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Seplat Petroleum announces 2018 financial results, operational update

Seplat Petroleum Development Company, a Nigerian indigenous oil and gas company, has announced its full financial results for 2018 and provided an operational update

Commenting on the results Austin Avuru, Seplat’s CEO, 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.”

“At our core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that we can confidently plan and invest long into the future to realise the full potential of those blocks. As we continue to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board took 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 our gas business,” he added.

“Disciplined capital allocation continues to remain at the core of our activities evidenced by our continual deleveraging of our debt levels to the current balance of US$350mn. In 2018, we 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,” he explained.

Seplat’s full-year 2018 financial results include:

-A full-year working interest production of 49,867 boepd (comprising 25,669 bopd liquids and 145 mmcfd gas) within guidance range of 48,000 – 55,000 boepd

-License renewal for OMLs 4, 38 and 41 obtained with a new expiry date of 21 October 2038. US$25.9mn renewal bonus paid ensuring all conditions have been met (renewal bonus included in 2018 capex)

-2019 production guidance set at 49,000 boepd to 55,000 boepd (liquids production range of 24,000 bopd to 27,000 bopd and gas production range of 146 mmcfd to 164 mmcfd)

-Full-year revenue US$746mn; operating profit US$310mn, profit before deferred tax US$238mn; after adjusting for deferred tax of US$91mn, net profit after tax stood at US$147mn

-The board has recommended a final dividend of US$0.05 per share.

-Successfully concluded debt refinancing in Q1 2018, including debut US$350mn bond which diversifies the long-term capital base and new four year US$300mn RCF

-Cash at bank US$585mn and gross debt US$450mn resulting in a net cash position of US$135mn at end 2018

-Final investment decision sanctioned by Seplat’s board for the ANOH project post period end; Phase I to comprise a 300 mmcfd gas processing plant with accommodation space for future expansion

-Amukpe to Escravos alternate export pipeline nearing completion; anticipated to be fully commissioned and operational in Q2 2019, ramping up to initial permitted capacity of 40 mblpd during Q3 2019; access to three separate export routes at our western assets and two at our eastern assets providing adequate redundant capacity will significantly de-risk distribution of oil production to market.