Seplat Returns To Profitability With $24.86m Profit In Q1 2021
Seplat Petroleum Development Company Plc has reversed ts previous year’s decline by declaring a profit of $24.86 million, rising up from the $100.551 million loss it recorded in Q1 2020.
According to its unaudited results for the three months ended 31 March 2021, figures from the Q1 2021 financials show that it adopted a quarterly dividend policy of US2.5 cents per share, whilst recording a rise in revenue by 16.8 percent to $152.4 million with increased operational efficiencies and a further reduction in costs.
Seplat maintained a strong cash position of $236.3 million in Q1 2021, with an EBITDA position of $77.8 million.
Commenting on the results, which were released to the NSE and LSE last Thursday, Roger Brown, the Chief Executive Officer of the Company, said: “We have made a progressive start to the year, delivering oil and gas production volumes of 48,239 boepd, within our guidance range.
With the Gbetiokun field at OML40 now back in production, we are currently achieving average daily volumes of nearly 54 boepd so far in April and we will build on this as we add additional oil and gas wells this year.
“Our flagship ANOH gas project is proceeding as planned and was fully funded in February when our joint venture company, AGPC successfully raised $260 million of debt financing. In addition, the success of our $650 million Eurobond issuance in March demonstrates investor confidence in our prudent financial management and the exciting future ahead for the Company and its stakeholders.”
The Seplat CEO further explained: “As we drive forward our strategy of being a low-cost energy provider delivering reliable, affordable and sustainable energy to the young, fast-growing population of Nigeria, energy transition – which delivers on Nigeria’s social development goals in tandem with the climate agenda – is essential.”
According to him: “This is the backbone of Seplat’s strategy and we will be communicating how we plan to achieve this over the coming months. To that end, the Board took the decision to change our name to Seplat Energy PLC, which more adequately reflects our ambitions of providing a broader energy mix. We will present the name change to our shareholders for approval at the AGM on 20 May 2021.”
Working-interest oil and production within guidance at 48,239 boepd and Average daily volumes of nearly 54,000 boepd achieved in first 21 days of April. The report shows that Liquids production is at 28,541 bopd in Q1 2021, with a Gas production of 114 MMscfd (19,698 boepd) and Low unit cost of production of $8.70/Boe.
It added that Oben-50 gas well is now producing, Oben-51 drilled and completed with gas expected to flow in May and Safety record extended to more than 17 million hours without LTI on Seplat-operated assets Financial:
It also added that the board adopted quarterly dividend policy; declares Q1 2021 dividend of US2.5 cents per share and revenue up 16.8 percent to $152.4million and EBITDA of $77.8 million Cash at bank $236.3 million, net debt of $458.1 million.
The company also disclosed a successful issue of $650 million 7.75 percent senior notes to redeem existing $350 million 9.25 percent senior notes and repay $250 million drawn on $350million RCF, Refinanced $100 million Westport RBL facility, and total capital expenditure of $32.6 million
Seplat also announced that it was seeking shareholder approval at the AGM on 20 May 2021 to change its name to Seplat Energy Plc to reflect the evolving strategy ANOH project now fully funded following successful $260 million debt issue and plans to host Capital Markets Day on 29 July 2021
On its Outlook for 2021, Seplat is to maintain expected production unchanged at 48-55 kboepd for the full year, subject to market conditions Capex guidance unchanged, expected to be $150 million for the full year and 5.0MMbbls hedged at $35-$45/bbl from Q2 to Q4 2021
“For 2021 we expect to produce an average of 48,000 – 55,000 boepd, taking into account the impact of OPEC+ quotas. We continue to hedge against oil price volatility and expect a higher proportion of revenues to come from long-term gas contracts at stable prices.
“We have significant cash resources and will continue to manage our finances prudently in 2021, expecting to invest $150 million of capital expenditure across the full year, with nearly $33million already invested. We remain confident that our ongoing cost-cutting initiatives and prudent management of cash will enable further reductions in debt, whilst supporting dividend payments and investment for growth.
“Following its successful funding, the completion of the ANOH project remains a major priority. Although we expect some COVID-19 related delays to push completion into early 2022, following a cost optimisation programme we now expect the project to cost no more than $650 million, substantially below the $700 million budget previously stated at Final Investment Decision.”
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