- Seplat reported Q4 and FY2014 results today. Both volumes and revenues were in line with expectations, at 30.8kboepd, and US$775m respectively. FY 2014 revenues fell 12% y/y due to oil prices halving in H2 14, and a US$82m payment related to historical volumes sold in 2013 to Royal Dutch Shell but not recognised, and the impact of higher downtime on the Trans Forcados Pipeline (TFP), which was down for 75 days, some 43 days more than originally planned.
- We have lowered our TP marginally from N771/share to N756/share to reflect higher operational risk on the TFP, and a slightly lower production evolution at OML 4, 38, and 41, being offset by recent acquisitions at OML53/55.
- Given the revised capital structure in place we would not rule out further inorganic acquisitions given the fact the company admitted during today’s analyst call it ‘remained interested’ in Afren (Rec: Sell, Price 3p, TP 0p) assets. Buy maintained.
- Source: CSL Stockbrokers
