Nigerian oil and gas company, Seplat Petroleum Development Company Plc has reiterated its commitment to stronger growth and improved returns to shareholders.
Seplat’s Chairman, Dr. A.B.C. Orjiako, stated this in his welcome address to shareholders at the company’s sixth Annual General Meeting in Lagos, Nigeria.
Orjiako said the company would selectively invest in low risk oil production drilling opportunities within the existing portfolio and the continued expansion of the gas business, with 2019 set to be the year that activity intensifies at the large scale Assa-North and Ohaji-South (ANOH) gas and condensate development.
The Seplat Chairman’s comments comes on the back of the positive result the company recorded in 2018.
The company, which is listed on both the Nigerian Stock Exchange and London Stock Exchange, had declared a profit of ₦73 billion for the period ended, December 31, 2018.
During the financial year, Seplat generated ₦228 billion as revenue, representing a 65 per cent increase on the ₦173 billion it made as revenue in 2017.
The pre-tax profit of ₦73 billion for the 2018, represents a 480 per cent increase year-on-year. The figure for 2017 was ₦3 billion.
Further review of Seplat’s results for 2018 shows positive performance across several financial indices.
The gross profit for the period grew by 84 per cent to ₦120 billion from ₦65 billion reported in December 2017.
Operating profit stood at ₦95billion, representing a growth of 177 per cent over ₦34billion recorded in the corresponding period of December 2017.
Seplat’s net profit after tax dipped, however, by 45 per cent from ₦81 billion recorded as at December 2017 to ₦ 45 billion in December 2018.
Concerning the results, Dr Orjiako, said the Seplat’s 2018 operational and financial performance reflected the significantly higher year-on-year levels of production uptime at its core oil producing assets combined with a firmer, albeit still volatile, oil price and increased contribution from the company’s gas business.
He said, “As you are aware, our results from the previous two years were characterised by the extended period of force majeure at the Forcados terminal from February 2016 to June 2017.
“As we enter 2019, our reliable production base, low unit cost of production and discretion over capital commitments will allow the business to remain highly free cash flow generative and profitable.
“In the absence of any major interruption or force majeure event, this will enable Seplat to honour its dividend policy and provide an attractive yield to our shareholders in addition to the potential for capital appreciation.”
Also commenting on the financial results at the AGM, Seplat’s Chief Executive Officer, Mr. Austin Avuru, said, “Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation providing us with an extremely solid foundation for growth in the coming years.
“At our core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that we can confidently plan and invest long into the future to realise the full potential of those blocks.”
Avuru also spoke about the companies plans for revenue diversification and increased returns for shareholders.
He said, “As Seplat continues to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board took the Final Investment Decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for our gas business.
“Disciplined capital allocation continues to remain at the core of our activities evidenced by our continual deleveraging of our debt levels to the current balance of US$350m.”
Providing an update on some of the projects being executed by the company, Avuru announced that Seplat board has taken the Final Investment Decision for the ANOH and Amukpe to Escravos alternate export pipeline which will be completed and fully commissioned in Q2 2019. These projects are part of the future expansion initiatives of Seplat in Nigeria’s oil and gas industry.
For the 2018 financial year, the Seplat CEO said the company’s board has recommended a final dividend of US$0.05 per share to all its shareholders.
“In 2018, Seplat reinstated the dividend, increased capital investments and with the resources and headroom in our capital structure, we are equipped to capitalise on organic and inorganic growth opportunities as they may arise,” he added.