Seplat increases the gas and ensures the name change
Seplat Petroleum ramped up production in the first quarter and plans to change its name to Seplat Energy.
The company produced 48,239 barrels of oil equivalent per day in the first quarter, rising to nearly 54,000 bpd in early April. Liquids were down 13.2%, due to delays in installing a new storage system for OML 40. However, gas production increased by almost 30%.
Revenue increased 16.8% to $ 152.4 million from $ 130.5 million.
Production increased with the return of the Gbetiokun field, said Seplat CEO Roger Brown. “We are currently achieving average daily volumes of almost 54,000 bpd so far in April and we will continue this momentum by adding additional oil and gas wells this year.”
Seplat guided an average production of 48,000 to 55,000 bpd.
Brown went on to say that the name change was intended to be linked to changing domestic needs in Nigeria.
“The energy transition – which achieves Nigeria’s social development goals in tandem with the climate agenda – is essential. This is the backbone of Seplat’s strategy and we will communicate how we plan to achieve it over the next few months, ”he said.
Shareholders will vote on the name at the annual general meeting on May 20. The company is also planning to hold a financial markets day on July 29.
The ANOH project is a “top priority” for the company. COVID-19 has caused delays, pushing back the first gas to the end of the first half of 2022. However, costs have been reduced to $ 650 million, from the $ 700 million budgeted in the final investment decision (FID ).
Shell Petroleum Development Co. (SPDC) manages the upstream side of ANOH. He plans to complete four wells this year and has started this work. Seplat expects the gas processing units to arrive in the third quarter and begin installation before the end of the year.
Seplat’s joint venture on the ANOH gas project raised $ 260 million in debt financing in February. The company also issued a $ 650 million Eurobond in March. The bond was used to repay existing senior notes and repay a revolving credit facility.
“We continue to hedge against oil price volatility and expect a higher proportion of revenue to come from long-term gas contracts at stable prices,” said Brown.
Capital spending is expected to rise to $ 150 million this year, of which $ 33 million has already been invested. Brown said the company will continue to cut costs and manage cash flow to “enable further debt reductions, while supporting dividend payments and investments for growth.”
Net debt is $ 458.1 million, while cash in the bank is $ 236.3 million.
During the first quarter, Seplat completed the Oben-50 gas well, which is currently in production. The Oben-51 is expected to start production in May. The company plans to drill an exploration well at Sibiri, formerly known as Amobe, this year.