Seplat Petroleum Development Company (SPDC) yesterday held its facts behind the figures session at the Nigerian Stock Exchange (NSE).
Facts behind the figures provide an avenue for the management of a company to brief the investing public on its activities.
Chief Executive Officer (CEO) of the firm Austin Avuru and Chief Financial Officer (CFO) Roger Brown made presentations at the event.
Nairametrics was at the event and recorded some of these as key highlights
The current state of affairs
- Average working production capacity for Q1 2018 stood at 53,604 boepd. Crude oil production comprised 27,306bopd.
- Seplat has a working guidance of 48,000-55,000 boepd from the four oil blocs it has production interest namely OMLs 4, 38, 41 and 53.
- OMLs 38 and 41 are its biggest assets. It has a financial interest in OML 55.
- While responding to a question by Nona Awoh, Avuru was optimistic that the Amukpe-Sapele pipeline should be completed within the third quarter of the year, despite experiencing slight delays. Seplat is co-financing the project.
- On completion, that would be the primary means of evacuating crude oil. The Forcados pipeline would be the 2nd option, and the Warri route the 3rd option for evacuating crude oil.
- OML 53 is the newest asset for the company. The firm plans to step up production in the second half of the year, moving from its current level of 3000 to 12000 barrels per day to 20,000 barrels by next year.
- It also intends to increase gas production from this asset by the year 2020, as it has lots of potentials. Two evacuation routes planned
Avuru stated that the company had decided to maintain a core dividend floor and a top up as was discussed during its last Annual General Meeting (AGM).
- Avuru, while responding to a question from Emeka Okolo of Multi trust securities stated that Seplat has no plans to go into refining.
- The company would, however, be willing to invest in a refinery close to its area of operation, if it would enhance its evacuation of crude oil.
- The company had some receivables in respect of gas, as the power sector was not liquid enough to provide an immediate settlement.
- Gas receipts are in Naira, while bills are in dollars. Seplat was however able to settle some of those bills with its crude oil revenue which is in dollars and Naira it uses for its operations.
- The Sapele gas plant would be upgraded to a higher capacity by next year. The company currently has excess capacity for gas processing, and gas plants are fairly easy to expand.
- Avuru stated that the firm was positioned for growth between now and 2019, both organic and inorganic.
- Seplat would be wiling to buy secondary assets if the economics add up. The financial restructuring it had embarked on, would enable the company have ready funds in the events of any assets being available.
Corporate Social Responsibility (CSR)
- Avuru also disclosed that the company was quite active in terms of Corporate Social Responsibility (CSR). Communities nominate projects to be spent on.
- Tenders are made in a transparent manner, similar to Seplat’s own operations. Contractors hired from within the community also deliver.
- In addition, the firm also provides healthcare programmes annually, as well as its scholarship scheme. Militants were being built to being contractors.
- A fall out of its CSR policy was that the company has had no disruption in its operations since inception.
Oil Price Outlook
- In response to a question by Nairametrics on his outlook for oil and gas prices for the rest of the year,
- Avuru noted that it would be difficult to give an outlook, but on a long-term basis, crude oil prices tend to trade within the $60-70$ range.
Capital expenditure and exploration costs could be scaled back if need be, but operation expenditure has some element of fixed costs.