Seplat Energy PLC, a prominent Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, has emphasized the need for careful management of oil and gas assets in Nigeria to promote growth in the energy sector and facilitate expansion.

During the Centre for Petroleum Information (CPI) Petroleum Policy Roundtable (PPR XXIV) in Lagos, the Chief Executive Officer, Mr. Roger Brown, delivered a Keynote speech titled: ‘Managing inherited Assets: Rising to the Challenge’. The event, themed ‘Sustainably Powering forward the Nigerian Petroleum Industry – As IOCs back pedal’, was attended by oil and gas operators, service providers, government officials, industry watchers, and advisors.

Brown stressed the importance of ensuring cash generation while driving growth and development of inherited oil/gas assets.

He cited Seplat Energy's 14-year experience in managing inherited assets, highlighting the company's success in increasing production across its portfolio of acquired assets, which has contributed to its position as Nigeria’s leading independent energy supplier.

Brown said: “At Seplat Energy, 2P reserves rose 9 per cent Year-on-Year to 478 MMboe with a 47 per cent:53 per cent split between liquids and gas. The increase in reserves was due to discovery of new reservoirs in OML 40, booking of volumes from the Abiala marginal field, and conversion of 2C resources to 2P in OML 53 2P + 2C reserves and resources 540 Mmboe at end 2023.

“Post-IPO (Initial Public Offer) , our investment in gas infrastructure has yielded fruits with oil and gas production mix now at 59 per cent and 41 per cent respectively (at the end of Full-Year 2023) from 83 per cent and 17 per cent pre-IPO. Investments in alternative evacuation routes have helped to stabilise production at >44.0 kboepd. Aggregate production has grown at a CAGR (Compound Annual Growth rate) of 5.4 per cent post-IPO”.

The Seplat Energy CEO added: “Tax contribution to Nigeria stands at $2bn (Royalties, PPT, PAYE, NCD. $2.8bn total since company incorporation); $1.6bn capex invested in Nigeria ($2bn total since company incorporation); $535m total IPO raised (all at IPO); $575m total dividends paid (total of $616m including $41m pre-IPO dividends). Clearly, strong cash generation from prudent management of our assets has supported growth and expansion”.

Seplat Energy business has continued to generate strong cashflows reflected in its strong FCF (Free Cash Flow) and NCFO (Net Cash from Operations) generation. Post-IPO, the company generated $1.7bn in FCF. Excluding 2014 and 2015 where it made significant capex investments post-IPO, the company has generated an average annual FCF of $264m.

Brown emphasized the importance of oil and gas asset inheritors upholding a positive reputation with creditors, highlighting the necessity of doing so.  “Seplat Energy continues to maintain a strong reputation in the debt market. The confidence investors have in our ability to pay back debt is reflected in the $2.6bn debt repayment we have made since 2014, excluding interest payments.”

The CEO of Seplat Energy emphasized the importance of robust collaboration between operators and their communities, highlighting that establishing a close working relationship with host communities is crucial for the future prosperity of acquired assets. “As a matter of importance, the communities where you operate should grow as the company grows; as well as the nation at large,” he added.