BY: CHARLES ABUEDE
Seplat Energies has given a production guidance of 60,000 boepd on a working interest basis following its recent $1.28 billion acquisition of Mobil Producing Nigeria Unlimited (MPNU); as well as a 38 percent year on year increase to $733 million in its 2021 revenues, the company stated in its published audited full-year earnings results on the Nigerian and London Stock Exchanges, respectively.
According to the leading Nigerian independent energy company, it recorded a 128.9 percent year on year increase in gross profit to N114.2 billion while the profit before tax rose 321.9 percent to N71 billion. As a result, it has proposed $2.5 cent per share as dividends for the fourth quarter, while the company’s balance sheet remains strong with $341 million cash at bank, net debt of $426 million with strong cash generation of $394 million against CAPEX of $137 million which excludes the cost of rig acquisitions.
Commenting on the results, Roger Brown, chief executive officer, Seplat Energy Plc, said: “Seplat Energy announced a major acquisition last week and despite a challenging year for Nigerian oil and gas, the robust results delivered today clearly show how our increasing financial strength has made such an acquisition possible, without the need to dilute shareholders, by giving international financial partners the confidence to invest in our vision.”
On the recent acquisitions independent energy company, Brown avowed that, “The addition of MPNU nearly trebles our production and doubles our reserves on a pro forma 2020 basis, reinforcing our leadership of Nigeria’s indigenous energy sector and enabling us to generate strong future cash flows that will underpin our investment in Nigeria’s energy transition and improve our overall stakeholder returns.
“Our 2021 performance was affected by outages at Forcados Terminal that will no longer have such an impact when we switch to the new Amukpe-Escravos Pipeline, which we expect to launch in March. This is part of our strategy to diversify and derisk routes to market, assuring higher revenues from significantly better uptime and lower reconciliation losses. Furthermore, once we have completed our acquisition of MPNU, we will add significant production from offshore assets with dedicated export terminals that also have higher availability and lower reconciliation losses.
“The addition of MPNU offers a significant undeveloped gas resource base which, alongside our ANOH gas project development, will underpin Nigeria’s energy transition and drive domestic and export revenues when developed,” Brown said.
Elsewhere, on the outlook for the company in 2022, Seplat disclosed that it expects its production to hit 50-60 kboepd, comprising 30,000 to 35,000 bopd liquids and 116 to 150 MMscfd (20,000 to 25,000 boepd) gas production.
“We expect production uptime of 75 percent for evacuation through the TFS and 90 percent for evacuation via the AEP, the latter being our preferred export route from OMLs 4, 38, & 41. Capital expenditure for 2022 is expected to be around $160 million. We expect to drill a minimum of ten wells, including the Sibiri exploration well and one appraisal well, complete ongoing projects, invest in maintenance CAPEX to secure the existing assets and continue investments in gas. The 2022 drilling programme is designed to address production decline and along with completion of maintenance activities, will support long-term production levels from the assets. With the recovery in oil prices, rig-based and other project activities will ramp up in 2022.
“Facilities and engineering projects will focus on the delivery of an upgraded integrated gas processing facility at Sapele and further upgrades to the liquid treatment facility to enable increased deliveries of dry crude. Towards our goal to end routine flaring by 2024, we will focus on Oben, Amukpe, Sapele & Jisike end of routine flaring projects, which will capture and monetise gas for productive use. In OML 53, in addition to drilling, we plan to complete the Jisike flow station debottlenecking and gas lift compressor station and installation of the Ohaji South Lease Automatic Custody Transfer (LACT) Unit.
“For the non-operated assets, in OML 40, in addition to the drilling plans, facilities and engineering work will focus on the Gbetiokun facilities upgrade to optimise the Gbetiokun barging operations; whilst we complete all front-end activities for the Gbetiokun to Adagbasa pipeline which will replace the barging of the produced crude.
In OPL 283, we have planned one gas well re-entry for production testing and the Igbuku gas plant design (FEED). The delivery of the 2022 Work Plan will be underpinned by a strong commitment to safety, asset integrity, GHG emissions reduction and operational excellence,” the company disclosed.
Meanwhile, it disclosed that the next step in the MPNU project will focus on the government for approvals while the transition planning and completion are expected by the second half of 2022.