Seplat Energy records 238% growth in PBT to $209.9m in H1 2022

By Anita Okoro.

Seplat Energy Plc, a leading Nigerian independent energy company, has reported a rise of 238 percent in its half year 2022 profit before tax (PBT) to $209.9 million from $62.1 million recorded in the corresponding period of 2021.

The company, listed on both the Nigerian Exchange and the London Stock Exchange, also maintained a strong balance sheet with $350 million cash at the bank.

According to the company’s unaudited results for the six months ended 30 June 2022, revenue for the period under review also appreciated by 71 percent to $527 million from $308.8 million in the year-earlier period, with a dividend of US$2.5 cents per share declared.

The indigenous energy company also reported a 208.5 percent rise in gross profit to $274.3m from $88.9 million a year earlier.

Commenting on the results, which were released to the NSE and LSE on Thursday, Roger Brown, CEO of Seplat Energy Plc, said production increased strongly in the second quarter, achieving 52.4 kboepd across the company’s operations, and the company expects to maintain higher volumes for the rest of the year as it plans to export liquids through the more secure Amukpe-Escravos Pipeline.

“Having divested our interest in Ubima because of its high production costs and export difficulties, we recently acquired a 95 percent interest in the Abiala marginal field and plan to begin operations there next year using existing infrastructure in OML 40,” Brown said.

“This is consistent with the strategy for low-cost, low-risk upstream growth we announced last year. We remain confident that our transformational acquisition of MPNU will be approved, adding significant reserves and production capacity that will strongly reinforce Seplat Energy’s position as Nigeria’s leading indigenous oil and gas producer,” he said.

Brown said Seplat has committed to stopping routine flaring as it recently launched a roadmap for decarbonisation, with a clear path to ending routine flaring by 2024.

“In addition, our ‘Tree for Life’ initiative will plant 5 million saplings to sequester carbon across five states. All of these initiatives demonstrate our strategic commitment to building a sustainable company that delivers energy transition for the benefit of all Nigerians,” he said.

Seplat Energy reiterated that the Sales & Purchase Agreement (SPA) signed on 25 February, 2022 to acquire Exxon’s shallow water operations in Nigeria, MPNU, remained valid and the company remained confident that the proposed acquisition would be brought to a successful conclusion in accordance with the law.

On the company’s outlook, Seplat said full-year production guidance for 2022 reflects expected third-party downtime and the derecognition of Ubima and has been narrowed to 50,000 to 54,000 boepd on a working interest basis, comprising 30,000 to 33,000 bopd liquids and 116 to 121 MMscfd (around 20,000 to 21,000 boepd) gas production.

“Capital expenditure expectation for 2022 remains at around $160 million. The company expects to drill four additional oil wells in the coming quarter to arrest decline and support production growth across the asset base, complete ongoing projects, invest in maintenance capex to secure the existing assets and continue investments in gas,” Seplat said.