Seplat Petroleum Development Company Plc, a leading Nigerian indigenous oil and gas firm, which is listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), has transformed into a full-fledged holding company with all its assets managed by its wholly-owned subsidiaries.
The indigenous oil giant has announced the completion of the transfer of the business activities, and assets of OMLs 4, 38 and 41 from the holding company to its wholly-owned subsidiary, Seplat West Limited, following regulatory and partner approvals with effect from January 1, 2020.
This was disclosed in a notification that was sent to the Nigerian Stock Exchange by the oil firm and signed by its Company Secretary/Chief Governance Compliance Officer, Mrs. Edith Onwuchekwa.
According to the notification, the Intra-Group transfer had been planned for some time, so it will not result in any change to the current business strategy for any of the assets, nor will it affect the way that the Seplat Group commercially operates. Therefore, the operatorship of these assets still remains with Seplat under the Joint Operating Agreement (‘JOA’), as the transfer to an affiliate of Seplat under the terms of the JOA is permitted.
The transfer of OMLs 4, 38 and 41 from Seplat Plc to Seplat West results in the creation of 7 wholly-owned subsidiaries namely: Newton Energy Limited, Seplat Petroleum Development Company UK Limited, Seplat East Onshore Limited, Seplat East Swamp Company Limited, Seplat Gas Company Limited, Eland Oil and Gas Limited and Seplat West Limited, with no operating oil and gas assets directly held in the holding company.
The company explains this new structure is consistent with its efforts to simplify its structure and designed towards segregating the businesses of the Group in a more efficient manner, thereby reducing risk, cost, and complexity. It is also expected to result in simplified management and reporting framework for the Group.
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It is also stressed in the notification that the outcome of the transfer will not, in any way, result in loss of tax revenue to the Government or extinguishment of liabilities. Similarly, it will not diminish shareholder value in (and returns from) Seplat as a listed company.
The transfer is not expected to impact the ratings of the Group, according to credit rating agencies, following the company’s discussions with them.