Seplat Petroleum Development Company Plc , a leading Nigerian indigenous oil and gas company listed on both the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE), has recorded a rise of 15 percent in its half-year (H1) profit before deferred tax.
In its unaudited consolidated half-yearly financial results for the period ended June 30, 2019 made available to the NSE and LSE on Tuesday, Seplat reported a profit before deferred tax of $121million (N37billion) from $105million (N32billion) reported in the first half of 2018.
The Company’s revenue for the period also appreciated by four per cent to $355million (N109billion), which is higher than the 2018 half-year figure of $343million (N105billion).
On a similar note, the oil firm’s gross profit rose by 19 per cent to $207million (N64billion) from $174million (N53billion) reported in 2018 half-year. Operating cash flow hit $255million from $245million, indicating a four percent appreciation year-on-year.
Commenting on the company’s financial performance for the period, the Chief Executive Officer, Seplat Petroleum Development Company, Austin Avuru, said: “Today’s results further emphasise the strong cash generation potential of our low-cost production base and the good progress we are making at the large scale Assa North/Ohaji South (ANOH) gas and condensate development project”.
He said: “Our H1 work programme has been impacted owing to unforeseen delays from rig contractors as well as the need to undertake higher levels of maintenance and asset integrity work for longer-term benefit of the assets. Both have affected production during the H1 but we have now secured the necessary rig capacity for the second half to implement the revised work programme which will drive us towards an 2019 exit working interest production rate of 62,000 barrels of oil equivalent per day (boepd) and bring annualised production within the unchanged guidance range of 49,000 to 55,000 boepd.
“Meanwhile, we remain on an extremely solid financial footing and concentrated on furthering our growth strategy as we target both organic and inorganic opportunities to grow shareholder returns.”
The revenue of $355million (up by four per cent year-on-year) was with gas tolling revenue of $67m recognised for the first time in relation to the processing of the Nigerian Petroleum Development Company’s (NPDC) gas through the Seplat sole risk funded Oben Gas Plant 375 million standard cubic feet per day (MMscfd) expansion between June 2015 and 2018 end.
The gross profit of $207million, according to Seplat, represents a 58 per cent margin (up from 51 per cent in H1 2018) while operating profit of $139m is down 12 per cent year-on-year after adjusting for a $40m impairment of NDPC receivables
Significantly lower finance costs of $25million (down 39 percent year-on-year) have kept profit before tax flat year-on-year at $120million with net profit from continuing operations standing at $119million.
Average working interest production during H1 2019 was 48,004 boepd (compared to 51,099 boepd in H1 2018) and comprised 22,974 bopd liquids and 145 MMscfd gas. Production uptime in the period was 88 per cent while reconciliation losses are expected to be finalised at levels consistent with prior periods.
Full year 2019 production guidance is maintained at 49,000 to 55,000 boepd on a working interest basis, comprising 24,000 to 27,000 bopd liquids and 146 to 164 MMscfd (25,000 to 28,000 boepd) gas production.
Sequencing of the 2019 work programme means the corresponding production uplift will be realised progressively throughout H2. This guidance range is predicated on there being no further prolonged force majeure event.
In H1 2019, Seplat lifted and monetised an equivalent of 266 kbbls of oil from OML55, which resulted in a receipt of $17m. The carrying value of the investment in the balance sheet was consequently reduced to $150million.
Alongside its oil business, the Company has also prioritised the commercialisation and development of the substantial gas reserves and resources identified at its blocks and is today a leading supplier of processed natural gas to the domestic market in Nigeria.
