Seplat sets gas production target for 2016

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SEPLAT Petroleum Development Company Plc, says it is committed to enhancing gas productivity and growing its portfolio targeted at closing the wide gap within the domestic gas industry of Nigeria and the power sector.

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At its 2016 AGM with about 500 stakeholders in attendance in Lagos recently, the company said the approval of the final dividend of US$0.04 per share, with total dividend payment $0.08 per share for 2015 was a strong boast.

Speaking on the company’s 2015 results, the Chairman, ABC Orjiako affirmed that the company made progress on all aspects of strategically delivering best-in-class production and reserve growth to about 185% year on year notwithstanding the obvious headwinds facing the sector.

In its press statement, the company said it successfully completed and commissioned the Oben gas plant 1 expansion, making the company’s overall gross processing capacity double to the tune of 300 MMscfd, a significant step forward for its gas business, according to the company.

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% year-on-year to US$77 million.

The Chairman further stated that Seplat’s position as Nigeria’s leading independent E&P Company has been reinforced in the past 12 months during which we delivered on corporate performance target despite the oil price volatility. “Our resilience is testament to the quality of our business, our strategy, our management team and staff, and our adherence to strong corporate governance policies”, the chairman said.

On the company’s performance, the CEO, Austin Avuru 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. Against a bleak industry backdrop, we remained profitable with a strong balance sheet underpinning us.”

About 2016 performance he said: “…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 from the oil price. Our enlarged portfolio offers us the scope for greater diversification.”

Working interest 2P reserves at the end of 2015 had increased 71% year-on year to 480 MMboe, with a further 98 MMboe recognized as 2C resources. Total reserves is at 578 MMboe.

Average working interest production during 2015 averaged 43,372 boepd, ahead of guidance and up 41% year-on-year. Within this, oil and condensate production accounted for 29,003 bopd (up 20% year-on-year) and natural gas production was 86 MMscfd (up 119% year-on-year). All of the natural gas production was supplied to the domestic market.

Gross revenue for the full-year stood at US$570 million, down 26% year-on year.  Net profit for 2015 stood at US$67 million and cash flow from operations before movements in working capital stood at US$190 million against capital investments of US$152 million. Cash at bank and net debt at year end stood at US$326 million and US$573 million, respectively. At the end of 2015, the net NPDC receivables balance stood at US$435 million, down from US$463 million at the end of 2014. Further receipts post period end have reduced the net NPDC receivables balance to a current level of around US$350 million.

Looking ahead throughout 2016, the Company said it has set full year production guidance at 41,000 to 48,000 boepd and expects its capital expenditures to be around US$130 million.

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