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Seplat Energy Lauds Executive Orders Of Federal Government

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Seplat Energy Lauds Executive Orders Of Federal Government

. Says Actions Driving Much Needed Efficiency Gains

 

 

By Abimbola Abdullah

Seplat Energy Plc, has applauded the progressive moves taken by President Bola Tinubu and the industry regulators, following the signing of the executive orders that will provide fiscal incentives in Nigeria’s gas and midstream businesses. 

 

The executive order, which was signed and gazetted into law, according to the company, has the potential to materially improve our contracting process and bring the right level of efficiency that will support cost reductions. 

“This can drive the much-needed efficiency gains across our industry,” it stated.

The energy firm has also announced its unaudited results for the three months ended 31 March 2024, declaring US 3 Cents dividend per share for the period.

For the period under review, production averaged 49,258 barrels of oil equivalent per day (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).

Seplat Energy also achieved more than 2.3 million hours without Lost Time Injury (LTI) at Seplat-operated assets in Q1 2024.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently 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, Seplat described this as a factor that aligned with Pillar 2 in its strategy.

According to Seplat, the message to investors on the acquisition of ExxonMobil’s share capital in Mobil Producing Nigeria Unlimited (MPNU) is unchanged. Dialogue between key parties is active and constructive, and the company remains confident that a conclusion will be reached on the transformational acquisition. 

Commenting on the results, Roger Brown, Chief Executive Officer, Seplat Energy Plc, said: “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. 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.

“In our FY 2023 results we 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.

“Looking further forward, we are pleased to share that we discovered hydrocarbons in deeper reservoirs than had previously been tested at Sapele-37 and Okhorpuru-9. The initial results are promising, again highlighting the world class quality of the geology in Nigeria.

“In Nigeria, we were pleased to see more progressive actions taken by President Tinubu and the industry regulators. In March, the President signed executive orders that will provide fiscal incentives in our 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. We applaud the change, which can drive much needed efficiency gains across our 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.

“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.”

Giving the operational highlights, the company stated that: 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).

  • ANOH gas plant pre-commissioning works ongoing. Seplat maintains its first gas target in 3Q 2024.
  • Sibiri-1 on stream a few weeks after FDP approval, work ongoing to commence production from Sibiri2.
  • Discovery of hydrocarbons in previously untested deep reservoirs at Sapele-37 and Okporhuru-9.
  • Carbon emissions intensity: 29.4 kg CO2/boe (3M 2023: 26.4 kg CO2/boe). End of Routine Flaring (“EORF”) projects are on track, with EORF expected in H2 2025, these will deliver a material reduction in emissions intensity.
  • Achieved more than 2.3 million hours without Lost Time Injury (“LTI”) at Seplat-operated assets in Q1 2024.

 

On the financial highlights, it stated: Revenue $179.8 million, down from $331.0 million in 3M 2023 (after adjusting for underlift and overlift oil volumes, 3M 2024 adjusted 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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Seplat Energy Lauds Executive Orders Of Federal Government

. Says Actions Driving Much Needed Efficiency Gains

 

 

By Abimbola Abdullah

Seplat Energy Plc, has applauded the progressive moves taken by President Bola Tinubu and the industry regulators, following the signing of the executive orders that will provide fiscal incentives in Nigeria’s gas and midstream businesses. 

 

The executive order, which was signed and gazetted into law, according to the company, has the potential to materially improve our contracting process and bring the right level of efficiency that will support cost reductions. 

“This can drive the much-needed efficiency gains across our industry,” it stated.

The energy firm has also announced its unaudited results for the three months ended 31 March 2024, declaring US 3 Cents dividend per share for the period.

For the period under review, production averaged 49,258 barrels of oil equivalent per day (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).

Seplat Energy also achieved more than 2.3 million hours without Lost Time Injury (LTI) at Seplat-operated assets in Q1 2024.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently 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, Seplat described this as a factor that aligned with Pillar 2 in its strategy.

According to Seplat, the message to investors on the acquisition of ExxonMobil’s share capital in Mobil Producing Nigeria Unlimited (MPNU) is unchanged. Dialogue between key parties is active and constructive, and the company remains confident that a conclusion will be reached on the transformational acquisition. 

Commenting on the results, Roger Brown, Chief Executive Officer, Seplat Energy Plc, said: “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. 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.

“In our FY 2023 results we 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.

“Looking further forward, we are pleased to share that we discovered hydrocarbons in deeper reservoirs than had previously been tested at Sapele-37 and Okhorpuru-9. The initial results are promising, again highlighting the world class quality of the geology in Nigeria.

“In Nigeria, we were pleased to see more progressive actions taken by President Tinubu and the industry regulators. In March, the President signed executive orders that will provide fiscal incentives in our 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. We applaud the change, which can drive much needed efficiency gains across our 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.

“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.”

Giving the operational highlights, the company stated that: 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).

  • ANOH gas plant pre-commissioning works ongoing. Seplat maintains its first gas target in 3Q 2024.
  • Sibiri-1 on stream a few weeks after FDP approval, work ongoing to commence production from Sibiri2.
  • Discovery of hydrocarbons in previously untested deep reservoirs at Sapele-37 and Okporhuru-9.
  • Carbon emissions intensity: 29.4 kg CO2/boe (3M 2023: 26.4 kg CO2/boe). End of Routine Flaring (“EORF”) projects are on track, with EORF expected in H2 2025, these will deliver a material reduction in emissions intensity.
  • Achieved more than 2.3 million hours without Lost Time Injury (“LTI”) at Seplat-operated assets in Q1 2024.

 

On the financial highlights, it stated: Revenue $179.8 million, down from $331.0 million in 3M 2023 (after adjusting for underlift and overlift oil volumes, 3M 2024 adjusted 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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Adebimpe Oyebade is a Nollywood star, who recently got married to a colleague, Lateef Adedimeji in a glamorous wedding.

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