Seplat Petroleum Development Company Plc, has announced its unaudited results for the nine months ended 30 September 2020, recording increased operational efficiencies and further reduction in costs.
The Company has continued its expansion into midstream gas processing to reduce carbon emissions by displacing inefficient and expensive diesel generated electricity, and this is aimed at ensuring that Seplat remained at the forefront of Nigeria’s exciting energy transition and provide sustainable energy for a young and rapidly growing population.
Despite the restraints of the COVID-19 pandemic and the recent unrest in Nigeria, Seplat announced a $0.05 dividend payout to shareholders for the period whilst remaining confident that its cost-cutting initiatives and prudent management of cash would enable further reductions in debt, and support dividend payments and investment for growth.
Commenting on the results, which were released to the NSE and LSE on Friday, Mr. Roger Brown, the Chief Executive Officer of the Company, said: “Seplat’s third-quarter performance has again demonstrated the resilience of our business in challenging times and in addition to voluntarily reducing our debt leverage by US$100 million, we are maintaining our commitment to shareholders by declaring an interim dividend of US$0.05 per share, as we have in previous years. The business continues to operate effectively despite the restraints of the COVID-19 pandemic and the recent unrest in Nigeria.
“We continue to hedge our oil business against further price volatility and are pursuing further cost-cutting initiatives to ensure that we will remain profitable even at lower prices experienced earlier in the year.
“We have strengthened our oversight with the appointment of two independent directors, Arunma Oteh and Xavier Rolet, who bring considerable local and international business and governance expertise to the Board.
“I have taken over the leadership of Seplat at a challenging time for our industry, but I am confident that our actions to increase operational efficiencies, further reduce costs and continue our expansion into midstream gas processing to reduce carbon emissions by displacing inefficient and expensive diesel generated electricity, will ensure that Seplat remains at the forefront of Nigeria’s exciting energy transition and provide sustainable energy for a young and rapidly growing population.”
“Following our performance over the first nine months of the year we are narrowing guidance to 48,000-52,000 boepd for the full year. We continue to hedge against oil price volatility and expect a higher proportion of revenues to come from long-term gas contracts at stable prices. We also continue to focus on cost savings to maintain profitability at the lower oil prices we have realised so far this year.
“We have significant cash resources available and will continue to manage our finances prudently in 2020, expecting now to invest US$120 million of capital expenditure across the full year (of which US$109 million has already been invested). We remain confident that our cost-cutting initiatives and prudent management of cash will enable further reductions in debt, whilst supporting dividend payments and investment for growth.
“The timely completion of the ANOH project in late 2021 remains a major priority and we expect that the debt financing will achieve financial close in the coming weeks.” said Brown.