By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE) – First dual listed Nigerian oil and gas upstream firm, Seplat Petroleum Development Company (SEPLAT) has said that working interest 2P reserves at the end of 2015 had increased 71 percent year-on-year (Y-o-Y) to 480 MMboe, with a further 98 MMboe recognised as 2C resources, Austin Avuru, CEO and Roger Brown CFO disclosed at the company’s “facts behind the figures” at the Nigerian Stock Exchange (NSE) in Lagos Nigeria.
The company affirmed that total reserves were reported as 578 MMboe and average working interest production during 2015 averaged 43,372 boepd, ahead of guidance and up 41 percent (Y-o-Y).
Avuru said within this, oil and condensate production accounted for 29,003 bopd (up 20 percent Y-o-Y and natural gas production was 86 MMscfd up 119 percent Y-o-Y. “All of the natural gas production was supplied to the domestic market,” the CEO of SEPLAT added.
According to Avuru, in a significant step forward for its gas business, during mid-year 2015, SEPLAT successfully completed and commissioned the Oben gas plant phase one (I) expansion. “This expansion saw the company’s overall gross processing capacity double to 300 MMscfd.
He disclosed the Oben gas plant phase II expansion is underway with additional processing modules ordered. “Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 MMscfd. Alongside the significant increase in gas production, the positive financial impact of SEPLAT’s gas business was evident as revenues from gas sales increased 185 percent year-on-year to $77 million,” he said.
The CEO at SEPLAT further affirmed that although production was up year-on-year, the significantly lower oil price realisation and downtime of third party operated infrastructure adversely impacted revenue, more than offsetting the increased contribution of the gas business.
“Consequently, gross revenue for the full-year stood at $570 million, down 26 percent year-on-year. Net profit for 2015 stood at $67 million and cash flow from operations before movements in working capital stood at $190 million against capital investments of $152 million. Cash at bank and net debt at year end stood at $326 million and $573 million, respectively. At the end of 2015, the net NPDC receivables balance stood at $435 million, down from $463 million at the end of 2014,” he noted.
Further receipts post period end have reduced the net NPDC receivables balance to a current level of around $350 million, according to the SEPLAT CEO.
“Looking ahead throughout 2016, the company has set full year production guidance at 41,000 to 48,000 boepd and expects its capital expenditures to be around $130 million,” Avuru added.
A review of the dual listed and leading indigenous Nigerian oil and gas exploration and Production Company, shows that its pretax profit for the period ended December 31, 2015 dropped 57.5 percent to N17.24 billion from N40.48 billion posted a year ago.
In the same vein, profit after tax (PAT) declined 67.5 percent to N13 billion from N40.48 billion declared the same period of 2015.
Revenue went down from N124 billion in 2014 audited year end to N113 billion in the review period of 2015; showing a depreciation of nine (9) percent, Seplat said in a filing with the Nigerian Stock Exchange (NSE).
However, the board of directors of SEPLAT is recommending a final dividend of $0.04 per share, bringing the total dividend payment for 2015 to $0.08 per share. Subject to the approval of the shareholders, the final dividend will be paid on or shortly after the Annual General Meeting (AGM), which is scheduled to hold on June 1, 2016 in Lagos, Nigeria.
While commenting on the annual report, the CEO of the company said “In 2015 we delivered on what was in our control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come. We acted quickly and decisively in response to the weak oil price environment, adjusting our work programme and cost structures, and against a bleak industry backdrop remained firmly profitable with a strong balance sheet underpinning us.
Having started the year strongly, our 2016 full year production expectation has been impacted by the current shut-in of the Forcados terminal. However, we are much better positioned to withstand such interruptions than in prior years. Our gas business takes on additional importance by providing a continuous revenue stream that is de-linked to the oil price and our enlarged portfolio offers us scope for greater diversification.
Finally, I would like to re-emphasise our strong focus remains on protecting the business and managing for value through driving further cost reductions, optimising operations, deleveraging and strengthening the balance sheet in preparation for opportunities that will inevitably follow this current downturn.”
