Seplat declares $29m interim dividend to shareholders in Q3

Seplat Petroleum Development Company Plc (SEPLAT), leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE), has announced its unaudited results for the nine months ended 30 September 2019 released to the NSE and LSE.

The company declared a $29million interim dividend to shareholders and highlighted that its recent £382m cash acquisition of Eland Oil and Gas Plc would create more value opportunities for shareholders going forward.

Working interest production averaged 47,163 boepd for the period (2018: 50,303 boepd) and reflects slippage to the intended production drilling programme as a result of rig mobilisation delays and availability. Four drilling rigs are now operating across Seplat’s portfolio to drive liquids working interest production to an expected exit rate of 30,000 bopd.Production uptime stood at 91per cent while average reconciliation losses for the first nine months stood at 13per cent. This factor for the third quarter only, stands at one per cent while the factor for the first six month period is still under review and expected to be consistent with prior periods when finalised.

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Full-year average working interest production guidance has consequently been revised downwards to 45,000 boepd to 48,000 boepd (from 49,000 boepd to 55,000 boepd), comprising 23,000 to 25,000 bopd liquids and 128 to 133 MMscfd gas.

The company’s nine months revenue of $495 million (2018: $568 million) reflects lower production and sales year-on-year together with lower price realisations of $64.22/bbl and $2.8/Mscf (2018: $71.14/bbl and $3.06/Mscf); gas tolling revenue of $67 million also recognised in relation to the processing of NPDC’s gas at the Seplat sole risk funded Oben gas plant 375 MMscfd expansion between June 2015 and end 2018

Gross profit of $265 million (2018: $306 million) represents a 54per cent gross profit margin; operating profit of $211 million (2018: $264 million) with $36 million recognised within Other Income (including a $31 million oil underlift position and $3 million income generated by third party usage of the Group’s Warri pipeline) and a $5 million net fair value gain offset by a $40 million impairment of NPDC receivables

Profit for the period of $185 million (2018: $91 million) positively impacted by a 37per cent year-on-year reduction in finance costs reflecting de-leveraging of the balance sheet early in the year when the outstanding balance on the 2022 RCF was ultimately reduced to zero

Cash generated from operations stood at US$306 million (2018: $386 million) versus Capex incurred of $64 million (2018: $29 million). Full-year 2019 capex spend expected to be around $120 million; gross debt of $350 million at 30 September consists solely of the 2023 senior notes with undrawn headroom of $225 million available through the 2022 RCF. Cash at bank at 30 September was $455 million resulting in a net cash position of US$105 million.

Commenting on the result, the Chief executive Officer, Seplat, Mr Austin Avuru, said, “2019 so far has seen us make significant progress towards furthering our ambitious growth strategy.

“Our core business remains highly cash generative and with four rigs now operational in the field we expect to quickly regain momentum. This is reflected in our decision to declare an interim dividend of $29 million.”