben Cottage Hospital in Oben, Edo State.

    The company also held the 2018 edition of its Safe Motherhood Programme, which aligns with the United Nations third Sustainable Development Goal (SDG 3), promoting good health and well-being.

    The theme of the programme is “Child Spacing”.

    The 28-bed hospital was part of assets acquired by Seplat following divestment by Shell in 2010 of its interests in OMLs 4, 38 & 41.

    The renovated hospital has the following amenities: Consulting Room, Maternity Ward, Male Ward, Female Ward, Laboratory, Heart-to-Heart Centre, Primary Healthcare Centre (PHC), Pharmacy, Theatre, Nurses’ Common Room, Labour Room, Records Unit, Outpatient Department (OPD) and Accounts Unit.

    The company’s Operations Director, Effiong Okon, led a team from Seplat to the event.

    Commissioner for Health, represented by Director of Hospital Services/Chief Executive, Edo State Hospital Management Board, Dr. Chris Obaseki, monarchs and chiefs from Benin, were present.

    Okon said:  ”The Safe Motherhood programme is one of Seplat’s core social responsibility, which we take very serious.

    ‘’In fact, our CEO, Austin Avuru, is always talking about giving back to the communities where we operate. That is why we take it very serious. We have been doing the programme for seven years. What we have done is just a tip of the iceberg. This relationship with the community is not a sprint relationship, it is a marathon relationship.

    ‘’We are committed to making a lot of investment in Oben in the next 10 to 30 years subject to the amount of gas reserves we have in the community.”

    Dr. Chioma Nwachuku, general manager, External Affairs and Communications, said the programme had been “impactful in the reduction of maternal and child mortality in the communities through the provision of safe delivery kits, insecticide treated nets, distribution of supplements and vitamins as well as the one-on-one consultations received by every pregnant woman who accesses the programme.”