Seplat Energy concludes $800m ExxonMobil acquisition

• Eyes $1.45bn revenue with ambitious 148% production growth

Seplat Energy Plc, a leading indigenous energy company listed on both the Nigerian and London Stock Exchanges, has completed its acquisition of Mobil Producing Nigeria Unlimited (“MPNU”) from ExxonMobil . 

The transaction, which has received approval from the federal government, is set to elevate Seplat Energy’s standing in the Nigerian energy landscape,  more than doubling production and positioning the Company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.

Seplat Energy Plc disclosed that the final cash consideration for the acquisition of Mobil Producing Nigeria Unlimited, payable to ExxonMobil at closing, amounts to $672 million. It was further revealed that in 2022, a deposit of $128 million was paid upon the signing of the first Share Purchase Agreement. The total consideration at closing, therefore, stands at $800 million, a figure that will not necessitate any new equity issuance by Seplat Energy.

Seplat Energy Plc further disclosed that an additional sum of $257.5 million, associated with Decommissioning and Abandonment, as well as certain Joint Venture (‘JV’) costs, will be deferred to December 2025.

This amount, the company stated, will be partially offset by JV cash calls. It was also disclosed that the after-tax impact of this component on MPNU is projected to be in the range of $25-35 million.

With the integration of these assets, Seplat’s proven and probable (2P) reserves are projected to increase by 86 percent to 887 million barrels of oil equivalent (MMboe). Moreover, the acquisition is anticipated to raise the company’s production levels by 148 percent.

Seplat Energy Plc’s financial outlook is set to soar following the acquisition of MPNU, which is projected to increase annual revenues by 245 percent to $1.456 billion, nearly doubling the company’s adjusted EBITDA to $800 million.

Seplat Energy’s acquisition of MPNU also represents a milestone for the company’s operational expansion, as it prepares to welcome approximately 1,500 employees and contractors from MPNU into its workforce.

The journey towards the realisation of the landmark MPNU acquisition has been a winding road, marked by challenges and obstacles. Initially announced in February 2022, the transaction encountered regulatory and legal hurdles, including opposition from the Nigerian National Petroleum Corporation (NNPC) which exercised its Right of First Refusal.

This initial opposition, along with the government’s initial withholding of approval and a court injunction, created a temporary roadblock in the transaction’s progress.

In a pivotal moment for Seplat Energy Plc, the tides turned in the company’s favour in 2024 when the NNPC withdrew its legal challenge and the federal government granted approval under the Petroleum Industry Act.

For Seplat Energy Plc, the MPNU acquisition is more than just a financial achievement. It represents a crucial stepping stone in the company’s journey to becoming a leading force in Nigeria’s energy sector, exemplifying Seplat’s unwavering resolve and strategic foresight.

Seplat Energy Plc’s success in closing the deal is considered a transformative moment in the company’s history, as it reaffirms its dedication to creating value for stakeholders while propelling the Nigerian oil and gas industry towards a brighter future.

The completion of this acquisition has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.

Commenting on the development, Udoma Udo Udoma, Chairman of Seplat Energy, said:

“Seplat Energy sincerely thanks His Excellency, President Bola Ahmed Tinubu GCFR, for supporting this transaction, and appreciates the support and diligence of the various Ministries and regulators for all the work to reach a successful conclusion.

“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.

“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the Government, regulators, communities and our staff.”

Roger Brown, chief executive officer of Seplat Energy, remarked, 

“Today we have achieved a major milestone in the history of Seplat Energy and I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.

“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.

“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.”

“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders.