The shareholders of Seplat Petroleum Development Company Plc have approved the change of name of the company to Seplat Energy Plc, in line with the company’s transition into a full energy solutions company.
At the annual general meeting in Lagos, which combined physical presence and virtual streaming to the global audience, the shareholders approved resolutions for the change of name, payment of dividends and corporate share buyback among other businesses.
Chairman, Seplat, Dr. Ambrosie Orjiako, said it was the responsibility of the board to plan for the long-term sustainability of the company, as scenario analyses on Seplat’s assets have been conducted under different climate change and demand scenarios.
According to him, Seplat looks forward to a future in which it is much more involved in promoting low carbon environment in its operations, hence the adoption of the new name, Seplat Energy, as its new name.
He noted that while such a transition will involve significant new innovations, technology, skills and relationships, compared to the company’s existing expertise of subsurface exploration, drilling and hydrocarbon processing, it is determined to be a major part of Nigeria’s future energy mix and help drive the country towards more sustainable energy generation.
“Our ANOH Gas Processing Plant will be a major step forward in Nigeria’s drive to reduce carbon emissions, replacing potentially millions of small-scale, inefficient, and polluting generators with cleaner utility-scale power generation fired by natural gas from Nigeria.
In addition, we intend to increase our disclosure of environmental, social and governance (ESG) data, by adopting the recommendations of the Task Force on Climate-related Financial Disclosures and will commit to reporting CO2 emission data to the Carbon Disclosure Project in the near future.
“Helping our communities Part of our ESG commitment is already apparent in the long-term projects we implement in our host communities. As the Covid-19 pandemic struck Nigeria, it was our duty to help our host communities and States in whatever ways we could,” Orjiako said.
He pointed out that the company’s cash position remained strong in 2020 and the $318 million of cash it generated from operations was significantly more than the $150 million invested for future growth.
According to him, the company’s capital expenditure in 2020 was higher than the $125 million spent in 2019, which demonstrated the company’s commitment to growth; as it voluntarily repaid $100 million of its revolving credit facility and ended the year with $225 million in cash and net debt of $440 million.
He outlined that the company’s average working interest production was 51,183boepd, including 33,714bopd of liquids and 101MMscfd gas, 17,469 boepd.
“Of this, our Eland assets contributed 8,855bopd, or 26 per cent of total liquid volumes. Our financial performance enabled us to maintain our commitment to paying dividends. While other companies were cutting back or cancelling payments for the 2019 financial year, because of prevailing uncertainties, we honoured our commitment and paid a final dividend of US$0.05, for a total dividend of US$0.10 for 2019.
“In October 2020, we announced an interim dividend of US$0.05 and the Board has since approved an additional top-up of US$0.05, maintaining our US$0.10 dividend for the 2020 financial year. Since we raised $535 million at our initial public offering in May 2014, we have returned $344 million to shareholders in the form of dividends.
“The strengthening of our board is part of our ongoing desire to achieve world-class governance of our company. Six of our 13-member board are independent and we continue to work towards increasing diversity. In addition, as we announced in March, we have taken the bold decision to eliminate all related-party transactions – a move that exceeds the requirements of the UK Code of Corporate Governance,” Orjiako said.
Chief Executive Officer, Seplat, Roger Brown said there is pressure to reduce oil extraction and the carbon emissions it creates; although this depended on the rest of the world adopting less oil-intensive ways to travel and generate power.
He explained that Nigeria’s per-capita energy consumption and carbon emissions are actually very low, and its national electricity grid is still very poorly developed, thus the country is still reliant on small-scale diesel generation to satisfy its energy needs and this is the problem we need to address most urgently.
According to him, it is important to recognise that Nigeria is a developing country with low access to energy and a rapidly growing young population. Hydrocarbons are the country’s main resource and provide significant help for its economy. The proceeds from the oil industry fund a wide range of Sustainable Development Goals (SDGs) and are crucial to the country’s societal development.
“Nigeria needs to achieve significant growth in its capacity to deliver education and health services, food production and energy security. Without the development of its indigenous oil and gas industry these goals will become very difficult to achieve and so in Nigeria, the industry remains not just relevant but essential,” Brown said.
He outlined that Seplat is embracing climate change opportunities on two fronts, firstly by continuing to invest heavily in expanding its domestic gas business in line with the government’s strategy to achieve universal access to electricity, and to make that energy cheaper and cleaner by replacing diesel generation, which is very damaging to the environment and the economy.
He added that gas is clearly the next step for Nigeria and Seplat has taken a leading position domestically with the Nigerian government declaring the ANOH project as one of the seven critical gas development projects for the country.
Chief Financial Officer, Seplat, Emeka Onwuka, said the company’s robust financial performance in 2020 demonstrated the importance of a prudent approach to managing its finances, focusing on capital allocation, revenue diversification, cost control, hedging and debt management.
He added that despite a challenging year, the company repaid $100 million debt, invested $150 million for growth and maintained its dividend at $0.10 per share for the year.