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Full Year 2019 Financial Results

Released 07:00 23-Mar-2020

RNS Number : 1645H
Seplat Petroleum Development Co PLC
23 March 2020

Seplat Petroleum Development Company Plc


Audited Full Year Results


For the year ended 31 December 2019
(Expressed in Naira and US Dollars)


Please see the Full Audited Results in attached PDF


Seplat Petroleum Development Company Plc

Audited results for the year ended 31 December 2019 

Lagos and London, 23 March 2020:  Seplat Petroleum Development Company Plc ("Seplat" or the "Company"), a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, today announces its audited results for the financial year ended 31 December 2019.  





·      Revenue of US$698 million down 6.5% on lower production and oil price

·      Profit before deferred tax of US$270 million, up 13.4% 

·      Total capital expenditure of US$125 million, US$114 million on oil and gas assets

·      Cash flow from operations US$338 million

·      Cash at bank US$333 million

·      Final dividend maintained at US$0.05 per share   



·      Low unit cost of production at US$6.20/boe

·      Working interest production 46,498 boepd in line with 2019 revised guidance of 45,000 - 48,000 boepd

·      Liquids production of 23,935 bopd

·      Gas production of 131 MMscfd

·      FID taken for 300MMscfd ANOH gas processing facility; first gas now expected Q4 2021


Landmark acquisition of Eland Oil & Gas PLC

·      Increases Seplat's WI liquids production by 9Kbopd, increases WI 2P liquids reserves by 36MMbbls

·      Loan due from Elcrest to Eland of US$414 million at year end; loan maturity 31 December 2024

·      Adds upside potential from unappraised discoveries e.g. Amobe, plus new export routes

·      Eland achieved a record day's WI liquids production of 17 kbopd on 17 March 2020.



·      Expected production of 47-57 kboepd (inc. Eland 6-10kbopd) for full year, subject to market conditions 

·      1.5MMbbls/quarter hedged at US$45/bbl from Q1 to Q3 2020

·      Significant cash balance available

·      Low cost of production enables profitability at levels below current oil price

·      2020 expected capex of US$100 million; US$50 million of which spent in YTD.

·      Manage 2020 drilling programme to suit market conditions and preserve liquidity, minimum three wells


Austin Avuru, Chief Executive Officer, said:

"As we enter a challenging phase for the global economy, Seplat will benefit from being a resilient company built on the solid foundations of prudent financial management and the careful mitigation of risk. 

We have previously been tested by crisis. We successfully navigated the twin challenges of the 2014/2015 oil price shock, which was immediately followed by the 16-month Trans Forcados shut-in, which drastically reduced our liquids production. Thanks to our flexibility in managing cash flows we emerged a stronger and better-funded company, ready to take advantage of new opportunities.

Compared to those difficult periods, today's Seplat has more cash on its balance sheet and is even more robust and diversified thanks to our continuing investments in gas, with its long-term contracts and independence from oil price volatility. We are a low-cost producer and will continue to manage our finances prudently.   

With the recent addition of Eland and the availability of new pipelines, our oil business is broadening and derisking its production fields and routes to market to assure even greater security of revenues in the future. In the coming year we will focus our investment only on the highest-returning projects, whilst carefully balancing our future needs with prevailing market realities. The challenges before us may be significant, but we are confident that the resilience and discipline of our business will help us consolidate our position as Nigeria's leading independent oil and gas producer."


Summary of performance



US$ million




FY 2019

FY 2018

% change

FY 2019

FY 2018







Gross profit






Operating profit






Profit before deferred tax






Operating cash flow






Working interest production (boepd)






Average realised oil price (US$/bbl)






Average realised gas price (US$/Mscf)







Outlook for 2020

The emergence of the COVID-19 pandemic in the first quarter of 2020, as well as pressure on oil prices in March, have placed a premium on solid financial management that focuses upon low-cost production, robust cash management, a strong balance sheet and focused investment in high-return projects for sustainable future growth.  

The business is hedged against low oil prices and a significant proportion of our revenues now come from gas, which offers further protection from oil price volatility. The Company has low production costs and can remain profitable even at lower oil prices. We have significant cash resources available and will manage our finances prudently in 2020, expecting now to invest just $100 million of capital expenditure ($50 million spent in Q1 2020), with a target of three new wells across our portfolio. We will also continue to focus on our investments in gas and the completion of the ANOH project remains a major priority.

At present we are targeting 2020 production of between 47-57 kboepd, including Eland production of 6-10 kbopd, subject to continuous evacuation being possible.

Seplat has been tested in previous adverse conditions and we are confident that the stronger and more diverse business we operate today will be even more resilient against these unprecedented market events. The integration of Eland Oil & Gas PLC will position the Group strongly when the market recovers and we are pleased to report that on 17 March 2020, OML 40 produced a record 17 kbopd as recorded by its LACT. We remain optimistic about our long-term growth and success.    


Webcast and conference call

At 09:00 am GMT (London) / 10:00 am WAT (Lagos), Austin Avuru (CEO) and Roger Brown (CFO) will host a webcast and conference call to discuss the Company's results. Access details are:

Telephone number (UK toll free and international access): +44 (0) 203 059 5869

The Company requests that participants dial in 10 minutes ahead of the call. When dialing in, please state the title of the call: " Seplat Petroleum 2019 Full Year Results" when prompted by the operator.

The webcast can be accessed via the Company's website or at the following address:  

If you are listening to the audio commentary and viewing the webcast, you may notice a slight delay to the rate the slides change on the webcast.  If this is affecting you, please download the pdf slide pack from the Company's website 



Seplat Petroleum Development Company Plc

Roger Brown, Chief Financial Officer

Carl Franklin, Head of Investor Relations

Ayeesha Aliyu, Investor Relations

Chioma Nwachuku, General Manager, External Affairs & Communications


+44 203 725 6500



+234 1 277 0400

+234 1 277 0400

FTI Consulting

Ben Brewerton / Sara Powell

+44 203 727 1000

Citigroup Global Markets Limited

Tom Reid / Luke Spells

+44 207 986 4000


Investec Bank plc

Chris Sim / Tejas Padalkar

+44 207 597 4000


Notes to editors

Seplat Petroleum Development Company Plc is Nigeria's leading indigenous oil and gas exploration and production company. It is listed on the Nigerian Stock Exchange (NSE: SEPLAT) and the Main Market of the London Stock Exchange (LSE: SEPL).

Seplat is pursuing a Nigeria-focused growth strategy and is well positioned to participate in future asset divestments by international oil companies, farm-in opportunities and future licensing rounds.  For further information please refer to the Company website,


Important notice

The information contained within this announcement is unaudited and deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

Certain statements included in these results contain forward-looking information concerning Seplat's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which Seplat operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within Seplat's control or can be predicted by Seplat. Although Seplat believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Seplat or any other entity, and must not be relied upon in any way in connection with any investment decision. Seplat undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.


Operating review

Working interest reserves



Working interest 2P reserves at 1/1/19


Working interest 2P reserves at 1/1/20





Oil equivalent




Oil equivalent


Seplat %








OMLs 4, 38 & 41









OPL 283









OML 53









OML 55

Financial interest








OML 40





























Seplat's working interest 2P reserves, as assessed independently by Ryder Scott at 1 January 2020, stood at 474 MMboe, comprising 216 MMbbls of oil and condensate and 1,494 Bscf of natural gas. This represents an organic decrease in overall 2P reserves of 1.5% year-on-year, due to production but mitigated by movements from the contingent resource category. Working interest 2C resources stood at 85 MMboe, comprising 53 MMbbls of oil and condensate and 188 Bscf of natural gas.

Separately, as assessed independently by Netherland Sewell & Associates Inc. (NSAI) at 1 January 2020, Eland Oil & Gas Ltd's working interest 2P reserves stood at 36 MMbbls, with 2P reserves + 2C resources at 56 MMbbls. Note that Eland has a 45% Working Interest in OML40 until the Westport loan is fully repaid by end of 2024 in accordance with the loan agreement ($414 million loan balance as at 31 December 2019), reverting to 20.25%.  Ubima has a 88% Working Interest in the Ubima marginal field until the carry has been reached, reverting to 40%.  NSAI has assessed the effective WI interest to be 34.9% and 74.1% respectively.

Consequently, following the recent business combination, the enlarged Group's working interest 2P reserves and 2C resources increased to 615 MMboe at 1 January 2020, comprising 326 MMbbls oil and condensate and 1,682 Bscf of natural gas.


Working interest production for the 2019 financial year










Oil equivalent




Oil equivalent


Seplat %








OMLs 4, 38 & 41









OPL 283









OML 53



















(1)       Liquid production volumes as measured at the LACT unit for OMLs 4, 38 and 41 and OML 152 flow station.  Volumes stated are subject to reconciliation and will differ from sales volumes within the period. 


Full-year average working interest production for 2019 was within revised guidance and stood at 46,498 boepd, which represents an overall decrease of 6.8% year-on-year. Within this, liquids production was down 6.8% year-on-year whilst gas production was down 9.7% year-on-year. Full-year production guidance on a working-interest basis was revised in the third quarter, following slippage to the intended production drilling programme as a result of rig mobilisation delays. The figures do not incorporate Eland Oil & Gas PLC's production for the period, which was 8,963 bopd.

Production uptime stood at 92%, whilst the overall reconciliation losses arising from use of third-party infrastructure were around 12% for the year.



Oil business performance

Seplat's oil operations produced an average 23,935 bopd on a working interest basis during 2019, down 6.8% on 2018 because of the delays to drilling mentioned above. By the second half of the year, four drilling rigs (two land rigs, one swamp barge and one workover rig) were operational to drill out the revised capex programme with eight oil wells including five new drills and three workovers executed in 2019. The wells flowed at a combined initial rate for the joint venture of approximately 18,700 bopd. Two additional oil wells and one gas well were spudded in the fourth quarter of 2019 and completed in the first quarter of 2020.

The average price realised per barrel in 2019 was $64.40 (2018: $70.10).


OML 4, 38 & 41

Seplat holds a 45% working interest in OMLs 4, 38 and 41, with the NPDC holding the remaining 55% interest.

On OML 4, the partners drilled a new gas production well at Oben-48, which came onstream in the first quarter of 2020.

On OML 38, further to the earlier commissioning of the liquid treatment facility ('LTF') at the Amukpe field, the Company undertook a crude quality upgrade project aimed at achieving an export grade specification of 0.5% BS&W maximum and produced water injection of ca. 25kbwpd. By doing this, Seplat has scope to eliminate the cost component of crude handling charges that have historically been incurred for exporting wet crude to the Forcados terminal and free up additional ullage on the export pipeline for dry crude. During the year, phase one and phase two were completed, which enabled the Company to achieve a short-term solution to deliver 40kbwpd of injectable treated water. Modifications can now allow for more than 40kbopd of dry crude.

The two development wells completed in the period, Ovhor-18 and Ovhor-19, came onstream at an average rate of 3.9kbopd.

On OML 41 the ongoing focus was on full development of Sapele Shallow, which overlies the productive reservoirs in the main Sapele field and is estimated to hold a significant accumulation of oil (around 500 MMbbls STOIIP).

In H1 2019 it was necessary for the Company to delay drilling of the planned Sapele oil production wells due to requirements for the drilling contractor to undertake safety upgrades on the allocated 2000 HP rig.

In addition to the Trans Forcados Pipeline system and the back-up export via the Warri refinery, the Amukpe to Escravos pipeline is set to provide a third export option. The pipeline owners, NAPIMS and contractor FENOG are responsible for completion of the pipeline, which has seen significant delays to date. The 67km pipeline has been hydrotested and is now being dewatered and prepared for production operations. The completion works (at a cost of around $0.5m), includes the accommodation of final change to the tie-in location of the production line, installation of the Chevron check meters, completion of the Fire and gas system and commissioning of the LACT fiscal meter.  Commissioning is expected to occur during H1 2020.

Liquid Treatment Facility Phase 3, which constitutes the final stage of completion of the upgrade project, will begin in 2020 and includes the expansion of Produced Water Management with new water injection wells and water injection infrastructure.


OPL 283

Seplat holds a 40% working interest in OPL 283, alongside partner Pillar Oil.

The Igbuku 3D seismic data acquired by Pillar-Newton JV was interpreted and formed the basis for the Integrated Petroleum Engineering Studies (IPES) concluded in 2019. The studies and ongoing Field Development Plan will underpin the Igbuku gas development. Further to the Anagba-1 appraisal well, Pillar-Newton JV and other Partners have executed the Ashaka/Anagba PUA, which was forwarded to NAOC to finalize with NNPC. Ashaka/Anagba production allocation to Pillar-Newton JV is expected once all agreements are concluded.


OML 53

Seplat has a 40% working interest in OML 53 alongside its partner the NNPC. Apart from its oil, OML 53 has a substantial gas reserve that will provide feedstock for the ANOH gas processing plant that Seplat is building in partnership with the National Gas Company (NGC).

Seplat undertook a rig-based re-entry and completion of two wells drilled by the previous operator at the Ohaji South (OHS) oil field. The two wells came onstream in 2019 at an average production rate of 5.8 kbopd. In addition to the two OHS wells, the Company carried out workover operations on Jisike-6, thus ramping up production in the acreage from ca.2.5 kbopd to achieve an exit rate of ca. 9.0 kbopd. Other projects carried out during the year were focused on supporting production from OHS field, which included the development of new infrastructure (installation of a 10 kbopd EPF, construction of 4" x 4.5 km flowlines, 6" x 12 km bulkline and 4" x 12 km test line and installation of a production manifold at OHS field).

In line with the Company's strategy to establish multiple evacuation routes, Seplat plans to construct a crude export line to convey production from OHS field into Ebocha-Brass Trunkline via Ebocha manifold. This will provide an alternate evacuation route to Brass Terminal and thereby help alleviate production deferment in the field.

At ANOH, preparation of the well locations is to be completed and two wells are planned to be drilled by the upstream operator, SPDC. With civil works commenced, materials are expected on site by the third quarter, towards the Q4 2021 revised commissioning date.


OML 55

In accordance with the revised commercial arrangement that was agreed in July 2016, which provides for a discharge sum of US$330 million to be paid to Seplat over a six-year period through allocation of crude oil volumes produced at OML 55, Seplat received payments amounting to US$36 million in 2019. Total payments received from inception to the end of 2019 stood at US$120 million and the outstanding discharge sum to be paid to Seplat is US$210 million. The 40% operated interest in OML 55 continues to be jointly controlled by Seplat and Belemaoil over the period of this arrangement through an Asset Management Team comprising representatives of both parties.

In 2020, Seplat will continue to monetise liftings towards full recovery of the US$330 million discharge sum.


Acquisition of Eland Oil & Gas PLC

On 17 December 2019, Seplat completed the acquisition of Eland Oil & Gas PLC, which holds a 45% interest in Elcrest, a company which has a 45% interest in OML 40. Since inception, Eland has been the sole funder of Elcrest through its 100% owned subsidiary Westport, which acts as a lender.  The year-end balance on the Westport loan was US$414 million and the loan is due to be fully repaid by 31 December 2024.  While the loan is outstanding, Eland will continue to consolidate 100% of Elcrest into its accounts.  On full repayment of the loan, the working interest will revert to 20.25%.  Eland also has a 40% interest in the Ubima marginal field and is carrying the cost of the development in return for a 88% WI until the carry has been reached.

This acquisition has materially enlarged our inventory of production, development, appraisal and exploration opportunities. Eland's asset management structure fits into Seplat's existing structure well and Seplat's knowledge of Eland's producing assets and operations has enabled an efficient process of integration.

The integration process will be implemented over the course of the year and is being led by an expert team that consists of technical, finance and operations personnel. The integration is proceeding well, achieving synergies, pooling of resources, increased efficiency of operations and streamlining of procedures.

Eland's working interest production averaged 8,963 bopd for the year and has not been reflected in these results given that the acquisition became effective on 31 December 2019. Eland's production will be consolidated from January 1, 2020.


OML 40 activities

In 2019, first production from the Gbetiokun oil field was achieved in July via the 22,000 bopd early production facility ("EPF"), which will process all reservoir fluids produced under the initial phase of the Gbetiokun development. While the permanent export solution is progressed, evacuation of processed crude will be via shuttle tankers from Gbetiokun to the injection point on the main OML 40 export pipeline.

The Gbetiokun-3 well was completed early in the year as a dual string producer. The Gbetiokun-4 development well was spudded in July, but completion operations were suspended due to technical issues. Additional equipment and resources required to complete the operation were not available in Nigeria and therefore the next planned development well, Gbetiokun-5, was spudded while completion equipment for Gbetiokun-4 was sourced.

Dredging activities to allow rig access for Eland's first exploration well on the Amobe prospect advanced during the year along with other preparatory activities for drilling of the high-impact, near-field prospect. Amobe carries an unrisked best estimate gross prospective oil resource of 78 MMbbls.

With the OES Teamwork drill rig deployed on other projects within the block, the Opuama focus was on reservoir management ranging from incorporation of recent drill well results in subsurface models, production monitoring, well optimisation and the identification of further opportunities to increase overall recovery.


Update on export routes

The Company's strategy to create multiple export routes for its assets has resulted in actively pursuing alternative crude oil evacuation options for production at OMLs 4, 38 and 41 and potential strategies to further grow and diversify production in order to reduce any over-reliance on one particular third-party operated export system.

In line with this objective, the Company has retained access to two jetties at the Warri Refinery that will enable sustained exports of 30,000 bopd (gross) if required, should there be problems with the primary export route, the Trans Forcados Pipeline (TFP). However, it was not necessary for the Company to activate this alternative export route during 2019 as the uptime on the TFP was at 92%. Security initiatives undertaken by the Nigerian government as well as existing strategies held in place by the Company have ensured that minimum downtime was experienced on this previously troubled route.

In 2020, the Amukpe to Escravos pipeline is set to provide a third export option for liquids production from OMLs 4, 38 and 41. While completion work on the 160kbopd pipeline has been slower than anticipated due to delays in the contractor delivery schedule, final activities including the installation of the LACT unit are progressing well. We expect that the pipeline will be commissioned during the first half of 2020 and become fully operational to the initial permitted volume for the Seplat / NPDC joint venture of 40 kbopd.

In addition, the acquisition of Eland Oil & Gas PLC provides a separate export route from OML 40 along the Trans Escravos Pipeline (TEP), thereby assuring exports do not use the Trans Forcados Pipeline, which suffers from higher reconciliation losses and downtime. There is an option being explored to connect the AEP line to the TEP through a short 8k spur providing an additional route for OML4,38 and 41 production. In addition, an option exists to combine the production and secure an offshore Floating Production Storage and Offloading (FPSO) facility and use it as a crude oil export terminal. This should significantly improve sales volumes by reducing downtime and reconciliation losses currently experienced by using third party infrastructure, which are budgeted to be on average an aggregate of 30% per annum. A dedicated team is developing the export options and we will communicate the details in due course.


Gas business performance 

Alongside the oil business, the Company has also prioritised the development and commercialisation of the substantial gas reserves identified at its blocks. Today, the Company is a leading supplier of processed natural gas to the Nigerian domestic market.

In 2019, Seplat's working interest production was 131 MMscfd at an average selling price of US$2.84/Mscf.  


Oben Gas Plant 

The gas projects planned for 2019 were pushed into 2020 when the Company prioritised oil development drilling that would immediately impact on production, following rig mobilisation delays that compressed the initial work programme for the full year of 2019 to just the second half. Therefore, the focus for gas in 2019 was the drilling of the Oben-48 well, which came onstream in the first quarter of 2020.

During the period, an agreement was reached with NPDC in the operating committee to back in their rights to 55% of the Seplat sole risk funded Oben gas plant 375MMscfd capacity expansion completed in 2015. The transfer of NPDC's 55% interest was concluded in H2 2019 at a total agreed payment of US$168million, US$67million reflecting past gas tolling charges and a balance of US$101 million.


Sapele Gas Plant

Works commenced towards the new Sapele integrated gas processing facility, which will increase processing capacity from 60 MMscfd to 75 MMscfd. During the year the Front-End Engineering Design (FEED) and Layer of Protection Analysis (LOPA) were completed and the decommissioning of the existing facility began in the final quarter. With the decommissioning of the existing facility ongoing, the Company will take delivery of the major upgrade packages and commence installation at the end of 2020. The project completion date is expected to be first half 2021.


ANOH gas plant development

The ANOH gas plant development at OML 53 (and adjacent OML 21 with which the upstream project is unitised) will drive the next phase of growth for Seplat's expanding gas business. The project will comprise a Phase One 300 MMscfd midstream gas processing plant.

In March 2019, the Seplat Board announced that it had taken the Final Investment Decision ('FID') to proceed with the ANOH project. The upstream development, including the drilling of 6 production wells, will be delivered by the upstream unit operator SPDC.

The project, managed by the AGPC project management team, is on budget, with site clearing completed in May 2019. Key contracts to supply gas process modules were awarded to GPS, while specialist rotating equipment was awarded to PCSNL, a subsidiary of Baker Hughes (GE). The Integration Detailed Engineering Design was awarded to International Engineering Services Ltd (IESL/Doris).

The civil foundation works, plant roads and drainage contracts were awarded to local contractors Zerock Construction Nigeria Ltd and Kenno-Mena Ltd. Some 60% of the Model and Design Review of gas process modules has been completed, with first steel cutting and commencement of fabrication of gas process modules achieved in December 2019.

The total project cost is budgeted at US$700 million. At year end, NGC and Seplat each made an equity investment of US$150 million (US$300 m combined). Seplat and NGC will each contribute a further US$60 million equity investment (US$120 million total) in 2020 with accompanying debt funding to be finalised.  

Having reviewed the construction schedule and progress on the OB3 gas pipeline, the project completion date has been revised from Q1 2021 to Q4 2021.


CEO succession

On 18th November 2019, Seplat announced that Chief Financial Officer Roger Brown will become Chief Executive Officer when Austin Avuru retires at the end of July 2020. Mr. Brown joined Seplat in 2013 as the CFO and played a key role in the successful dual listing of the Company in 2014. Similarly, since joining the Company, he has played significant roles in various asset acquisitions by the Company.

He will bring to the CEO role, a deep knowledge of the Company in his seven years as CFO and a member of the Board.  He has strong financial, commercial and M&A experience as well as proven people skills that will be an asset as the Company embarks on the next phase of its growth plan. 


Board change

During the year, the Board accepted the voluntary resignation/retirement of Mr. Macaulay Agbada Ofurhie from the Board of the Company effective 30th June 2019. Mr. Ofurhie was appointed to the Board in March 2010 and served meritoriously before his resignation.

Nathalie Delapalme was appointed effective 18 July 2019. Madame Delapalme is an Independent Director on the Board of Directors of Maurel et Prom and has acted as an alternate to Maurel et Prom's nominee, Mr. Michel Hochard since 30th June 2014.

On 29 January 2020, after the end of the financial year, the Board of Directors announced the retirement of Mr. Michel Hochard as a Non-Executive Director of the Company. In his role as the Chief Executive officer of Maurel & Prom ("M&P"), Mr. Hochard was appointed to the Board of Seplat in 2009 as a nominee of M&P and served meritoriously before his retirement.

Following the retirement of Mr. Hochard as the Chief Executive Officer of M&P and from the Board of Seplat, the Board announced the appointment of Mr. Olivier de Langavant (who is now the Chief Executive Officer of M&P) as a Non-Executive Director of the Company effective January 28, 2020. Mr. Langavant replaced Mr. Hochard as a nominee of M&P on the Board of the Company.


Financial review

Revenue, production and commodity prices

Brent oil price averaged US$64.04/bbl over 2019 (2018: US$71/bbl), the average premium to Brent achieved by the Group in 2019 was US$0.36/bbl. Brent remained volatile throughout the year, trading between a low of US$54.91/bbl in January and a high of US$74.97/bbl in April, before exiting the year at US$66.00/bbl.

Total revenue for 2019 stood at US$698 million, down 6.5% from the US$746 million achieved in 2018. Crude oil revenue was US$495 million (2018: US$591 million) a 16.2% reduction compared to 2018, reflecting lower realised oil prices and production.

Average working-interest liquids production was 23,935 bopd, down 6.8% from 25,669 bopd in 2018, whilst the total volume of crude lifted in the year was 7.7 MMbbls compared to 8.4 MMbbls in 2018. The lower production was due to natural decline in the mature fields and rig mobilisation and availability delays that in turn delayed the execution of work that was designed to remediate this natural decline and incrementally increase production. 

Gas revenue increased by 30% to US$203 million (2018: US$156 million), including gas tolling income of US$67 million. Gas sales contributed 29% of total Group revenue in 2019 (2018: 21%).

In prior periods, the Group had not recognised the related income or receivable for the tolling service because the basis for determining the fees had yet to be concluded with NPDC. However, during the period, an agreement was reached with NPDC to back-in their right to 55% of the 375MMscfd Oben gas plant expansion, which was financed sole risk in 2015. A payment of US$168 million was agreed between the parties, with US$67 million being booked as gas tolling revenues in the first half of 2019. The remaining US$101 million will be treated as a payment for the plant and of this, US$51 million was booked in the fourth quarter of 2019. The outstanding US$50 million is expected in the first half of 2020. This exercise will not affect future gas revenue due to Seplat as gas sales have been realised on a 45% working interest basis and no further tolling revenue will be recognised from the NPDC.

The average realised gas price was slightly lower, at US$2.84/Mscf (2018: US$2.94/Mscf), with total gas volumes sold of 131 Bscf (2018: 145 Bscf). The lower gas sales volumes reflect lower-than-expected gas production owing to constrained production from the Oben-47 well and delays in completing the Oben-48 gas well.

As Seplat already meets its Domestic Supply Obligation, the Group can pursue new gas offtake customers in order to achieve future contracts at more favourable commercial terms.


Gross profit

Gross profit increased slightly to US$396 million (2018: US$391 million) as a result higher gas processing revenues and lower non-production costs primarily consisting of royalties and DD&A, which were US$188 million compared to US$244 million in the prior year. The DD&A charge for oil and gas assets decreased to US$91 million during 2019 (2018: US$119 million), reflecting lower depletion of reserves because of decreased production compared to the prior year.

Direct operating costs, which include crude-handling fees, rig-related costs and operations and maintenance costs amounted to US$105 million in 2019 and remained flat against US$105 million in 2018. Lower crude-handling fees offset the higher rig-related costs that mostly relate to workovers which form part of expenses for the relevant reporting period.

During the year ended 2019, substantial repair and maintenance (work-over) were carried out to ensure adequate running of the wells. The higher operations and maintenance costs in the period reflected increased levels of asset integrity management activities being carried out.

On a cost-per-barrel basis, production opex was higher at US$6.20/boe (2018: US$5.77/boe) because of the decrease in production volumes compared to 2018.

Emphasis on careful cost management led to an 11% reduction year-on-year in general and administrative expenses, which stood at US$71 million (2018: US$80 million).


Operating profit

Operating profit for the year was US$312 million (2018: US$310 million), helped by the gas-tolling revenue recognised but set against the reversal of previously recognised accrued interest of US$40 million on NPDC receivables due to the settlement of these receivables.



The Group's tax expense for 2019 was US$29 million, compared to US$117 million for 2018. Previously unrecognised deferred tax assets of US$20 million from prior years' tax losses and unutilised capital allowances were recognised, after an assessment of the relevant entity's future profitability showed recoverability of the deferred tax assets. This resulted in a deferred tax charge of US$6 million for the year (2018: US$ 92 million charge).

The estimated applicable average annual tax rate used for the year ended 31 December 2019 was 10% (2018: 44%). The reduction in the effective tax rate was principally due to the recognition of tax losses available for utilisation against future profit.

In May 2015, in line with sections of the Companies Income Tax Act, which provides incentives to companies that deliver gas utilisation projects, Seplat was granted a three-year tax holiday with a possible extension of two years. In 2018, upon review of the performance of the business, the Group provided a notification to the Federal Inland Revenue Service (FIRS) for the extension of claim for the additional two-year tax holiday. The financial statements have been prepared taking into consideration the impact of the additional tax holiday and this forms the basis for the Group's current income taxation and deferred taxation for the year ended 31 December 2019.


Net profit

Profit before tax adjustments, was US$293 million, up 11% compared to US$263 million in 2018. Finance charges for the period were lower due to the positive impact of deleveraging in the year. The net finance charge was US$20 million, compared to US$47 million in 2018. Net profit for 2019 was US$277 million (2018: US$147 million).

The resultant basic earnings per share was US$0.49 in 2019, compared to an EPS of US$0.26 in 2018.



In line with the dividend policy, the Board has recommended a final dividend of US$0.05 per share. This will bring the total dividend to US$0.10 per share (2018: US$0.10 per share).

Subject to approval of shareholders, the dividend will be paid shortly after the Annual General Meeting, which will be held in Lagos, Nigeria, on 28 May 2020.


Business Combination

On 17 December 2019, Seplat completed the acquisition of Eland Oil & Gas PLC, which was announced on 15 October 2019.

The cash consideration, totaling US$488 million (GBP382 million or 166 pence per share), was wholly funded through a combination of existing cash resources and the amended and restated Revolving Credit Facility (RCF) of $350 million made available to Seplat. After accounting for cash balances at Eland of $31 million, the net consideration was US$457 million.

The acquisition was consummated at 31 December 2019 and with no significant items occurring after acquisition close, the profit for Eland was not reflected in the profit and loss account, but has formed part of pre-acquisition reserves. Receivables acquired on business combination were carried at fair value.

The assets and liabilities of Eland were recognised in the balance sheet at 31 December 2019 as follows:                  

US$ m

Total assets






Total liabilities






Fair value net assets






Net asset acquired








Seplat has recorded US$30 million goodwill in respect of the acquisition of Eland Oil & Gas PLC. The goodwill is attributable to the skills and talent of Eland's workforce and the high profitability of the business acquired. The goodwill recognised is not expected to be deductible for tax purposes.

For the non-controlling interests in Eland Oil & Gas PLC, the Group elected to recognise the non-controlling interests at its proportionate share of the acquired net identifiable assets.


Repayment of Elcrest development loan to Seplat

In acquiring Eland, Seplat has acquired the right to be repaid a US$500 million development loan due by 31 December 2024. The loan is advanced to Elcrest by Westport, Eland's 100%-owned financing subsidiary for the development of OML40. Following its acquisition of Eland, Seplat is entitled to 100% of Elcrest's production and net cash flows until the loan is repaid in full.

As at 31st December 2019, the outstanding balance of the loan was approximately US$414 million. Under a revised loan agreement that became effective on 1st January 2020, there is a grace period until 31 December 2021 after which the loan amount will be reduced so that the maximum amount outstanding is no greater than US$475 million on 31st December 2021, falling to US$325 million on 31st December 2022 and US$175 million on 31st December 2023, with the balance of the loan being due by 31st December 2024.

The impact of this loan repayment will be to provide Seplat with significant annual cash repayments during the period end 2022 to end 2024. After repayment of the loan, Seplat's interest in OML40's production and net cash flows will revert to 20.25%, representing its 45% interest in Elcrest, which in turn owns 45% of OML40.

In addition to the loan, there is a Reserve based lending facility at Westport which is fully secured against the shares and assets of Elcrest and is serviced by the cashflows from the asset.  The year end balance on the loan was US$90 million


Cash flows from operating activities

Net cash flows from operating activities after movements in working capital were US$338 million (2018: US$502 million). In 2019, Seplat received a total of US$179 million towards the settlement of 2019 cash calls. The business combination with Eland resulted in the booking of an additional US$50 million of receivables, leaving an NPDC receivable balance of US$222 million. Seplat has continued discussions with partner NPDC to ensure that receivables are settled promptly. The Group has continued to receive the proceeds of gas sales from NPDC in lieu of Naira cash calls for ongoing operations.


Cash flows from investing activities

Capital expenditures were US$125 million in 2019 and included drilling costs in relation to nine development wells, the Ohaji South facility expansion project and the Amukpe Liquid Treatment Facility. Gas project costs included the Sapele Gas Plant upgrade project.

In response to delays caused by the need to upgrade drilling rigs, the Group's capital expenditure plan was revised downwards during the year, with capital being allocated to highest-impact development projects during the second half. Most of the Group's capital expenditures are discretionary with the flexibility to align investment with cash flow in response to prevailing conditions and future growth opportunities.

Following the acquisition of Eland Oil & Gas PLC, the net cash outflow of US$457 million represents the consideration net of US$31 million cash acquired.

Seplat made a US$103 million equity contribution towards the ANOH project, where first gas is targeted in Q4 2021. Additionally, AGPC's cash balance of US$154 million was deconsolidated from the Group's balance sheet in April 2019.

In 2016, Seplat an agreement with OML55 partner Belemaoil on a revised commercial arrangement that provides for a discharge sum of US$330 million to be paid to Seplat over a six-year period through allocation of crude oil volumes. US$36 million was received from Belemaoil in 2019 arising from two liftings in the year that monetised 576 kbbls. The total sum recovered by Seplat to date under this agreement is US$120 million, which is in line with projections.

After adjusting for interest receipts of US$13 million, the net cash outflow from investing activities for 2019 was US$733 million compared to a net cash outflow in 2018 of US$31 million, reflecting the higher capex spend, AGPC deconsolidation, ANOH equity contribution and acquisition costs during the period. 


Cash flows from financing activities

Following the cash acquisition of Eland Oil & Gas PLC, net debt at year-end was US$456 million, compared to a net cash position of US$135 million at December 2018. Net cash inflows from financing activities were US$145 million (2018: cash outflow US$329 million).


Net Debt reconciliation
at 31 December 2019

US$ million



Senior Notes



June 2023

Revolving Credit Facility



June 2022 / December 2023

Westport RBL  



November 2023

Total borrowings




Cash and cash equivalents




Net debt





In March 2019, a repayment of US$100 million on the four-year revolving credit facility returned its balance to zero and in December the Group successfully restated and amended the existing RCF with a new four-year US$350 million RCF at LIBOR + 6% (drawn in December 2019). Proceeds from the upsized RCF, along with existing cash resources, were used to fund the acquisition of Eland Oil & Gas PLC, which was finalised in December 2019. Following completion, Eland's existing Reserve-Based Loan was consolidated into the Group's balance sheet.

Overall, Seplat's aggregate indebtedness at 31 December 2019 stood at US$789 million, with cash at bank of US$333 million, leaving net debt at US$456million.

During the year, the Group returned US$58.7 million to shareholders in the form of dividends.

The Group remains in a good position to achieve its organic growth plans and pursue inorganic growth opportunities as appropriate in line with a price-disciplined approach that aims to fund expansion and provide robust returns to shareholders.



Seplat's hedging policy aims to guarantee appropriate levels of cash flow assurance in times of oil price weakness and volatility. During 2019, the Group had in place dated Brent put options covering a volume of 4.0 MMbbls to the year end at a combined weighted average strike price of US$50/bbl. The net cost of these instruments in the year was US$2.7 million.


This hedging programme has been continued in 2020 with up-front premium put options at a strike price of US$45/bbl protecting a volume of 4.5 MMbbls (in aggregate) for the first three quarters of 2020. The Board and management team continue to closely monitor prevailing oil market dynamics and will consider further measures to provide to provide appropriate levels of cash flow assurance in times of oil price weakness and volatility.


Credit ratings

Seplat maintains corporate credit ratings with Moody's Investor Services (Moody's), Standard & Poor's (S&P) Rating Services and Fitch. In December 2019, Moody's announced a revision to the outlook on Seplat's B2 corporate credit rating from stable to negative outlook (changed following negative outlook rating for Nigeria sovereign). S&P's lowered the notes rating to B- (lowered from B following acquisition of Eland due to incorporation of additional Eland indebtedness as "priority debt" within Seplat group). Fitch remains unchanged with a Corporate Rating B-, positive outlook.



It is the view of the Board that, given the Group's single country focus on Nigeria, Seplat's business, assets and operations will not be materially affected by Brexit. Seplat also derives most of its income from crude oil, a globally traded commodity which is priced in US dollars. Furthermore, Seplat's gas revenues are derived solely from sales to the domestic market in Nigeria and therefore are unaffected by international factors.


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Full Year 2019 Financial Results - RNS