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Seplat’s renegotiated gas sales, increased capacity utilisation raise revenue to $951.8m

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Seplat Energy Plc has announced that the positive impact of renegotiated Gas Sales Agreements (GSAs) in H2-2022, as well as sustained focus on increasing capacity utilisation in its Oben Gas Processing Plant, provided healthy support for its improved revenue and profitability.

Chairman of the company, Basil Omiyi, while fielding questions from journalists at the firm’s 10th yearly general meeting held in Lagos yesterday, said the company’s total revenue rose by 29.8 per cent to $951.8 million while profit before tax rose by 15.3 per cent to $204.4 million.

Besides, the directors of the company recommended a special dividend of five cents per share to be paid to shareholders, in addition to the final quarterly dividend of 2.5 cents per share. This brings the total dividend for the year to 15 cents per share. The shareholders at the meeting approved the dividend payout, which will be made on or around May 16, 2023 to shareholders whose names appear in the company’s register at the close of business on April 18, 2023.

According to Omiyi, the company’s gas business remained strong through the year, as good progress was made with the construction of the ANOH Gas Processing Plant, which now awaits the completion of third-party infrastructure before it can commence operations, projected for the final quarter of 2023.

He said the company, over the past 12 months had taken significant steps towards fulfilling its new purpose and vision with regard to energy transition, and was scaling up its midstream gas business to increase the amount of natural gas supplied towards powering Nigeria’s electricity grid thereby displacing diesel use in power generation, while the new energy business has been tasked with developing power and renewable energy.

Additionally, he said the company has strengthened its approach to understanding and evaluating climate risk as a key risk to its business.

“We have adopted a new Board-approved Climate Change Policy and have advanced a major component of our decarbonisation strategy: eliminating routine flaring by the end of 2024 through our Flares Out initiative, which is six years ahead of Nigerian regulatory requirements and the World Bank’s initiative to achieve Zero Routine Flaring by 2030.

These steps, he said form part of a transition plan that will align the business strategy with the overarching goal of the Paris Agreement to limit mean global temperature rise to well below 2°C and contribute to supporting Nigeria’s pathway to achieving carbon neutrality by 2060.

He added that the plan is subject to evaluation, approval and oversight of its board and management teams and is underpinned by actionable, specific initiatives for decarbonising operations and increasing the overall sustainability of its business model.

In accordance with guidance provided by the Taskforce on Climate-related Financial Disclosures, and as required under the terms of our listing on the London Stock Exchange, the chairman announced that the company had published its first Climate Risk and Resilience Report, which is a separate and comprehensive document that outlines its approach to climate change risk.

Omiyi also stated that the firm started the year on a strong footing, with working interest production of 29,078 barrels of oil per day (bopd) and 30,338bopd in Q1-2022 and Q2-2022 respectively,

“However, he added that production for the third quarter was impacted negatively by evacuation problems at the Forcados Oil Terminal (FOT), not being available for a period.

“Thankfully, the much-delayed launch of the Amukpe-Escravos Pipeline (AEP) provided some relief as we were able to flow c.10,100bopd (working interest production) during the period.

“The AEP is now a major export route for our largest assets at OMLs 4, 38 and 41. As a result, our reliance on the Trans Forcados Pipeline and FOT is significantly lower, reducing risks of downtime while providing a solid base for stronger export volumes and revenues,” he said.

Chief Operating Officer of the company, Samson Ezugworie, said as part of its drive to become a leading supplier of lower carbon and renewable energy, the company is currently exploring ways to expand into new and exciting markets.

According to him, the first target is to provide more gas for Nigeria’s power sector and reduce the country’s reliance on imported diesel fuel, which is highly carbon intensive and a drain on the nation’s wealth.

“We will also look at hybrid systems where we install solar or other renewable technology alongside gas, which will provide baseload power at all times.”

President of NewDimension Shareholders Association, Patrick Ajudua lauded the company for increasing their value on investment through the special dividend of 5 cents, in addition to the final dividend of 2.5 cents, bringing the total to 15 cents.

“We are, indeed, very grateful and we appreciate the Board for being consistent in dividend payment and ensuring a generous reward to the shareholders at a very difficult time, when most companies are even finding it difficult to maintain profitability.”

Also speaking, the president, Noble Shareholders Solidarity Association, Matthew Akinlade commended the company on its improved performance in 2022 financial year, noting that the company’s ability to put its cost under control smenhanced its overall performance.