The company also declared a second quarter (Q2) 2023
dividend of US 3 cents per share, in line with a higher core annual dividend of
US 12 cents.
The energy company also grew its 2023 H1 gross profit to
N140.6 billion from N114.1 billion year-on-year. The Company, in its
announcement, described the operating performance for the period as solid,
given a 2 per cent increase in production, helped by reduced losses on its
Western Asset, which is benefitting from the availability of the
Amukpe-Escravos Pipeline and increased output from OML40.
Seplat Energy extended the Share Sale and Purchase Agreement
(SSPA) for the acquisition of ExxonMobil’s share capital of Mobil Producing
Nigeria Unlimited (MPNU) to preserve the transaction, pending the resolution of
certain legal proceedings and receipt of applicable regulatory approvals; and
will continue to work with all parties to achieve a successful outcome.
The full-year production guidance was retained at 45-55
kboepd whilst Capex guidance range at $160 – $190 million (previously $160 m)
to support the Group’s objectives for the year.
Following the Company’s previously announced Board
succession plan (25 April 2023), it announced that Eleanor Adaralegbe,
currently Vice-President Finance, has been appointed CFO-designate and will
succeed Emeka Onwuka as CFO in 2024.
Financial highlights
Revenues went up 3.8 percent to $547 million (including over
lift of $ 59.4 million), on improved production, offset by the lower oil price.
It also recorded cash generation of $259.1 million, funding capex of $88.8
million and improved shareholder returns.
Balance sheet remains strong, $381million cash at bank,
despite the impact of the devaluation of the Naira on USD cash balances, net
debt now at $380million ($128 million MPNU cash deposit not included), and further
$3.3 million received as part of the Ubima disposal, total proceeds up to $21.9
million. It recorded unit production opex of $9.6/boe.
Average oil price $79.54/bbl (6M 2022: $107.35/bbl); average
gas price $2.87/Mscf (6M 2022: $2.76/Mscf). The second quarter (Q2) 2023
dividend declared of US 3 cents per share is in line with a higher core annual
dividend of US 12 cents.
Operational highlights
Working interest production increased by 1.8 percent to
50,805 boepd, in the middle of our 45-55 kboepd guidance. Amukpe-Escravos
Pipeline (AEP) continued to provide alternative evacuation resulting in lower
downtime overall.
The company completed five new wells, boosting liquids
production at OML 40 and Island section of grouting operations on OB3 pipeline
complete. ANOH gas plant mechanical completion and partner-operated key project
milestones are expected by the end of 2023.
Seplat also achieved more than 4.2 million hours without
Lost Time Injury (LTI) at Seplat-operated assets and a carbon intensity figure
of 26.3 kg/boe. Sapele Power gas offtake is expected to commence in H2’23, this
is expected to reduce emissions by approximately 40 percent.
Corporate updates
Seplat extended the Share Sale and Purchase Agreement (SSPA)
for the acquisition of ExxonMobil’s share capital of Mobil Producing Nigeria
Unlimited (MPNU) to preserve the transaction, pending the resolution of certain
legal proceedings and receipt of applicable regulatory approvals. “We continue
to work with all parties to achieve a successful outcome,” it said.
Full-year production guidance retained at 45-55 kboepd
Seplat maintained a Capex guidance range at $160 – $190
million (previously $160 million) to support the Group’s objectives for the
year.
Following our previously announced Board succession plan (25
April 2023), we are pleased to announce that Eleanor Adaralegbe, currently VP
of Finance, has been appointed CFO-designate and will succeed Emeka Onwuka as
CFO in 2024.
Commenting on the results, Roger Brown, Chief Executive
Officer, Seplat Energy said: “Seplat Energy’s continuing strong performance
puts us on track for an excellent year that will support the increased
quarterly dividends we announced in April, and our balance sheet remains strong
despite the impact of the recent Naira devaluation. We are benefiting greatly from
the use of the new Amukpe-Escravos Pipeline, which has supported our robust
cash generation this year, and remain focused on improving operations, reducing
costs where possible and further derisking the business. We continue to
strengthen our Company in the knowledge that our efforts to improve governance
and sustainability are widely supported by Nigerian and international
investors.
“The distraction of frivolous legal actions is receding, and
we are focused on developing our assets and launching our joint venture ANOH
Gas Processing Plant, which will significantly boost our cash generation in the
coming years. We expect that this will enable us to fund additional investment
in Nigeria’s energy infrastructure and return higher dividends to shareholders.
“We remain confident that our proposed and transformational
acquisition of MPNU will be approved, enabling us to scale into a significant
energy supplier with diverse and productive assets that have the potential to
generate substantial benefits for Nigeria. We wholly align and support the
recent government efforts to make Nigeria a more attractive place to invest and
continue to focus on delivering affordable and reliable energy for Nigeria’s
young, entrepreneurial and rapidly growing population,” he said.
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