Feature
SEPLAT: A Decade Of Growth, Stability
Celebrating 10 years of listing on the Nigerian Exchange (NGX) and London Stock Exchange (LSE), Seplat Energy Plc has continued to deliver on its commitment for continuous shareholder value creation and retention of its position as market leader in its core business.
The company, an indigenous business with international profile, is differentiated through strong management and strategic development which are demonstrated in its financial strength and flexibility; production capability; and portfolio diversity.
Seplat Energy is underpinned by a high-quality asset base and has invested to consistently grow oil production and capacity. Also, the company has prioritised the commercialisation and development of the substantial gas reserves and resources identified at its blocks, positioning Seplat today as a leading supplier of processed natural gas to the domestic market in Nigeria that will help increase Nigeria’s power generation capacity and industrial output.
Its gas business is making an increasingly important financial contribution for Seplat Energy with gas prices de-risked from the volatility of the oil price.
Seplat Energy’s Performance In 10 Years
Also, the Company’s success story is driven by operational excellence, strong partnerships and credibility in international capital markets. Eight onshore blocks in the Niger Delta, ideally located for oil exports and internal gas demand centres.
The Company has high standards of governance, only Nigerian energy company dual-listed on NGX Premium Board and LSE Main Market. It has over 500 direct staff. Hundreds more jobs are supported indirectly in communities and the supply chain.
For 2023, 47,785 BOEPD Working Interest Production (Liquid 59 per cent, Gas 41 per cent); 478 MMBOE Working Interest Reserves (Liquid 47 per cent, Gas 53 per cent).
Seplat Energy has been profitable and cash generative. As at December 31, 2023, the Company recorded over $1 billion revenue. Seplat Energy supports the goals of the Paris Agreement and is committed to eliminating routine flaring by 2025, five years ahead of the regulatory target, at Seplat-operated assets.
The Company is a leading supplier of gas to Nigeria’s domestic gas-to-power market as its gas powered 25-30 per cent of Nigeria’s domestic grid.
Also, the Company has a robust balance sheet with over $800 million available liquidity and credible access to global capital markets. Seplat Energy is strong on its commitment to community development, investing over $57 million in community projects focused on healthcare, education and empowerment.
Seplat Energy’s Dual Listing On Nigerian And London Stock Exchanges, And Progress Made
Speaking on the Company dual listing on both the Nigerian Exchange and London Stock Exchange, the chief executive officer of Seplat Energy Plc, Mr. Roger Brown stated that the Company listed on both Exchanges in April 2014.
He noted that the Company has achieved local and international accountability, by complying with industry recognised best practice and standards, whilst strictly adhering to international and local laws and regulations; and ensuring experienced and skilled leadership, Board accountability, high standards of corporate governance and Consistent delivery of targets.
According to Roger, the Company has been able to maintain a strong cash position and good liquidity management; environmental commitment and social commitment.
He added that the dual listing has enabled Seplat Energy to increase its access to capital whilst its shares have become more liquid, explaining “post-IPO, we generated $1.7 billion in FCF. Excluding 2014 and 2015 where we made significant capex investments. Post-IPO, we have generated an averageannual FCF of $264 million.
“Bolstered our brand visibility, credibility and reputation. Today, Seplat Energy is a strong voice and a thought leader in the African energy landscape. Diversified Seplat Energy investor base, enhancing relationships with current and potential investors across the world, risk mitigation, and currency flexibility.
The CFO-Designate, Seplat Energy, Mrs. Eleanor Adaralegbe stated that the Company has maintained consistent production and reserves growth with 2023 gross production averaged 106 kboepd; 2P reserves CAGR since inception of 13 per cent; 2023 Reserves Replacement Ratio of 292 per cent; and Diversified evacuation routes.
She added that Seplat Energy completed major acquisitions since 2014, unlocking upside value: Current portfolio includes seven onshore blocks; Acquired Chevron’s OML 53, transferred in 2016 (resulted in development of the ANOH Gas plant); Acquired Eland in 2019; and Signed SPA with Exxon for MPNU in Feb 2022.
Speaking on shareholders’ value, Adaralegbe pointed out that $575 million returned to shareholders from IPO to 2023, equivalent to 107 per cent of $535 million IPO proceeds, saying that “core dividend increased 20 per cent in 2023 to US$12cent per share. Special dividends paid in 2022 ($5cent per share) and 2023 ($3cent per share).”
According to her, despite our aggressive capex investments and acquisitions, we continue to have adequate cash flow to pay our shareholders best-in-class dividend. With $575 million paid as dividends since our IPO in 2014, we have successfully returned all the capital we raised at IPO. Dividend paid in nine out of the past 10 years due to unavailability of infrastructure, not oil price, main reason for reduced dividend in 2016 and 2017 (Forcados offline for 16 months).
Host Community Development
Seplat Energy is known to drive positive socio-economic benefits for its country and host communities. Seplat CFO-Designate stated that “the Company is making an enduring difference to communities where we operate and Nigeria; approximately $57.2 million invested over 10 years in community projects focused on healthcare, education, infrastructure and empowerment to date (Eye Can See, Safe Motherhood, Pearls Quiz, Scholarship, Teachers Empowerment programmes, road construction, hospitals, skills empowerment, and entrepreneurship programmes).
“Seplat Energy has made a $2.8 billion contribution to the Federal Government of Nigeria over the past 13 years, $2.0 billion since IPO, $1.54 billion on Royalty till date, $329 million on Petroleum Profits Tax, $273 million on Value Added Tax, $259 million on Withholding Tax, $126 million on PAYE, $276 million on NDDC and others.”
Potentials Of Seplat Energy
The Nigerian economy is currently undergoing major energy transitions. Gas resources and products (LNG, CNG & LPG) will play key roles. The Nigerian domestic market is deep enough to absorb whatever Seplat Energy can come up with from its Gas Production plant, ANOH Gas Plant. Aside from contracts for supplying the gas required for firing the electricity generators, there is increased potential for CNG infusion into the transportation systems as well as LPG for domestic use by the ever-increasing population of about 250 million people, as well as in regional markets of the ECOWAS. Incidentally, this increased demand for gas coincides with the Seplat Energy programme for reduction in gas flaring.
Another potential for the company is to consummate the development of 13 additional wells already identified as priorities for 2024. This will greatly improve on its daily production output and revenue potentials as the world market prices appear to be rallying now.
Outlook For Seplat
As can be gleaned from the foregoing, Seplat Energy promised to be a veritable vehicle for investment for discerning corporate and individual investors who desire continual growth in their equity values as well as sustained and predictable returns in dividends. The growth opportunities in its operational trajectory ensure it will continue to seek both debt and equity finance from the stock markets.
Seplat was formed in June 2009 through the partnership of Shebah Petroleum Development Company Limited and Platform Petroleum Joint Ventures Limited to specifically pursue upstream oil and gas opportunities in Nigeria, and in particular, divestment opportunities arising out of the incumbent Major IOC’s portfolios.
