Seplat Energy PLC, a prominent independent energy company in Nigeria listed on both the Nigerian Exchange and the London Stock Exchange, has announced its unaudited results for the nine months ending September 30, 2024. The company reported a robust underlying business performance, which has enabled a 20% increase in its core dividend to US 3.6 cents per share for the third quarter of 2024. In total, Seplat Energy has declared a core dividend of US 9.6 cents per share for 2024 thus far.
The leading indigenous energy firm saw its revenue rise significantly to N1.071 trillion, up from N478.1 billion year-on-year. Additionally, cash generated from operations surged to N633.8 billion, compared to N213.8 billion in the previous year.
Average working interest production for the period stood at 47,525 barrels of oil equivalent per day (boepd), slightly below the 48,152 boepd recorded in the same period last year, but still within the company’s guidance range.
Seplat Energy’s operating profit also experienced substantial growth, increasing to N411.3 billion from N91.3 billion year-on-year. The company achieved an impressive 8.2 million man-hours worked with no Lost Time Injuries (LTI), underscoring its commitment to safety and operational excellence.
Operational highlights
- Working interest production averaged 47,525 boepd (9M 2023: 48,152 boepd), around the midpoint of guidance. Daily average liquids production increased 6% and gas production decreased by 11% versus 9M 2023. Annual guidance narrowed to 46,000 – 50,000 boepd (previously 44,000 – 52,000 boepd).
- Oben gas plant turnaround maintenance activity successfully completed, expect higher gas production in 4Q 2024.
- Abiala first oil achieved in September. Exports to commence during Q4 2024, targeting gross production level of c.5,000 bopd in Q1 2025.
- Trans Niger Pipeline (‘TNP’) availability improving, supporting higher OML 53 production, 3Q 2024 production of 2,097 bopd +85% compared to 3Q 2023, and enabling a resumption of OML 53 crude lifting at Bonny Terminal in September.
- Drilling activity increased. Completed nine wells year to date. Seven from the 2024 program, which is on track.
- ANOH Gas project saw completion of the 23km spur line, but the OB3 pipeline experienced further delays due to the technical challenges associated with the project. NGIC completion date has now moved to end of 2024. Factoring in a further contingency, in line with our previously stated approach, first gas is now expected during 2Q 2025.
- Carbon intensity of 32.7 kgCO2e/boe (9M 2023: 26.0 kgCO2e/boe) for operated assets. High 3Q 2024 emissions due to increased flaring during planned maintenance at Oben and following the resumption of operations at Ohaji, OML53. The anticipated impact of the End of Routine Flaring projects, starting in the second half of 2025, is expected to materially reduce absolute emissions by up to 70%.
- Safety culture maintained, achieved 8.2-million-man hours without LTI at Seplat operated assets year to date.
Financial highlights
- Revenues of $715.3 million, down 11.7% vs. 9M 2023 ($810.4 million), largely due to overlift reported at 9M 2023. Adjusting for overlift/underlift 9M 2024 revenue $724 million, +6% compared to 9M 2023 of $683 million
- Average price realisations. Oil: $82.89/bbl (9M 2023: $82.76/bbl); Gas: $3.18/Mscf (9M 2023: $2.87/Mscf).
- Adjusted EBITDA $383.0 million, up 25% from $306.4 million in 9M 2023, driven by higher revenue (adjusted) and lower costs.
- Cash generated from operations of $423.3 million, up 17% from $362.3 million in 9M 2023.
- Capex of $157.0 million (9M 2023: $125.4 million), reflecting higher drilling activity.
- Balance sheet cash at 9M 2024, $433.9 million (9M 2023: $391.0 million). Net debt at end September, $270 million, down from $366 million at end June 2024. $38.5 million of Reserve-Based Lending (RBL) borrowings repaid year to date. Period end Net Debt to EBITDA was 0.5x.
Corporate updates
- Received Ministerial Consent for acquisition of entire issued share capital of Mobil Producing Nigeria Unlimited (‘MPNU’).
- Strong underlying business performance supports increase to core dividend. 3Q 24 dividend raised by 20% to US3.6 cents. Total core dividend declared to date in 2024 $9.6 cents per share.
- 2024 production guidance narrowed to 46,000 – 50,000 boepd (previously 44,000 – 52,000 boepd). Capex now expected at the top end of the guidance range ($170 million – $200 million).
Reflecting on the results, Mr. Roger Brown, Chief Executive Officer of Seplat Energy, stated: “The first nine months of 2024 have showcased Seplat Energy’s strong operational performance. Our production levels have remained stable, drilling activities have improved, and we have successfully executed our main maintenance tasks. We have brought two new fields online, including the recent addition of Abiala, and are nearing the completion of the Sapele gas plant. While we are frustrated by delays in the startup of the ANOH project, we appreciate the commitment of our government partner in addressing the technically challenging river crossing.
Based on the latest estimates, and while remaining cautiously optimistic about potential delays, we are updating our first gas guidance to Q2 2025. Supportive commodity prices, along with operational uptime and timely cash calls from our joint venture partner, have significantly improved our cash generation compared to last year, strengthening our balance sheet. Consequently, we are pleased to announce a 20% increase in our core quarterly dividend, reflecting the strength of our underlying business. This increase does not take into account the organic (ANOH) and inorganic (MPNU) growth opportunities we are currently exploring.
We are also excited to have recently received Ministerial consent for the acquisition of MPNU. This transaction is expected to be transformational for Seplat Energy, and we are fully focused on completing it.”
