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Tuesday, April 23, 2024

Seplat Energy’s 2023 FY gross profit rises by 14.5% to N349.3bn

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Seplat Energy PLC, a leading Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, has announced its audited results for the twelve months ended December 31, 2023, recording a growth of 12 percent in revenue from N403.9bn to N696.9bn.

The Board recommended a special dividend of US 3 cents per share in addition to the Q4 2023 declared dividend of US 3 cents per share. The core dividend declared for 2023 is US 12 cents per share, up 20 percent from 2022. Therefore, the total dividend declared is US 15 cents per share.

The energy company also reported a gross profit rise of 14.5 percent from N197.2bn to N349.3bn and achieved more than 8.7 million hours without lost time injury (LTI) on Seplat-operated assets in 2023.

Seplat Energy’s 2024 production guidance is set at 44–52 kboepd. Guidance assumes availability of TNP from 3Q 2024 and assumes ANOH contribution in line with guidance.

Initial 2024 capex guidance is $170–200 million. Drilling Capex Flat in 2022 (13 wells in the base plan). Seplat will fund capex on Abiala, a marginal field development tied into OML40.

In February 2024, the company received regulatory approval for the full-lifecycle field development plan (FDP) for the Sibiri oil discovery on OML40.

Financial highlights

• Revenue: $1,061.3 million, up 12% from $951.8 million in 2022.

• Average realised oil price $83.39/bbl (2022: $101.67/bbl); average realised gas price $2.90/Mscf (2022: $2.82/Mscf).

• Unit production opex of $10.4/boe (2022: $10.3/boe).

• Cash generated from operations of $520 million, down 10% on 2022, funding capex of $184 million and enhanced shareholder returns.

• Balance sheet strengthened, year-end cash at bank $450 million (2022: $404 million), excluding $128.3 million MPNU deposit.

• Net debt at year end 2023 reduced to $306 million (YE 2022: $366 million). Net Debt to EBITDA 0.7x.

Operational highlights

• Production averaged 47,758 boepd, up 8% from 2022 (44,104 boepd), and within original guidance.

• Year-end 2023 independently audited 2P reserves up 9% to 478 mmboe (YE 2022: 438 mmboe), 47% liquids.

• Drilled and completed 14 wells in 2023 (of which 6 completed in 4Q 2023), in line with our revised well program.

• The ANOH gas plant achieved mechanical completion on December 29, 2023. Our government partner recently announced that tunnelling operations on the Niger River crossing portion of the OB3 pipeline have begun. Seplat’s first gas guidance for 3Q 2024 is unchanged.

• Carbon emissions intensity: 27.9 kg CO2/boe (2022: 23.9 kg CO2/boe).

• Achieved more than 8.7 million hours without lost time injury (LTI) on Seplat-operated assets in 2023.

Special Dividend & Board Changes

• Board recommends a special dividend of US 3c/shr, in addition to Q4 23 declared dividend of US 3c/shr.

• Core dividend declared for 2023 of US 12c/shr, up 20% on 2022. Total dividend declared US 15c/shr.

• Mr. Udoma Udo Udoma was elected Chairman of the Board and will assume office on April 1, 2024, when he succeeds Mr. Basil Omiyi.

• Mr. Bello Rabiu elected as Senior Independent Non-Executive Director (SINED) and will succeed Dr. Charles Okeahalam effective 1st April 2024.

2024 Outlook

• 2024 production guidance of 44-52 kboepd. Guidance assumes availability of TNP from 3Q 2024, and assumes ANOH contribution in line with guidance.

• Initial 2024 capex guidance: $170–200 million. Drilling Capex Flat in 2022 (13 wells in the base plan). Seplat will fund capex on Abiala, a marginal field development tied into OML40.

• In February 2024 we received regulatory approval for the full lifecycle Field development plan (FDP) for the Sibiri oil discovery on OML40.

• We remain highly confident that President Tinubu’s administration will approve our acquisition of Exxon Mobil’s share capital of Mobil Producing Nigeria Unlimited (MPNU).

Commenting on the results, Roger Brown, Chief Executive Officer, Seplat Energy Plc, said: “Seplat Energy’s 2023 results illustrate the Company’s ability to deliver production growth, fortify our balance sheet and reward shareholders despite facing some unexpected challenges during the year.

“Operational performance was strong; production increased 8% over 2022, and we recorded the lowest level of reconciliation losses seen in recent years, a testament to the improving security efforts in the Niger Delta. Drilling yielded positive results, and I’m pleased to report strong 2P reserves growth, up 9% on prior year estimates. Our revenue exceeded $1 billion, and while costs increased, our proactive approach meant we generated more than $260 million of free cash flow in the year, allowing us to continue rewarding our shareholders and further reduce net debt.

“Our strong financial position, excellent operational performance and robust outlook means that we are delighted to declare a special dividend again this year, lifting the total dividend for the year to US$15 cents.

“In 2024, we look forward to a number of key growth events. We are moving forward on both the Sibiri and Abiala developments on OML40. Clear progress is also being made on the important ANOH gas project, with the first gas expected in 3Q 2024. Finally, we have high confidence that we will conclude the transformational acquisition of MPNU this year.

“I’m delighted to welcome Mr. Udoma as Seplat Energy’s new Chairman and Mr. Rabiu as SINED and wholeheartedly thank Mr. Omiyi and Mr. Okeahalam for their longstanding support and guidance. Nigeria’s Oil & Gas industry is going through a generational change and as we reach our tenth year as a listed company, we fully intend to play an important role as Nigeria’s leading independent company.”

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