Seplat Petroleum Development Company Plc has announced plans to drill five new wells in its three production wells in Oil Mining Leases (OMLs) 4, 38 and 41, as part of the company’s efforts to sustain optimal production and strengthening its operations this year.
The 2018 targets by Seplat
- Two oil production wells in Ohaji South in OML 53 and one oil production well workover at Jisike and flow line installation, also in OML 53, are some of the wells to be drilled to enhance productivity.
- Installation of Non -Associated Gas (NAG) booster compression.
- Second condensate train at Oben.
- Upgrades to its Sapele gas plant.
- It has also set its capital expenditure (Capex) at $100 million.
- The Amukpe to Escravos pipeline is also expected to be commissioned and operational in Q3 2018. This will provide a third liquids export route for assets in OMLs 4, 38 & 41.
It recently successfully refinanced its existing US$300 million revolving credit facility due December 2018 with a new four year US$300 million revolving credit facility due June 2022 the proceeds will be used to repay and cancel existing indebtedness.
The Chief Executive Officer of Seplat Petroleum, Mr. Austin Avuru said
“With our capital structure reset and robust free cash flow generation underpinning the business we also have the headroom to capitalise on inorganic growth opportunities as and when they may arise, in line with our price disciplined approach,”
It also reached an out of court settlement between its wholly owned subsidiary Newton Energy Limited (“Newton”) and Crestar Natural Resources Limited (“Crestar”).
The settlement relates to proceedings in the English High Court in connection with the deposit of US$20.5 million currently held in an escrow account.
In its recently released Q1 2018 results show a strong quarterly performance with US$181 million in revenue and gross profit US$93 million (51% gross profit margin); EBITDA of US$116 million which was driven by higher total production and higher oil price realization of US$65.78/bbl; average gas price US$2.79/Mscf.
Also, Profit Before Tax for the period stood at US$59 million and Net profit stood at US$21 million.
What this means to shareholders
The company said it will return to drilling in the second half of the year and also re-focus its efforts on the numerous high-margin and short-cycle cash return opportunities in its portfolio. This will boost its bottom line and dividend to its shareholders
Seplat recently declared an interim dividend of US$0.05 (the United States Five Cents) per Ordinary Share of N0.50k each.
Seplat Petroleum Development Company Plc was incorporated on 17 June 2009 as a private limited liability company and re-registered as a public company on 3 October 2014.
The OML 4, OML 38 and OML 41 located in Nigeria with the total purchase price for these assets estimated at ₦104 billion (US$340 million) and paid at the completion of the acquisition on 31 July 2010 and a contingent payment of ₦10 billion (US$33 million) payable 30 days after the second anniversary, 31 July 2012.
The company is listed on both the Nigerian Stock Exchange and London Stock Exchange. Its share price s currently traded at ₦750 on the floor of the stock exchange, with a 76.47% one-year return and performance year to date of 19.7%.
