Seplat Petroleum Development Company Plc a leading Nigerian indigenous oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, announced its consolidated half-yearly financial results for the period ended 30 June 2018 and provides an operational update. Information contained within this release is un-audited and is subject to further review.
Gross profit margin of 51% for H1 2018 (up from 41% in H1 2017) driven by higher production, firmer oil prices and lower unit production opex which stood at US$4.50/boe (down from US$5.85/boe in H1 2017)
H1 2018 profit before tax stood at US$121 million (H1 2017 loss before tax US$26 million); Profit after tax (but before deferred tax) of US$105 million; net profit for the period of US$49 million.
Cash at bank at 30 June 2018 US$510 million; gross debt US$550 million and net debt US$40 million with US$100 million un- drawn headroom on the four year revolving credit facility
Net cash flow from operations in H1 2018 stood at US$245 million against capex of US$21 million; FY 2018 capex guidance of US$100 million reiterated as field development activities step up in H2 2018
Overall working interest production in H1 across all blocks stood at 25,286 bopd and 155 MMscfd, or 51,099 boepd. Production uptime stood at 76% in the first half and reconciliation losses around 8%. FY 2018 guidance reiterated at 24,000 to 29,000 bopd and 148 to 158 MMscfd (or 48,000 to 55,000 boepd) Increasing revenue contribution from the gas business.
Gas revenues of US$85 million in H1 2018 (25% of total revenues in the period and up 57% year-on-year).
Continued to supply commissioning gas to the Azura IPP. Upon commissioning, expected in Q3, deliveries will move to the contracted level of 116 MMscfd gross on take-or-pay terms.
Actively engaged with counterparties to finalise new GSA’s – plan to take gross production towards 400 MMscfd
Proceeding towards FID at the ANOH gas and condensate development at OML 53. Expect FID in Q4 2018
Confirmation of approval was received from the Department of Petroleum Resources (DPR) for renewal of licenses on OML’s 4, 38 and 41 for a period of 20 years. The license renewal is still subject to final consent of the Minister of Petroleum Resources.
Two jetties at the Warri refinery provide a back-up option that can allow for sustained exports of 30,000 bopd gross if required in the future.
Completion of the 160,000 bopd Amukpe to Escravos pipeline is progressing slower than anticipated. Consequently, Seplat has adjusted its own expectation of completion to Q4 2018.
Commenting on the results Austin Avuru, Seplat’s Chief Executive Officer, said: “The results today continue to demonstrate our ability to generate cashflow and profitability from our assets and we are on track to deliver our 2018 production guidance in both oil and gas, with gas now contributing a significant portion to the bottom line. Post refinancing in Q1 this year, we have continued to strengthen the balance sheet with a quarter on quarter reduction in net debt to low levels at the end of H1 2018.
The second half of this year will see us accelerate field development activities across the existing portfolio as we start to drill the first wells on our OML 53 asset. Due to slower than expected progress we have revised the timeline for delivery of the Amukpe to Escravos pipeline and FID at the ANOH gas condensate project to later in the year. The fundamentals of the underlying business remain very strong as we continue to focus on delivering on our promises.”