Seplat Petroleum Business Development Company Plc said it will work hard to sustain its profitability position and returns on shareholders’ value, by pursuing growth opportunities in its key areas.
Oriental News Nigeria reports that the company returned back to profit in 2017 after its revenue fall continuously since 2014 and rapidly falling profits hit a big loss at the end of 2016.
Speaking Tuesday at the company’s fact behind the figure on the Nigerian Stock Exchange (NSE), the chief executive officer of Seplat, Austin Avuru said that the company is positioned to deliver long-term profitability and capitalise on growth opportunities.According to Avuru, the company will continue to pursue growth opportunities in the industry as it focused on strong financial position and a core business restored to full production operations, which provides a solid foundation upon which to resume pursuit of value accretive acquisition opportunities.
He noted that the company is focusing on delivering sustainable shareholder returns. In optimising its capital structure, he said that the company refinanced its balance sheet with four-year $300 million RCF and $350 million debut bond issuance, to strengthens liquidity position and diversifies capital base and also to allow for a more aggressive near term work programme and accelerated growth. He stated that the company will prioritise the diversification of crude export routes to mitigate concentration risk in the future.
The CEO stated that Seplat’s policy of creating multiple export routes for all of its assets had resulted in it actively pursuing alternative crude oil evacuation options for production at Oil Mining Leases 4, 38 and 41 and potential strategies to further grow and diversify production in order to reduce any over-reliance on one particular third party-operated export system. Avuru pointed out that in its gas business, the company is strategically positioned to access Nigeria’s main demand centres, saying that total operated processing capacity at Anoh completion will be capable of supporting 3,000MW power generation.
Also speaking on the company finance, the chief operating officer of Seplat, Roger Brown said that improved financial performance reflects strong production, cost efficiency and oil price tailwind. He stated that the company optimise its balance sheet to support growth, saying that successfully refined the balance sheet, proceeds to repay and cancel existing indebtedness. Brown pointed out that the management has stabilised the business in difficult conditions and positions the company for long-term growth.
On the company’s first quarter result ended March 31, 2018, Brown stated that the company posted a profit before tax of $59 million driven by higher production and oil price realisation. He added that Seplat is a key supplier of gas to the domestic market and underpins significant power generation. He noted that Nigeria has the ninth largest natural gas reserves globally, saying that there is strong demand for gas to support power projects and other commercial enterprises.
Avuru said that the company is not planning to go into refinery business in the nearest future adding that establishing refinery was not the company’s core business, noting that its core business was to develop natural gas.
“Establishing a refinery is not our core business, our core business is to find already developed produced natural gas and crude oil.
“In this case, a natural gas space to deliver it to the market because we are operating in the local market, we have to process.
“So, it is in the space of natural gas that we will come one step below than the upstream into the midstream.
“We do not have any immediate plans to go into the refinery business.
“However, if there is any refining investment opportunity close to where we produce crude oil, we will be interested in the refinery to the extent that it will help to provide evacuation to our crude oil solution,’’ Avuru said.
The chief executive officer said that Escravos would be ready by the end of third quarter, noting that there were little delays here and there.
According to him, by the time we report our Q3 result, we will be specific on the actual date the refinery will be ready for commissioning.