The board and management of Seplat Petroleum Development Company Plc have assured shareholders that the growth in the operations of the leading indigenous oil and gas company will lead to increased dividend payouts and share price appreciation in the years ahead.
At the annual general meeting yesterday in Lagos, the company reiterated its commitment to stronger growth in the oil and gas sector and increased returns to its shareholders.
Addressing the shareholders, Chairman, Seplat Petroleum Development Company Plc, Dr Ambrose Orjiako, said the company’s 2018 operational and financial performance reflected the significantly higher levels of production uptime at its core oil producing assets combined with a firmer, albeit still volatile, oil price and increased contribution from the company’s gas business.
He noted that the company’s results from the previous two years were characterised by the extended period of force majeure at the Forcados terminal from February 2016 to June 2017, pointing out that stable operations have positioned the company to deliver better results.
“As we enter 2019, our reliable production base, low unit cost of production and discretion over capital commitments will allow the business to remain highly free cash flow generative and profitable. In the absence of any major interruption or force majeure event, this will enable Seplat to honour its dividend policy and provide an attractive yield to our shareholders in addition to the potential for capital appreciation,” Orjiako said.
He said the company would selectively invest in low risk oil production drilling opportunities within the existing portfolio and the continued expansion of the gas business, with 2019 set to be the year that activity intensifies at the large scale Assa-North and Ohaji-South (ANOH) gas and condensate development.
According to him, Seplat remains an ambitious growth-orientated company that is in a position of strength to capture inorganic opportunities where it can leverage its competitive advantages to seek out carefully considered, price disciplined and value accretive acquisitions.
Chief Executive Officer, Seplat Petroleum Development Company Plc, Mr. Austin Avuru, said Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation providing us with an extremely solid foundation for growth in the coming years.
According to him, at the company’s core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that it can confidently plan and invest long into the future to realise the full potential of those blocks.
He outlined that as the company continues to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board had taken the final investment decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for its gas business.
According to him, disciplined capital allocation continues to remain at the core of the company’s activities evidenced by its continual deleveraging of its debt levels to the current balance of $350 million.
“In 2018, Seplat reinstated the dividend, increased capital investments and with the resources and headroom in our capital structure, we are equipped to capitalise on organic and inorganic growth opportunities as they may arise,” Avuru said.
He also announced that Seplat board has taken the final investment decision for the ANOH and Amukpe to Escravos alternate export pipeline which will be completed and fully commissioned in second quarter of 2019.
“These projects are part of the future expansion initiatives of Seplat in Nigeria’s oil and gas industry,” Avuru said.
Seplat posted N228 billion turnover in the year ended December 31, 2018, 65 per cent growth on N137 billion recorded in the 2017. Profit before differed tax stood at N73 billion, indicating 480 per cent increase on N13 billion recorded in 2017.
A review of Seplat 2018 results indicated positive performance across most financial indices, confirming the company’s position as one of the well managed indigenous oil firms in Nigeria. Gross profit grew by 84 per cent to N120 billion from N65 billion reported in 2017.
Operating profit stood at N95 billion, representing a growth of 177 per cent on N34 billion recorded in 2017. Seplat’s net profit after tax however dipped by 45 per cent from N81 billion to N45 billion. in December 2018. Seplat is paying a final dividend of $0.05 per share to all its shareholders.
SOURCE: oglinks.news