Seplat unveils prospectus for $800M MPNU asset acquisition

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

Onome Amuge

Seplat Energy Plc, a leading energy company listed on both the Nigerian and London Stock Exchanges, has confirmed the release of its prospectus for the acquisition of Mobil Producing Nigeria Unlimited (MPNU).

The transaction, which has received approval from the federal government, is set to close on December 12, 2024, elevating Seplat Energy’s standing in the Nigerian energy landscape and ushering a new era of growth and transformation for the company.

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 also 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.

The Company also stated that it will incur $23 million in other transaction related costs, with $64 million regulatory consent fees reflected in adjustments to the cash consideration due at closing.

Seplat Energy Plc has reaffirmed the strategic value of the MPNU acquisition, which includes a diverse portfolio of assets that add significant equity to the company’s oil and gas production operations.

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 significant 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 company explained that the transaction is classified as a Reverse Takeover (‘RTO’) under the UK Financial Conduct Authority (‘FCA’) listing rules, necessitating the publication of a prospectus.