Seplat better prepared to withstand production interruption

Seplat Petroleum Development Company Plc has stated that it is now much better positioned to withstand crude oil production interruption than in previous years.

  The current shut-in of the Forcados terminal has impacted the company’s 2016 full year production expectation.   It however said it is   much better positioned to withstand such interruptions than in prior years.

The company stated this during its Annual General Meeting where it declared $0.04 per share as final dividend for the 2015 fiscal year following the shareholders’ approval. This is just as it reiterated its strong operational performance and expansion of the gas business.

With the approval of $0.04 per share as dividend, it now brings the total dividend accruing to shareholders for fiscal 2015 to $0.08.

Ambrosie BC Orjiako, chairman of the company while commenting on the company’s 2015 result affirmed to the shareholders that despite the obvious headwinds facing the sector, it has made progress on all aspects of its strategy delivering best-in-class production and reserved growth, and transforming its gas business which achieved 185 percent year on year growth.

He said Seplat successfully completed and commissioned the Oben gas plant phase I expansion which saw the Company’s overall gross processing capacity double to 300MMscfd, adding that this was a significant step forward for its gas business in the year 2015.

“The Oben gas plant phase II expansion is underway with additional processing modules ordered. Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 MMscfd”.

Alongside the significant increase in gas production, the positive financial impact of Seplat’s gas business was evident as revenues from gas sales increased 185 percent year-on-year to US$77 million, he said.

The Chairman further stated: “Our position as Nigeria’s leading independent E&P company has been reinforced in the past 12 months during which we delivered on corporate performance target despite the oil price volatility. Our resilience is testament to the quality of our business; our strategy; our management team and staff; and our adherence to strong corporate governance policies.”

Austin Avuru, chief executive of the company, in his comment on the company’s performance, said: “In 2015, we delivered on what was in our control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come. We acted quickly and decisively in response to the weak oil price environment, adjusting our work programme and cost structures. Against a bleak industry backdrop, we remained profitable with a strong balance sheet underpinning us.”

As regards 2016 performance, the CEO added that the current shut-in of the Forcados terminal has impacted the company’s full year production expectation.  He however stated that the company is much better positioned to withstand such interruptions than in previous years.

He also noted that the gas business takes on additional importance by providing a continuous revenue stream that is de-linked from the oil price.

 “Our enlarged portfolio offers us the scope for greater diversification.”

He re-emphasised the strong focus of the company remains on protecting the business and managing value through effective cost reductions, optimising operations, delivering and strengthening the balance sheet.

This, he said, will strategically position the Company to take advantage of opportunities that will inevitably follow this current downturn.