Seplat's gross profit hits N197.2bn ..... declares 15 cents per share dividend

Seplat's Chief Executive officer,  Brown 

By Akinola  Ajibade

Seplat Energy Plc, has recorded a rise in profit before tax of N86.7 billion from N71billion in its audited results for the full year ended in 31 December 2022. 

This happens, as the company generated cash from its operations to the tune of N242.4bn from N150.9bn year-on-year, rising by 51.6 per cent.

The firm with listing in the Nigerian and London Stock Exchanges, also  grew its revenue by 29.8 per cent to N403.9bn from N293.6bn year-on-year; as its gross profit soars to N197.2bn from N114.2bn year-on-year, rising by 63 per cent.

By this, Seplat Energy is paying a US7.5 cent final dividend, despite the significantly disrupted production experienced in the second half of the year. This amounts to a full-year dividend of US15 cents, representing a dividend yield of around 11 per cent at the current LSE share price.

In its operations, Seplat Energy’s working interest production averaged 44 kboepd, impacted by outages of key infrastructure predominantly in Q3. Use of Amukpe-Escravos Pipeline (AEP) enables high uptime in December, exit rate of 53 kboepd. 

According to the Seplat's  operational highlights released to the News Mirror recently, the company has among others, working  working interest production averaged 44 kboepd, impacted by outages of key infrastructure predominantly in Q3, used Amukpe-Escravos Pipeline (AEP) enables high uptime in December, exit rate of 53 kboepd, completed 13 wells including two wells for the ANOH gas processing plant, ANOH Gas Processing Plant 95% mechanically complete, awaiting third-party infrastructure completion.

Others include safety culture  maintained, one LTI recorded in October, LTIF for the full year, revenues of $951.8 million, up 29.8 per cent, adjusted EBITDA $416.9 million, up 12.1 per cent, generation of full year cash of $571.2million against capex of $163.3million and $140.3million transaction deposits, strong  balance sheet with $404.3 million cash at bank, net debt of $365.9 million, full  year production cost of $10.3/boe, 2022 Ubima divestment receipts were $18.6 million out of $55.0 million (additional $0.9million received in Jan 2023) and several others 

The company while giving its corporate updates, said, it continues to pursue approvals for acquisition of entire share capital of Mobil Producing Nigerian Unlimited ( MPNU)

▪ Finalised New Energy investment plan, identified near term opportunities for consideration and FID late 2023

▪ Commenced implementation of roadmap to achieving net zero by 2050

▪ Provisional applications for voluntary conversion of operated Oil Mining Leases under Petroleum Industry Act

▪ Work on-going to spin out Midstream Gas business in line with PIA provisions

▪ First Climate Risk and Resilience Report to be published at end of March 2023 under TCFD guidelines

▪ Carbon intensity of production figure published: 23.9Kg/boe

On the outlook of the company for 2023, it stated that full year production guidance of 45-55 kboepd (excluding ANOH), capex expected to be $160 million..

Commenting on the results, Seplat's Chief Executive Officer, Roger Brown said: “I am delighted that our strong financial performance will enable the payment of a US7.5 cent final dividend, despite the significantly disrupted production we experienced in the second half of the year. The full-year dividend of US15 cents represents a dividend yield of around 11% at the current LSE share price.

Adding that: As Seplat enter 2023, its  business is in a very healthy state, with new wells coming onstream, encouraging appraisal drilling underway at Sibiri, and alternative export routes ensuring good export performance in January and February this year. Our gas business continues to develop, with first gas expected from ANOH in Q4 this year, and we are now in the process of separating our Midstream Gas business from the Upstream unit to unlock new value for shareholders.

We are continuing to pursue the Presidential approval received on the 8 August 2022 for the MPNU acquisition and we remain focused on concluding the transaction within the remaining term of President Buhari before a new president is sworn into office at the end of May 2023.

We are implementing our roadmap to net zero and have made encouraging progress with a 35% reduction in emission intensity last year. The major reduction in carbon emissions is routine flaring which we are on target to eliminate by the end of 2024. Alongside these efforts, and as part of our stated strategy to become Nigeria’s energy champion across the entire value chain, we are planning to invest in gas-to-power and solar power projects with FID targeted for later this year if the projected returns meet our internal hurdle rates.