Seplat transfers oil assets, OMLs 4, 38 and 41, to subsidiary, Seplat West Limited
By Omobayo Azeez
Seplat Petroleum Development Company Plc, has announced the completion of transfer of the business activities and assets of OMLs 4, 38 and 41 from the holding company to its wholly owned subsidiary, Seplat West Limited.
Seplat is a leading Nigerian indigenous oil and gas company with dual listing on the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE).
Following regulatory and partner approvals, the transfer is effective January 1, 2020, it stated in a document on Thursday by Edith Onwuchekwa, company secretary/chief governance compliance officer, availing shareholders and the investing public with the development.
“This Intra-Group transfer has been planned for some time and will not result in any change to the current business strategy for any of the assets nor will it affect the way in which the Seplat Group commercially operates.
“Therefore, the operatorship of the asset remains with Seplat under the Joint Operating Agreement (“JOA”), as the transfer to an affiliate of Seplat under the terms of the JOA is permitted,” company explained.
On the rationale for the transfer of assets, it said the transfer of OMLs 4, 38 and 41 out of Seplat Plc into Seplat West results in seven wholly owned subsidiaries.
These are Newton Energy Limited; Seplat Petroleum Development Company UK Limited; Seplat East Onshore Limited; Seplat East Swamp Company Limited; Seplat Gas Company Limited; Eland Oil and Gas Limited and Seplat West Limited, with no operating oil and gas assets directly held in the Holding Company.
The new structure of the Seplat Group is consistent with its efforts to simplify its structure and design towards segregating the businesses of the group in a more efficient manner thereby reducing risk, cost and complexity, it said.
“This is also expected to result in a simplified management and reporting framework for the Seplat Group. The outcome of the transfer will not, in any way, result in loss of tax revenue to the Government or an extinguishment of liabilities.
“Similarly, it will not diminish shareholder value in (and returns from) Seplat as a listed company. Following discussions with the credit ratings agencies, the transfer is not expected to impact the ratings of the Group,” the statement read further.
Seplat has a 45 per cent working interest in OMLs 4, 38 and 41 which are located in Edo (OML 4) and Delta (OMLs 38 and 41) States onshore Nigeria.
In the last seven trading days, the Seplat’s share price at the NSE has declined by N47.60 or 10 per cent from N476.40 on June 9 to N428.80 on Thursday, June 18.
In the last 52 weeks, it has seen its worst decline at N397.70 per share and reached its highest price at N657.80. At the close of transaction today, the company has 588,444,561 shares outstanding valued at N252.325 billion.