MON APRIL 29 2024-theGBJournal| Seplat Energy Plc published is unaudited financial report for Q1-2024 today, reporting a net revenue of US$179.8 million, down from $331.0 million in 3M 2023, which is a net loss of 45.75% (after adjusting for overlift and underlift oil volumes, 3M 2024 revenues of $236.3 million against $255.6 million in 3M 2023).
Gross profit also fell by 78.5% to US$42.7 million from US$198.3 in Q1-2023.
The company, a leading Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, announced an interim dividend at a rate of US3 cents per Ordinary Share (subject to appropriate WHT) to be paid to SEPLAT’s shareholders whose names appear in the Register of Members as at the close of business on May 31, 2024.
The company’s oil production averaged 49,258 boepd, down 4.8% on prior period (3M 2023: 51,720 boepd), but 5.7% above Q4 2023 production, and towards the upper end of 2024 guidance (44,000 boepd – 52,000 boepd), during the period under review.
“Seplat Energy continued its trend of strong operational performance in the first quarter. Oil production on OMLs 4, 38, 40 and 41 outperformed expectations, benefitting from low pipeline losses and deferments, which were ahead of plan,” Roger Brown, Chief Executive Officer, while commenting on the result.
Brown acknowledged that Cash flow was down in the first quarter, ”but this is largely due to timing difference of lifting oil from the terminals. The business remains strong, production is firmly on track this year and price realisations remain supportive of cash generation.”
He noted that in the FY 2023 results the company outlined several growth opportunities for 2024.
”The first of these to start generating revenue for Seplat is Sibiri, which came on stream just a few weeks after the FDP approval was received from NUPRC. At Abiala (a marginal field within OML 40), the drilling programme is on track to start during 2Q.
We were delighted to see resumption of operations on the Trans Niger Pipeline in April, approximately four months ahead of plan. Access to the pipeline will enable us to increase production from OML53, as well as providing the primary export route for condensate from AGPC, which remains on track for first gas in 3Q 2024.”
The CEO also announced the discovery of hydrocarbons in deeper reservoirs than had previously been tested at Sapele-37 and Okhorpuru-9.
Brown announced that the initial results are promising, again highlighting the world class quality of the geology in Nigeria.
He applauded the ”more progressive actions” taken by President Tinubu and the industry regulators in the country including the executive orders which the President signed in March, that is aimed at providing fiscal incentives in the industry’s gas and midstream businesses.
”In addition, an executive order was signed and gazetted into law, which has potential to materially improve our contracting process and bring the right level of efficiency that will support costs reductions,” Brown noted, saying ”the change can drive much needed efficiency gains across the industry.”
More recently NMDPRA lifted the domestic gas price to $2.42/Mscf supporting revenue generation and re-emphasising the government’s commitment to develop Nigeria’s gas resources, a factor aligned with Pillar 2 in our strategy.
According to Brown, ”our message to investors on MPNU is unchanged. Dialogue between key parties is active and constructive, and we remain confident that we can reach a conclusion on this transformational acquisition.”
Financial Highlight
-Revenue $179.8 million from $331.0 million in 3M 2023 (after adjusting for overlift and underlift oil volumes, 3M 2024 revenues of $236.3 million against $255.6 million in 3M 2023).
-Average realised oil price $86.17/bbl (3M 2023: $82.32/bbl); average realised gas price $3.11/Mscf (3M 2023: $2.88/Mscf).
-Unit production opex of $9.6/boe, (3M 2023: $9.0/boe).
-Cash generated from operations of $16.8 million, primarily due to timing of liftings, $95 million received in April for volumes lifted in March, down from $145.0m in Q1 2023. Capex invested of $47.1 million (3M 2023: $44.7 million)
-Balance sheet cash down to $335.8 million (YE 2023: $450.1 million), $128 million MPNU cash deposit not included.
-Net debt at end March increased to $385 million (Dec 2023: $305 million), a further $19.3 million of RBL borrowings were repaid in the quarter. Net Debt to EBITDA was 0.9x.
-Q1 2024 dividend declared of US3.0 cents per share.
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