Seplat Petroleum Development Company Plc,Nigerian independent energy company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), has announced its audited results for the financial year ended 31 December 2020, recording a revenue of $530.5 million “with increased operational efficiencies and further reduction in costs”.
A statement explained that the Company also recommended a final dividend of $0.05 per share ($0.10/share for full year) and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $265.8 million, operating profit of $121 million (before non-cash impairments and unrealised fair value losses).
The statement added: “Strong cash position of $259 million after $100 million RCF repayment, $58 million dividends paid in the year, and $150 million capex. Net debt stood at $440 million with most maturities after 2021”.
Commenting on the results, which were released to the NSE and LSE on Monday, Mr. Roger Brown, the Chief Executive Officer of the Company, said: “2020 was a challenging year for the Company but Seplat has once again shown its resilience and ability to overcome challenges and deliver production in line with guidance, operating with minimal incidences of COVID-19 cases.
“From the $330 million of cash generated from operations, we have increased our capital investment, invested in ANOH and voluntarily paid down $100 million of debt, further deleveraging the balance sheet. Despite seeing the lowest oil prices in our 10-year history, we have continued to honour our commitment to shareholders of a regular income stream on their investment, by maintaining a total dividend of $0.10 per share for the year.”
The SEPLAT CEO explained: “Gas is the lower-carbon feedstock for affordable electricity for Nigeria’s young and rapidly-growing population. Seplat is leading Nigeria’s transition away from spending scarce foreign currency on imported, expensive, high-emission diesel-generated electricity and we believe this will provide the necessary baseload for a functioning electricity grid that will allow renewable energy to take its place, as we see in the developed world, which in large parts is still fueled by coal. The energy transition in Nigeria must balance both the environmental and the social agenda.
“Our flagship ANOH project, with the Nigerian Gas Company, is now fully funded and we have made excellent progress in difficult times, with major gas processing units expected to arrive in Nigeria in Q3 2021, installation to commence before the end of the year, mechanical completion and pre-commissioning in Q1 2022 and first gas flowing to customers before the end of H1 2022, at a lower expected cost of up to $650 million.”
“We remain committed to providing shared value for all of our stakeholders. During the year, with our Government partners, we provided medical beds and other palliatives to our communities and we have committed to constructing a 200-bed infectious diseases hospital. Seplat continues to focus on employment opportunities for communities, education, healthcare and knowledge transfer and local capacity development,” Brown added.
Outlook for 2021
For 2021 we expect to produce an average of 48,000 – 55,000 boepd, taking into account the impact of OPEC+ quotas. 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 have significant cash resources and will continue to manage our finances prudently in 2021, expecting to invest $150 million of capital expenditure across the full year. We remain confident that our ongoing cost-cutting initiatives and prudent management of cash will enable further reductions in debt, whilst supporting dividend payments and investment for growth.
Following its successful funding, the completion of the ANOH project remains a major priority. Although we expect some COVID-19 related delays to push completion into early 2022, following a cost optimisation programme we now expect the project to cost no more than $650 million, substantially below the $700 million budget previously stated at Final Investment Decision (FID).
