Seplat Energy Plc reported a robust financial performance for H1 2025, driven primarily by a substantial increase in crude oil production volumes, notably due to the successful integration of offshore assets acquired from Mobil Producing Nigeria Unlimited (MPNU) and effective operational enhancements. However, the strong revenue growth was moderated by significant increases in costs, higher finance charges, and a substantial tax burden, leading to compressed profit margins and lower net earnings. 

Looking ahead, we anticipate sustained robust production volumes, with Seplat on track to achieve its full-year guidance of 120,000-140,000 boepd. However, profitability may remain subdued due to continued high taxation, elevated operating expenses, and financing costs. PAT is expected to remain modest relative to operating scale, potentially below FY 2024 levels. Nonetheless, Seplat s operational strength, asset integration, and strategic investments position the company positively beyond FY 2025, setting a foundation for improved efficiency and enhanced profitability in subsequent years. Consequently, we place an OVERWIGHT recommendation on Seplat Energy Plc.

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