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Seplat Energy Posts 208.5% Rise In Q2 Gross Profit To $274.3million



Seplat Energy grows 2021 full-year gross profit by 128.9% to N114.2bn

… set to end routine flaring by 2024

Olushola Okunlade Writes

Seplat Energy Plc, a leading Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, has reported a rise of 238% in its half-year 2022 profit before tax (PBT) to $209.9m from $62.1m year-on-year.

The company also maintained a strong balance sheet with $350m cash at the bank.

In the company’s unaudited results for the six months ended 30 June 2022, revenue for the period under review also appreciated by 71% to $527m from $308.8m year-on-year, with a dividend of US$2.5 cents per share declared.

The indigenous energy company also reported a 208.5% rise in gross profit to $274.3m from $88.9m year on year and has committed to stopping routine flaring by the end of 2024.

Commenting on the results, which were released to the NSE and LSE on Thursday, Roger Brown, Chief Executive Officer, Seplat Energy Plc said: “Production increased strongly in the second quarter, achieving 52.4 kboepd across our operations, and we expect to maintain higher volumes for the rest of the year now that we plan to export liquids through the more secure Amukpe-Escravos Pipeline. Having divested our interest in Ubima because of its high production costs and export difficulties, we recently acquired a 95% interest in the Abiala marginal field and plan to begin operations there next year using existing infrastructure in OML 40. This is consistent with the strategy for low-cost, low-risk upstream growth we announced last year.

“We remain confident that our transformational acquisition of MPNU will be approved, adding significant reserves and production capacity that will strongly reinforce Seplat Energy’s position as Nigeria’s leading indigenous oil and gas producer.    

“We have recently launched a roadmap for decarbonisation, with a clear path to ending routine flaring by 2024. In addition, our ‘Tree for Life’ initiative will plant five million saplings to sequester carbon across five states. All of these initiatives demonstrate our strategic commitment to build a sustainable company that delivers energy transition for the benefit of all Nigerians.” 

Financial highlights   

•  Revenues up 71% from 6M 2021 to $527.0 million, higher realised oil prices of $107/bbl

• EBITDA up 92% to $342.7 million (adjusted for non-cash items)

•  Strong cash generation of $330.1 million, CAPEX of $70.7 million

• Strong balance sheet with $350.0 million cash at bank, net debt of $418.6 million    

• Lower production opex of $8.1/boe achieved

• Average realised gas pricing sustained at $2.76 despite pricing pressure on domestic gas delivery obligation

• Q2 dividend of US$2.5 cents per share, taking 6M 2022 total to US$5.0 cents per share   

Operational highlights

• Strong safety record extended to 28.4 million man-hours without lost-time injury from Seplat Energy-operated assets

• Working interest production improved to 52.4 kboepd in Q2 (liquids 30.3 kbopd, gas 22.1 kboepd),

6M average of 49.9 kboepd (excludes volumes from Ubima, which was divested in Q1)

• Amukpe-Escravos Pipeline commercial agreements signed, continuous injection expected from the first week of August

• Exit from Ubima completed for consideration of $55 million, with an initial payment of $6.4 received in July

• Agreement for 95% equity farm-in to the Abiala Marginal Field carved out of OML 40

• Five wells drilled

• Full-year guidance narrowed to 50-54 kboepd (excludes Ubima) 

Update on the proposed acquisition of Mobil Producing Nigeria Unlimited (MPNU)

• Transformational acquisition announced in February 2022 will almost triple production and boost reserves

• Seplat Energy reiterates that the Sales & Purchase Agreement (SPA) signed on 25 February 2022 to acquire Exxon’s shallow water operations in Nigeria, MPNU, remains valid and the Company remains confident that the proposed acquisition will be brought to a successful conclusion in accordance with the law

Q2 corporate updates

• Ongoing strengthening of governance continues with the transition from founder Chairman to Independent Chairman, Basil Omiyi, appointed on 18 May; three new Board members were announced during the period

• Samson Ezugworie joins Board in the newly created role of Chief Operating Officer 

• ‘Tree for Life’ decarbonisation initiative launched in May with a commitment to plant five million trees in five years across five states in Nigeria

• Seplat West (OMLs 4,38 &41) recommended ISO 55001 (Asset Management), a first for African E&P 


Full-year production guidance for 2022 reflects expected third-party downtime and the derecognition of Ubima and has been narrowed to 50,000 to 54,000 boepd on a working interest basis, comprising 30,000 to 33,000 bopd liquids and 116 to 121 MMscfd (around 20,000 to 21,000 boepd) gas production.

Capital expenditure expectation for 2022 remains at around $160 million. The Company expects to drill four additional oil wells in the coming quarter to arrest the decline and support production growth across the asset base, complete ongoing projects, invest in maintenance CAPEX to secure the existing assets, and continue investments in gas.


Savannah Energy Signs New Gas Sales Agreement with Notore Chemical Industries PLC



Savannah Energy Signs New Gas Sales Agreement with Notore Chemical Industries PLC

By John Meze

Savannah Energy PLC, the British independent energy company focused on the delivery of Projects that Matter in Africa, has announced that the Company’s 80% indirectly owned subsidiary, Accugas Limited, has entered into a new gas sales agreement (“GSA”) with Notore Chemical Industries PLC (“Notore”).

Accugas will supply Notore with up to 10 MMscfpd of gas to augment its current supplies. The contracted supply is on an interruptible and reasonable endeavours basis, based on gas availability and nominations, for an initial term of one year, with the option to extend for a mutually agreed period. Notore’s fertilizer production plant is connected to the Accugas network via the Nigerian Gas Company pipeline from Ikot Abasi and no further tie-in or capital expenditure is required by Accugas to deliver gas to Notore.

Notore Chemical Industries PLC, formerly Notore Chemical Industries Ltd, is a Nigeria-based integrated agro-allied, chemicals and infrastructure company located in the Onne Oil and Gas Free Zone area of Rivers state in southern Nigeria. Notore’s primary business is the production of urea, ammonia, and NPK blend fertilisers and sale to the Nigerian and international markets. Notore’s facility has a production capacity of 1,500 metric tons (MT) per day of urea and 1,000 MT/day of ammonia.

Andrew Knott, CEO of Savannah Energy, said: “I am pleased to welcome Notore as a new gas customer to Accugas, representing our tenth customer site in total (versus three at the time of our acquisition of the Accugas business in 2019). We look forward to developing our working relationship with Notore over the course of the coming months and years.

Savannah Energy PLC is an AIM-quoted British independent energy company focused on the delivery of Projects that Matter in Africa and is active in Cameroon, Chad, Niger, and Nigeria.

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Bonny Light Energy Offshore Set To Supply 60m Litres Aviation Turbine Kerosene



Bonny Light Energy Offshore Set To Supply 60m Litres Aviation Turbine Kerosene

By John Meze

In an effort to ameliorate the aviation fuel supply disruption to the aviation industry, Nigeria’s emerging indigenous oil and gas major, Bonny Light Energy  Offshore Limited, has agreed to the supply of 60,000,00 0 litres of Aviation Turbine Kerosene (ATK) in the next six months.

This projected supply aligns with the pressing need for an increased supply of the much-needed fuel to sustain flight operations for millions of travelers in the country.

Speaking on this commitment, Mr. Toyin Banjo, Chief Executive Officer, Bonny Light Energy, and Offshore Limited, stated that the company’s response aligns with the company’s desire to salvage the Nigerian aviation sector from the daunting effects of the fuel shortage that is ravaging the global airline industry.

“The aviation industry is one of the most energy-intense sectors in the global economy regarding its consumption metrics. Unfortunately, as the industry began recovering from the COVID-19 pandemic-inspired slump in the global aviation sector, external pressures such as the Russia-Ukraine war have driven a sudden hike in fuel prices worldwide, which has resulted in a shortage of aviation fuels, thereby leading to this national aviation crisis.

“This is where our contributions come in. We are aware that Nigeria must build on its reputation of having a stable aviation industry, especially as it is the economic hub of Africa. However, as we have seen in recent times, global constraints can plunge our local aviation sector into a supply crisis despite Nigeria’s oil-rich status.

“As a responsible organisation with an understanding of the intricacies of international energy supply dynamics underpinned by our local knowledge of the Nigerian aviation space, we are committing a total of 60,000,000 litres of aviation turbine kerosene (ATK) monthly over the next six months.

“All things being equal, we are envisaging a supply of 60,000,000 litres of ATK, by the end of the year. We strongly believe that this corporate action will positively affect the supply crisis in Nigeria’s aviation industry and provide much-needed relief in the already strained sector.

“We, however, understand the complexities of the global aviation industry, as well as the existence of numerous factors which may impede the fulfillment of our projection. Some of these constraints include the paucity of foreign exchange, poor competitive currency lines by banks to support importers and marketing companies, and high logistics costs for transshipment or trans-loading of time-critical products.

“Despite these factors, we will continue in our strides, having supplied the market with similar volumes in the last quarter, ensuring that the projected volumes are achieved as an enduring solution to this supply gap in our aviation industry, especially in the imminent Ember Months and the electioneering season,” he further stated.

Bonny Light Energy and Offshore Ltd is an emerging corporation in Nigeria’s indigenous exploration, production, pipeline transportation, strategic storage, and marketing of petroleum products.

Over the years, the company has built expertise in the upstream, downstream, and midstream sectors of the oil and gas industry in Nigeria. It trades in both crude and refined petroleum products, which include Motor Fuels (Gasoline), Industrial Oils (AGO/Gasoil, Baseoil LPG) Aviation Fuels (ATK), Lubricants, and other various specialist oils (Bitumen).
 As a leading integrated Nigerian oil and gas exploration and production company, Bonny Light Energy augments a wide range of energy needs in the economy’s upstream, midstream, and downstream sectors – markets refined petroleum products and provides jetty services.

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Seplat Energy’s MPNU Ministerial Approval Stands, No Withdrawal



Seplat Energy grows 2021 full-year gross profit by 128.9% to N114.2bn

Olushola Okunlade Writes

Seplat Energy has officially responded to some false reports that the Ministerial Approval of the Company’s proposed acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) has been withdrawn.

The company deemed it fit to state categorically that the ministerial appointment stands and there was no withdrawal of any kind at all.

Seplat Energy Plc become aware of a news report claiming that Ministerial Approval of the Company’s proposed acquisition of the entire share capital of Mobil Producing Nigeria Unlimited (“MPNU”) has been withdrawn on Thursday 11 August 2022.

Seplat Energy has received no official notification of such a decision and is seeking clarification from the relevant authorities.

“We will continue to work with all parties to achieve a successful outcome for the proposed acquisition and will provide an update in due course” the company assured.

This announcement is made pursuant to Rule 17.10 of the Rulebook of the Nigerian Exchange, 2015 (Issuer’s Rule).

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