The Nation Newspaper

Tag: Seplat

  • SEPLAT sets minimum orders of N60m, N18m for $500m IPO

    •Eyes N330b capitalisation, N700 share price

    SEPLAT Petroleum Development Company Plc, an indigenous independent oil and gas company, has set a minimum order of between N18 million and N60 million for high networth individual and institutional investors as the upstream oil firm commenced the institutional book building for its global initial public offering (IPO) of $500 million.

    SEPLAT plans to make the maiden public sale of its ordinary shares and subsequently list its shares on the London Stock Exchange (LSE) and Nigerian Stock Exchange (NSE).

    The minimum order for individual investors is set at 25,000 shares, implying minimum investment of N13.375 million and N17.500 million at the indicative price range of N535 and N700 respectively. Also, the minimum order for institutional investors is set at 85,000 shares, which implies minimum application size of N45.475 million and N59.50 million at the bottom and ceiling prices.

    A document on the IPO obtained by The Nation indicated that the institutional book-building has commenced with the publication of the pathfinder prospectus. BNP Paribas and Standard Bank are the joint global coordinators for the IPO and book-runners. Standard Bank is also acting as the stabilising manager.

    Also, Renaissance Securities (Cyprus) Limited, Citigroup Global Markets Limited and RBC Capital Markets are acting as joint book-runners. On the home front, Renaissance Securities (Nigeria) Limited and Stanbic IBTC Capital Limited have been appointed as Nigerian joint issuing houses.

    According to the report, the indicative price range for the global offer has been set at 195 pence to 255 pence per ordinary share for shares to be traded on the LSE’s main market and N535 to N700 per ordinary share for shares to be listed on the NSE.

    The commitment form for the IPO indicated that the offer is targeted at high networth investors (HNIs) and qualified institutional investors (QIIs), with the least possible investment set at about N14 million.

    The initial offer size is expected to raise gross proceeds of approximately $500 million, equivalent to £300.9 million and N82.5 billion. With this, and based on the mid-point of the price range, SEPLAT’s implied market capitalisation upon listing would be about £1,200.9 million, equivalent to $ 1,995.5 million and N329.5 billion.

    The indicative price range of between N535 and N700 will make SEPLAT the second highest-priced stock at the Nigerian Stock Exchange (NSE), after Nestle Nigeria. The listing market capitalisation of N329.5 billion will make the company the seventh most capitalised stock on the NSE.

    SEPLAT has, however, indicated it intends to absorb over-subscription. According to the report, the over-allotment option in the global IPO shall represent 15 per cent of the final amount allocated to the international offering in the base offer. The over-allotment option shall be exercisable for a period of 30 calendar days from the announcement date of the final pricing of the global offer, expected on or about April 9, 2014.

    Thus, the global offer will comprise a base offering and an over-allotment option, consisting of new shares to be issued by the company.

    The report noted that the global offer will be effected variously by means of offering of ordinary shares to qualified investors in certain institutional investors in the United Kingdom and elsewhere outside the United States. Shares would also be offered to qualified international brokers in the United States. In Nigeria, shares will also be offered to ordinary shares to qualified institutional investors and high networth investors as defined in Rule 321 of the Securities and Exchange Commission (SEC) Rules.

    The company indicated that it intends to use $48 million from the net proceeds of the IPO to repay in full all outstanding amounts under its shareholder loan from MPI S.A. (MPI) while the balance would be used to acquire and develop new acquisitions or pay down any additional debt raised in connection therewith, of both onshore and shallow offshore acreages, assets or joint venture (JV) farm-ins.

    According to the company, the main source of acquisitions is expected to come from divestitures by various international oil firms.

    Upon listing, SEPLAT will thus be the first Nigerian company to have its ordinary shares listed on both the LSE and the NSE.

    The report indicated that announcement of the final pricing of the global offer and the commencement of conditional dealings in the ordinary shares on the LSE are expected to occur on or around Wednesday April 9, 2014 under the ticker symbol “SEPL”

    Also, admission of the ordinary shares to the official trading list of the NSE, under the ticker symbol “SEPLAT”, to the official list of the FCA and to trading on the main market for listed securities of the LSE and the commencement of unconditional dealings are expected to take place on or around Monday April 14, 2014.

    Earlier, Chairman, SEPLAT Petroleum Development Company Plc, Dr. ABC Orjiako, had said the global offer will allow the company to further implement its business strategy, which includes acquiring new assets.

    “We are confident that SEPLAT will continue to succeed and flourish as a leading Nigerian oil and gas operating company with a proven track record for delivering value to its investors, while fostering indigenous participation in the Nigerian oil and gas industry. We are committed to maintaining our track record and achieving our growth aspirations through sound corporate governance and best practice,” Orjiako said.

    SEPLAT was founded in 2009 by Shebah Petroleum Development Company Limited and Platform Petroleum (Joint Ventures) Limited for investing in oil and gas opportunities. Maurel& Prom, a French independent oil company, subsequently acquired a 45 per cent equity in SEPLAT; this interest was later spun-off to form Maurel & Prom Nigeria S.A, which is known as Maurel & Prom International.

    In July 2010, SEPLAT acquired a 45 per cent participating interest in, and was appointed operator of a portfolio of three onshore producing oil mining leases-OMLs 4, 38 and 41, which are located in the Niger Delta. In June, last year, the firm entered into an agreement for the acquisition of a 40 per cent participating interest in the Umuseti/Igbuku marginal field area located within OPL 283 in the Niger Delta.

    SEPLAT is regarded as one of the leading indigenous oil and gas operators in Nigeria with average gross operated oil production of 51,400 barrels per day (bpd) as at December 31, 2013, a substantial mileage from 13,900 bpd in August 2010.

    The company’s average gross gas production last year was 99 million standard cubic feet per day (MMscfd).

    SEPLAT is targeting gross operated oil production from its assets of 85 Mbpd by the end of 2016.

     

  • Seplat to boost domestic gas

    Seplat to boost domestic gas

    Seplat Petroleum Development Company Limited is putting measures in place to exploit gas resources from its assets to boost domestic gas use.

    The company’s Gas Project Manager, Obi Nwasike, who stated this in Lagos, said the company has advanced strategies to ensure increased production of gas, which would start to manifest within the next 12-18 months.

    Nwasike, who spoke with The Nation, said the company has developed projects that would deliver more gas for supply to the power industry and other domestic gas users. He said that there are companies developing power plants currently that will benefit from the gas supply.

    “In the next three years you will see growth in the delivery of gas to consumers and off-takers in the country, so it is a growth opportunity around power and around manufacturing in Nigeria,” he said. He added that there would be a significant increase in volume of gas supply.

    He said his company is positioned to guarantee that the gas assets keep producing for 20-30 years, which he said is the effective period of gas assets.

    Nwasike said the company is challenged to take these assets that have been there for 20-30 years and stretch them for another period of time, adding that the company would not only value the assets but would also look at what the off-take demand would be on oil and also on gas.

    He also pledged commitment to encourage adequate gas supply to power plants in the country. He added that the company has embarked on some projects to improve the quality of gas that is delivered to power plants.

    Nwasike identified the fiscal regime including taxation and government’s take from produced resource as some of the factors that militate against gas production in the country.

    He expressed fear that the Petroleum Industry Bill (PIB) if passed the way it is would deter companies from investing in gas production in the country. He urged the government to step down some of its demand to encourage investment in the sector develop the gas reserves and help generate more power.

    He said: “If there is uncertainty in the fiscal regime, people who have the money to invest will hold on until they are sure of what the new law says, the they will assess it and may go ahead to invest but generally many gas projects will not go ahead if the PIB is passed the way it is.

    Nwasike said the economy would be affected in the sense that the power plants may not be able to get the gas. “If as a country we have the money, we will invest it and develop our gas resources, but we don’t have the money and these people that have the money have told us that unless the bill is altered slightly they may not bring their money. Therefore, we may not witness any meaningful development in any of the sectors in the near future if the bill is not addressed to favour all stakeholders,” he added.