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Seplat Petroleum Development Company Plc has said it is looking at commencing its first gas flowing to customers before the end of first half (H1) of 2022 at a lower expected cost of up to $650 million.

This is even as the gas company recommended a final dividend of $0.05 per share ($0.10/share) for the full year of 2020, while adding that it remains committed to providing shared value for all of its stakeholders.

According to the company’s audited results for the financial year ended 31 December 2020, the company’s Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $265.8 million while its operating profit stood at $121 million (before non-cash impairments and unrealized fair value losses).

However, the company’s revenue dropped by 24 per cent to N190.9 billion in 2020 as against N214.2 billion recorded in the full year (FY) of 2019, gross profit fell by 68.5 per cent to N44.8 billion as against N121.5 billion in the preceding year while cash flow from operations declined to N118.6 billion.

Commenting on the results, Chief Executive Officer, Seplat, Roger Brown, said despite the year 2020 being challenged, the company once again showed its resilience and ability to overcome challenges and deliver production in line with guidance, operating with minimal incidences of COVID-19 cases.

Brown noted that from the $330 million of cash generated from operations, Seplat increased its capital investment, invested in ANOH and voluntarily paid down $100 million of debt, further deleveraging the balance sheet.

According to him, the company has continued to honour its commitment to shareholders on a regular income stream on their investment, by maintaining a total dividend of $0.10 per share for the year despite seeing the lowest oil prices in our 10-year history.

“Gas is the lower-carbon feedstock for affordable electricity for Nigeria’s young and rapidly-growing population. Seplat is leading Nigeria’s transition away from spending scarce foreign currency on imported, expensive, high-emission diesel-generated electricity and we believe this will provide the necessary base load for a functioning electricity grid that will allow renewable energy to take its place, as we see in the developed world, which in large parts is still fueled by coal.

Our flagship ANOH project, with the Nigerian Gas Company, is now fully funded and we have made excellent progress in difficult times, with major gas processing units expected to arrive in Nigeria in Q3 2021, installation to commence before the end of the year, mechanical completion and pre-commissioning in Q1 2022 and first gas flowing to customers before the end of H1 2022, at a lower expected cost of up to $650 million.”, he said.

On the outlook for the year, the Seplat boss, said it expects to produce an average of 48,000 – 55,000 bpd, taking into account the impact of OPEC+ quotas while adding that it will continue to hedge against oil price volatility and expect a higher proportion of revenues to come from long-term gas contracts at stable prices.

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