Seplat Energy PLC, a leading Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, Has announced its unaudited results for the three months ended 31 March 2024.
Operational highlights
Production averaged 49,258 boepd, down 4.8% on prior period (3M 2023: 51,720 boepd), but 5.7% above Q4 2023 production, and towards the upper end of 2024 guidance (44,000 boepd – 52,000 boepd).
ANOH gas plant pre-commissioning works is ongoing. Seplat has maintained its first gas target in 3Q 2024. Sibiri-1 is on stream a few weeks after FDP approval, work is ongoing to commence production from Sibiri-2.
Seplat has discovered hydrocarbons in previously untested deep reservoirs at Sapele-37 and Okporhuru-9. Carbon emissions intensity: 29.4 kg CO2/boe (3M 2023: 26.4 kg CO2/boe). End of Routine Flaring (“EORF”) projects are on track, with EORF expected in H2 2025, these will deliver a material reduction in emissions intensity.
The Company has achieved more than 2.3 million hours without Lost Time Injury (“LTI”) at Seplat-operated assets in Q1 2024.
Financial updates
Revenue $179.8 million, down from $331.0 million in 3M 2023 (after adjusting for underlift and overlift oil volumes, 3M 2024 adjusted revenues of $236.3 million, against $255.6 million in 3M 2023).
Average realised oil price $86.17/bbl (3M 2023: $82.32/bbl); average realised gas price $3.11/Mscf (3M 2023: $2.88/Mscf). And Unit production opex of $9.6/boe, (3M 2023: $9.0/boe).
Cash generated from operations of $16.8 million, primarily due to timing of liftings, $95 million received in April for volumes lifted in March, down from $145.0m in Q1 2023. Capex invested of $47.1 million (3M 2023: $44.7 million)
Balance sheet cash is down to $335.8 million (YE 2023: $450.1 million), $128 million MPNU cash deposit not included.
Net debt at end March increased to $385 million (Dec 2023: $305 million), a further $19.3 million of RBL borrowings were repaid in the quarter. Net Debt to EBITDA was 0.9x. Q1 2024 dividend declared of US3.0 cents per share.
Corporate updates
On 1st April 2024 Mr. Udoma Udo Udoma became Independent Non-Executive Chairman and Mr. Bello Rabiu became Senior Independent Non-Executive Director of the Seplat Energy Board.
1st May 2024 Mrs. Eleanor Adaralegbe will join the Board of Seplat as an Executive Director and will succeed Mr. Emeka Onwuka as Chief Financial Officer on 21st May 2024.
Our Full year guidance unchanged; Production 44,000-52,000 boepd, capex $170 million – $200 million.
Seplat is working with NNPC and government to conclude the acquisition of ExxonMobil’s share capital in Mobil Producing Nigeria Unlimited (“MPNU”). We remain confident that President Tinubu’s administration will approve the transaction.
Post-reporting period events
NMDPRA increased the domestic market gas price to $2.42/Mscf from $2.18/Mscf, effective 1 April 2024. New pricing will be applied to approximately 30% of gas volumes.
On April 14th, 2024, after approximately 2 years of outage, Zone-6 of SPDC operated Trans Niger Pipeline (“TNP”) resumed operations, four months ahead of management’s expectations.
“Seplat Energy continued its trend of strong operational performance in the first quarter. Oil production on OMLs 4, 38, 40 and 41 have outperformed expectations, benefitting from low pipeline losses and deferments, which were ahead of plan. Cash flow was down in the first quarter, but this is largely due to timing difference of lifting oil from the terminals. The business remains strong, production is firmly on track this year and price realisations remain supportive of cash generation.
In our FY 2023 results we outlined several growth opportunities for 2024. The first of these to start generating revenue for Seplat is Sibiri, which came on stream just a few weeks after the FDP approval was received from NUPRC. At Abiala (a marginal field within OML 40), the drilling programme is on track to start during 2Q.
We were delighted to see resumption of operations on the Trans Niger Pipeline in April, approximately four months ahead of plan. Access to the pipeline will enable us to increase production from OML53, as well as providing the primary export route for condensate from AGPC, which remains on track for first gas in 3Q 2024.
Looking further forward, we are pleased to share that we discovered hydrocarbons in deeper reservoirs than had previously been tested at Sapele-37 and Okhorpuru-9. The initial results are promising, again highlighting the world class quality of the geology in Nigeria.
In Nigeria, we were pleased to see more progressive actions taken by President Tinubu and the industry regulators. In March, the President signed executive orders that will provide fiscal incentives in our gas and midstream businesses. In addition, an executive order was signed and gazetted into law, which has potential to materially improve our contracting process and bring the right level of efficiency that will support costs reductions.
We applaud the change, which can drive much needed efficiency gains across our industry. More recently NMDPRA lifted the domestic gas price to $2.42/Mscf supporting revenue generation and re-emphasising the government’s commitment to develop Nigeria’s gas resources, a factor aligned with Pillar 2 in our strategy.
Our message to investors on MPNU is unchanged. Dialogue between key parties is active and constructive, and we remain confident that we can reach a conclusion on this transformational acquisition,” Roger Brown, Chief Executive Officer, said.
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