Seplat grows profit by 15%

Seplat Petroleum Development Company Plc, a leading Nigerian indigenous oil and gas company has recorded growth of 15 per cent in its profit before tax in its half year financial result ended June 30, 2019.

The company which listed on both the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE), has reported a profit before deferred tax of $121million (N37 billion) from $105 million (N32 billion) recorded in the first half of 2018.

In its unaudited consolidated half-year financial results for the made available to the NSE, the Company’s revenue for the period appreciated by four per cent to $355 million (N109 billion), which is higher than $343 million (N105 billion) recorded in the preceding year.

On a similar note, the oil firm’s gross profit rose by 19 per cent to $207 million (N64 billion) from $174 million (N53 billion) reported in 2018 half-year.

Operating cash flow went to  $255 million from $245 million, indicating a four per cent appreciation year-on-year.

Commenting on the company’s financial performance for the period, the Chief Executive Officer, Seplat Petroleum Development Company, Mr. Austin Avuru, said: “Today’s results further emphasised the strong cash generation potential of our low-cost production base and the good progress we are making at the large scale Assa North/Ohaji South (ANOH) gas and condensate development project.

“Our half year work programme has been impacted owing to unforeseen delays from rig contractors as well as the need to undertake higher levels of maintenance and asset integrity work for longer-term benefit of the assets. Both have affected production during the half year but we have now secured the necessary rig capacity for the second half to implement the revised work programme which will drive us towards an 2019 exit working interest production rate of 62,000 barrels of oil equivalent per day (boepd) and bring annualised production within the unchanged guidance range of 49,000 to 55,000 boepd.

“Meanwhile, we remain on an extremely solid financial footing and concentrated on furthering our growth strategy as we target both organic and inorganic opportunities to grow shareholder returns.”

The revenue of $355 million up by four per cent year-on-year was with gas tolling revenue of $67 million recognised for the first time in relation to the processing of the Nigerian Petroleum Development Company’s (NPDC) gas through the Seplat sole risk funded Oben Gas Plant 375 million standard cubic feet per day (MMscfd) expansion between June 2015 and 2018 end.

The gross profit of $207 million, according to Seplat, represents a 58 per cent margin, up from 51 per cent in half year 2018) while operating profit of $139 million is down 12 per cent year-on-year after adjusting for a $40million impairment of NDPC receivables.

Significantly lower finance costs of $25 million down by 39 per cent year-on-year have kept profit before tax flat year-on-year at $120 million with net profit from continuing operations standing at $119 million.

Average working interest production during Half year 2019 was 48,004 boepd (compared to 51,099 boepd in half year 2018) and comprised 22,974 bopd liquids and 145 MMscfd gas. Production uptime in the period was 88 per cent while reconciliation losses are expected to be finalised at levels consistent with prior periods.

Full year 2019 production guidance is maintained at 49,000 to 55,000 boepd on a working interest basis, comprising 24,000 to 27,000 bopd liquids and 146 to 164 MMscfd (25,000 to 28,000 boepd) gas production.

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