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Fitch upgrades Seplat Energy to ‘B’ rating

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… Gas business, company resilience, ESG efforts, others lift rating

 

By Abimbola Abdullahi

Seplat Energy Plc has been upgraded to ‘B’ from ‘B-‘ by Fitch Ratings on its Long-Term Issuer Default Rating (IDR).

 

Fitch also confirms Seplat Energy’s Outlook to be ‘Stable’ and upgraded the company’s senior unsecured rating for $650 million senior notes due 2026 to ‘B’ from ‘B-‘, with a Recovery Rating of ‘RR4’.

The rating agency stated: “The upgrade reflects improved financial flexibility and a strong liquidity profile following debt refinancing in 2021, which in our view will help Seplat Energy survive for more than two years of force majeure without access to the Trans Forcados Pipeline (TFP). 

 

Amukpe-Escravos Pipeline (AEP), an alternative oil export route, has been completed and is undergoing commissioning, according to Seplat, but there is no certainty around when it will ship its first oil.”

 

The rating incorporates the small scale of Seplat Energy’s cash flows, concentration of the company’s asset base in Nigeria (B/Stable) and a historically unstable operating environment in the troubled Niger Delta, including recurring issues with the oil transportation system. 

 

The rating also reflects moderate leverage, conservative financial policies, competitive unit profitability, end-2020 2P reserve life of 27 years, and a growing domestic gas business.

 

Specifically, Fitch upgraded Seplat Energy’s $650m bonds to B from B-. The upgrade reflects improved financial flexibility and a strong liquidity profile following debt refinancing in 2021. Because of Seplat Energy’s prudent approach to financial management, Fitch believes the company has built a very strong balance sheet. 

 

Even if the Trans Forcados Pipeline was in force majeure for an unprecedented two years, Seplat Energy has sufficient strength to survive and service its debt interest

 

Fitch view is underpinned by its view of Seplat Energy’s prudent debt management, flexibility on dividends and flexibility to deploy capex. 

 

Fitch sees Seplat Energy’s gas business as having potential to enhance cash flows, particularly after ANOH comes onstream; ANOH itself is already fully funded

 

Fitch lauds Seplat Energy’s ESG efforts and notes deeper communication and cooperation between local communities, the government and Seplat have significantly reduced the number of attacks on oil infrastructure. 

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Serena Williams

Serena Williams is an American former professional tennis player. Born: 26 September 1981, Serena is 40 years. She bids farewell to tennis. We love you SERENA.

Quotes

Success is not final; failure is not fatal: It is the courage to continue that counts.

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… Gas business, company resilience, ESG efforts, others lift rating

 

By Abimbola Abdullahi

Seplat Energy Plc has been upgraded to ‘B’ from ‘B-‘ by Fitch Ratings on its Long-Term Issuer Default Rating (IDR).

 

Fitch also confirms Seplat Energy’s Outlook to be ‘Stable’ and upgraded the company’s senior unsecured rating for $650 million senior notes due 2026 to ‘B’ from ‘B-‘, with a Recovery Rating of ‘RR4’.

The rating agency stated: “The upgrade reflects improved financial flexibility and a strong liquidity profile following debt refinancing in 2021, which in our view will help Seplat Energy survive for more than two years of force majeure without access to the Trans Forcados Pipeline (TFP). 

 

Amukpe-Escravos Pipeline (AEP), an alternative oil export route, has been completed and is undergoing commissioning, according to Seplat, but there is no certainty around when it will ship its first oil.”

 

The rating incorporates the small scale of Seplat Energy’s cash flows, concentration of the company’s asset base in Nigeria (B/Stable) and a historically unstable operating environment in the troubled Niger Delta, including recurring issues with the oil transportation system. 

 

The rating also reflects moderate leverage, conservative financial policies, competitive unit profitability, end-2020 2P reserve life of 27 years, and a growing domestic gas business.

 

Specifically, Fitch upgraded Seplat Energy’s $650m bonds to B from B-. The upgrade reflects improved financial flexibility and a strong liquidity profile following debt refinancing in 2021. Because of Seplat Energy’s prudent approach to financial management, Fitch believes the company has built a very strong balance sheet. 

 

Even if the Trans Forcados Pipeline was in force majeure for an unprecedented two years, Seplat Energy has sufficient strength to survive and service its debt interest

 

Fitch view is underpinned by its view of Seplat Energy’s prudent debt management, flexibility on dividends and flexibility to deploy capex. 

 

Fitch sees Seplat Energy’s gas business as having potential to enhance cash flows, particularly after ANOH comes onstream; ANOH itself is already fully funded

 

Fitch lauds Seplat Energy’s ESG efforts and notes deeper communication and cooperation between local communities, the government and Seplat have significantly reduced the number of attacks on oil infrastructure. 

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Celebrity Code

Adebimpe Oyebade

Adebimpe Oyebade is a Nollywood star, who recently got married to a colleague, Lateef Adedimeji in a glamorous wedding.

Quotes

Your present circumstances don’t determine where you can go. They merely determine where you start.

  • Nido Qubein
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