Seplat Energy plc, an indigenous Nigerian energy company with a strategic focus on Nigeria and listed on both the Nigerian Exchange Limited (NGX) and London Stock Exchange (LSE), last week held its ninth annual general meeting Lagos, and the shareholders approved for the board to pay a final dividend of $0.10 per share to shareholders.
However, the shareholders laud Bryan (ABC) Orjiako’s 13 years as Seplat chairman; approved the financial statement of the Company for the year ended December 31, 2021 and approved the appointment of three non-executive directors.
The financial year report showed an increase in profit before tax of 197.8 percent to N34.7billion from N10.6billion year-on-year. The company also generated cash from its operations to the tune of N74.4 billion from N1.7billion year-on-year, rising by 197.8 per cent.
The energy Company also grew its revenue by 58.6 per cent to N100.6 billion from N57.9 billion year-on-year; as its gross profit soared to N48.8 billion from N20.1 billion year-on-year, rising by 122.3 per cent.
Speaking to the shareholders, the chairman of Seplat Energy, Orjiako said, “Our operational and financial performance in 2021 reflects the challenges of our business in Nigeria. Our average working interest production was 47,693 barrels of oil equivalent per day (boepd) including 29,091 boepd of liquids and 107.9 MMscfd of gas (18,602 boepd).”
According to him, “Our robust operational performance, despite our operational challenges meant that we were able to meet our dividend commitment, and with the Board having approved a Q4 dividend of $0.025 per share, we once again returned $0.10 per share to our shareholders for the 2021.”
He pointed out that “Since we raised $535million at our initial public offering in May 2014, we have returned over $400million to shareholders in the form of dividends.” He explained, “The performance of our oil business was impacted by two lengthy shut-ins at one of the third-party operated export routes that we rely upon. This underscores the need for alternative export routes to mitigate this risk.
“We drilled five oil wells and three gas wells during the year; the oil wells have a combined gross potential of 17.5 kbopd and the gas wells have a combined gross rate of 130 MMscfd of gas and 5.2 kbopd of condensate. I am particularly proud of our strong safety record which saw us reach 24million hours without any Lost Time Injury (LTI) from our operating assets in 2021.”
He further explained that the company introduced hydrocarbons into the Amukpe-Escravos Pipeline (AEP) and are poised to launch this alternate export route which will enable the company to evacuate up to 40 kbopd gross from our OMLs 4, 38 and 41.
According to the chairman, this is an achievement worthy of note and this performance translated into revenues of $733million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $372million, up 38 per cent and 40 per cent respectively, from 2020, as our business recovered from the worst of the COVID-19 pandemic.
“Our cash position remained strong as we ended the year with $341million in cash and a net debt of $426million. We have certainly delivered on that vision of building a business that is now the leading Nigerian independent and a major provider of natural gas to the domestic market.”
On his decision to retire as Chairman and Director of Seplat Energy, he noted that, “In fulfilment of a promise we made long ago to have an Independent Non-Executive Chairman, I decided that it was essential to retire from the Board and as Chairman of Seplat Energy.
“It is therefore a promise kept in the overall interest of the Company. I have now served as Chairman of Seplat Energy for 12 years and it has been an honour and a privilege to do so.
I am proud of what we have been able to achieve, as we established ourselves as the largest indigenous independent energy company in Nigeria through operational excellence, the acquisition of eight oil and gas assets, the expansion of our domestic gas business and the dual listing on both the Nigerian and London Stock Exchanges, the first by a Nigerian company. These achievements are down to our excellent team and our strong, collaborative relationships with our stakeholders.
With the recently announced proposed acquisition, we are going to be in an even better position to drive transformational growth and profitability for all our stakeholders, meet our vision of delivering Nigeria’s energy transition and become the Nigerian energy champion. I am leaving the Board of Directors with a sense of fulfilment, not only in co-founding Seplat Energy, but also steering it to an enviable position.”
The chairman said, “This is my last AGM as your chairman. Now that I have climbed the iroko, I have fetched all the firewood,” Orjiako cheerfully told the shareholders at the meeting.
“I’m very happy that I have been associated with the company in the last 13 years. It has been a good journey. It is the real actualisation of good dream that was supported by the people Seplat has,” Orjiako said.
Commenting on the appointment of the new directors the Chairman said “the Board of Seplat Energy is pleased to welcome Bashirat Odunewu, Kazeem Raimi and Ernest Ebi. Noting that they are excellent professionals with their wealth of experience spanning over decades and that Seplat Energy eagerly looks forward to the enormous contributions they will make towards achieving global success.”
The CEO of the Energy company, Roger Brown in a statement said: “The energy industry in Nigeria has a bright future and as Nigeria’s indigenous energy leader we are going to be powering the country’s energy transition and future prosperity.
“The addition of MPNU nearly tripled our production and doubled our reserves on a pro forma 2020 basis, reinforcing our leadership of Nigeria’s indigenous energy sector and enabling us to generate strong future cash flows that will underpin our investment in Nigeria’s energy transition and improve our overall stakeholder returns.
“Our 2021 performance was affected by outages at Forcados Terminal that will no longer have such an impact when we switch to the new Amukpe-Escravos Pipeline, which we expected to launch in March. This is part of our strategy to diversify and de-risk routes to market, assuring higher revenues from significantly better uptime and lower reconciliation losses.
Furthermore, once we have completed our acquisition of MPNU, we will add significant production from offshore assets with dedicated export terminals that also have higher availability and lower reconciliation losses.
The addition of MPNU offers a significant undeveloped gas resource base which, alongside our ANOH gas project development will underpin Nigeria’s energy transition and drive domestic and export revenues when developed.
“Our financial strength is matched by the skills and ambitions of our staff and we look forward to welcoming more than a thousand highly trained colleagues from MPNU and working with them to ensure their smooth onboarding into Seplat Energy.
Together we will build a sustainable, world-class company that generates attractive returns for stakeholders and delivers energy transition for one of the world’s largest and most rapidly growing populations.”
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Shareholders who spoke at the meeting were unanimous in their commendation of the board and management of Seplat for the impressive financial results.
Ayodele Kudaisi of Independent Shareholders Association of Nigeria (ISAN) who tagged her comments as validatory/ recommendation said, “As the saying goes, there’s nothing that has a beginning that doesn’t have an end. It is so painful to all shareholders that you have to leave at this point in time. You have done so well and so much for the entity called Seplat Energy.”
“You and your team have taken Seplat to an enviable position among all its peers, with resiliency, commitment, focus and unsurpassed objectivity. You have come, you have seen and you have conquered.
We are definitely going to miss you here, but don’t be too far away from Seplat. “From time to time, there may be need to tap from your vast experience for a way forward. To the incoming chairman, the shoes that you are going to leave behind are so giant for anybody to wear, but I want to believe that the incoming chairman will not disappoint us, I pray not. Outgoing chairman, may you be blessed more. May your ways be smooth, and may your future endeavors be smooth,” Kudaisi said.
Also speaking, another shareholder, Anthony Omoniyi Omojola, current national coordinator, Independent Shareholders Association of Nigeria said “That Seplat Energy is a reliable energy company with limitless potentials is not a mere statement.
This has been aptly demonstrated in our performance in the 2021 annual report and accounts we are considering.” “You have shown leadership by example by your actions as we pray to reap the benefits of this well planned out accelerated growth pattern. We congratulate you. We are proud of the strong foundation you have laid to position Seplat as a leading indigenous energy company in Nigeria within a short space,” Omojola said.
Matthew Akinlade, president, Noble Shareholders Solidarity Association (NSSA) said “This is a unique occasion that one must commend the Board and Management of the company for stellar performance. I felt highly impressed with the kind of progress made.
