Seplat Petroleum Announce Interim Management Statement & Q3 2014 Results
Seplat Petroleum Development Company Plc (“Seplat” or the “Company”), a leading Nigerian indigenous oil and gas company, listed on both the Nigerian Stock Exchange and London Stock Exchange, today announces average working interest production for the first nine months of 29,014 boepd, up 8% from the same period last year, and maintains average working interest guidance of 29,000 to 33,000 boepd for the full year.
After lifting adjustments, crude revenue was US$576 million, 8% lower than in 2013 while gas revenue increased by 24% year-on-year to US$17 million. Net profit stood at US$228 million following one-off costs of US$54 million as reported in H1 2014. Absent these charges, net profit would have totaled US$282 million. The board of Seplat has agreed an interim dividend of US$0.06 per share. The Company has maintained a strong financial position with cash at bank of US$435 million at period end.
“We have continued to move the business forward in the third quarter. Production performance is strong and we are well capitalised to take advantage of the current and new growth opportunities available to us,” said Austin Avuru, Seplat’s Chief Executive Officer. “However, like all producers, we are closely monitoring the oil price environment and have challenged ourselves to respond by redoubling efforts to improve efficiency and maximise profitability,” he added. Information contained within this release is un-audited and is subject to further review.
· On track to deliver full year working interest production guidance of 29,000 – 33,000 boepd and target 2014 exit rate of 72,500 bopd
· Nine month working interest production of 29,014 boepd (compared to 26,989 boepd in 2013)
– Average working interest production during the third quarter 32,237 boepd (comprising 25,128 bopd liquids and 42.7 mmscfd gas)
· Reported production figures reflect 59 days of downtime on the Trans Forcados System (TFS) in the first nine months, of which 14 were in Q3. Excluding un-budgeted downtime of 33 days, average working interest production in the first nine months was 32,336 boepd (comprising 25,183 bopd liquids and 42.9 mmscfd gas)
· Deliveries to the Warri refinery via the new alternative export route, which mitigates sole reliance by the Company on exports via the TFS, increased in the third quarter – gross deliveries in the first nine months stand at 288,661 bbls
· Daily gross liquids production from OMLs 4, 38 and 41 exceeded 70,000 bopd for the first time on 2nd October
· During the first nine months, approximately 98% of liquids production from OMLs 4, 38 and 41 was transported through the TFS. This volume was subject to 10.14% reconciliation losses
· Average oil price realisation of US$109.9/bbl (2013: US$110/bbl), against an average price for Brent in the period of US$110.3/bbl (2013: US$113.86/bbl), and an average gas price of US$1.55/mscf (2013: US$1.43/mscf)
Drilling and capital projects update
· High levels of rig based activity continued in Q3 when the Company completed three oil production wells at Oben, one gas work-over well at Oben and one gas work-over well at Sapele
· First oil delivered from the Ovhor – Amukpe gaslift compressor on 11th October – commissioning work to enable continuous gaslift is ongoing
· The new 150 mmscfd capacity Oben gas processing plant has arrived in country and site preparation works at the field have been completed
· Modification work is ongoing at the liquid treatment facility to address issues with the composition of separated water to enable full continuous injection
· Construction and installation of two 50,000 bbl storage tanks at the Amukpe field progressing – first tank is nearing completion
· Actively pursuing a number of new venture opportunities that offer near term production, cash flow and reserve replacement potential – committed to maintaining price discipline with a focus on onshore and shallow water offshore areas
· Gross revenue for the first nine months was US$592.5 million (N92.0 billion) (2013: US$642.9 million (N99.9 billion))
– Crude revenue (after adjusting for changes in lifting) was US$575.6 million (N89.6 billion), an 8% decrease from the same period in 2013 (US$629.6 million (N97.8 billion)) mainly due to increased downtime in 2014
– Gas revenue was US$16.5 million (N2.6 billion), a 24% increase from the same period in 2013 mainly due to increased production from well work-overs, upgrade works on the Oben gas plant and higher offtake from the Sapele gas plant
· Working interest sales volumes during the first nine months increased marginally to 7.1 mmboe from 7.0 mmboe in 2013. The total volume of crude lifted in the first nine months was 5.3 MMbbls compared to 5.8 MMbbls in 2013. The 2013 liftings includes 0.74 mmbbls of returned MoU volumes from Shell in relation to settlement of a prior underlift position. Total gas volume sold was 10,223,406 scf (2013: 6,775,152 scf).
· Nine month profit after tax was US$227.9 million (N35.4 billion) (2013: US$442.2 million (N68.7 billion))
– Decrease year-on-year due to deferred tax liabilities of US$92.7 million (N14.4 billion) released in Q3 2013 as a result of pioneer status being granted to the Group, lower crude revenue in 2014 as explained above and US$54 million (N8.4 billion) of one-off general and administration costs in relation to financing, regulatory, procurement and staff costs in 2014
– On a normalised basis (for costs only) nine month profit after tax was US$282 million (N43.8 billion) (2013: US$349 million (N54.2 billion))
· Strong financial position – cash at bank US$435 million with a further US$453 million placed as a refundable deposit against potential investment; debt repayment of US$39 million in Q3 reduced gross debt to US$590 million
· Re-financing and up-sizing of existing debt facilities in progress – engaged with several local and international financial institutions
· Capital investments of US$123 million in the first nine months funded by net operating cash flow before working capital of US$283 million; maintain full year capex expectation of around US$250 million
· The outstanding NPDC receivable at 30 September was US$418 million (N64.9 billion), consisting of both current year performances and outstanding payments brought forward from prior period performances
– US$232 million (N36 billion) approved as cash calls for 2014
– US$186 million (N28.9 billion) still undergoing various approval levels within NPDC
– US$30 million (N5 billion) from approved performance in prior years has been bought forward and US$347 million (N54 billion) has been added to performance in 2014
– Total of US$240 million (N37billion) collected by the Company as cash calls from NPDC during the first nine months
– US$28 million (N4.3 billion) has been received post period end. Plans are being implemented to ensure timely recovery of remaining outstanding balances
Payment of interim dividend
· The board of Seplat has agreed an interim dividend of US$0.06 per share. The dividend will be paid on or shortly after 24 November 2014 to shareholders on the register at the close of business on 6 November 2014. All shareholders will be paid their dividends in US Dollars. The Nigerian shareholder register will be temporarily closed on 7th November 2014 to enable the Company’s registrar, DataMax Registrars Limited (“DataMax”), to prepare for the payment of the interim dividend.
· Seplat shareholders who are yet to provide their account details for the direct credit of the interim dividend payment should provide necessary information to DataMax. Holders of Depositary Interests on the London Stock Exchange should contact the Company’s UK depositary, Computershare.
This information is provided by RNS
The company news service from the London Stock Exchange