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Seplat Energy generates $1.7bn cash flow in 10 years, invests $57m to support communities

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Ten years after its initial public offer (IPO) which was held in 2014, Seplat Energy has generated $1.7 billion in free cash flow and invested over $57million to support community projects focused on healthcare, education and empowerment.

These were disclosed by Chief Executive Officer, Seplat Energy, Roger Brown, at a press briefing marking the oil company’s 10-year anniversary of dual listing at the Nigerian Stock Group (NXG) and the London Stock Exchange (LSE) in Lagos on Thursday.

Free cash flow is defined as “the money a company has left over after paying its operating expenses (OpEx) and capital expenditures (CapEx),” according to Investopedia.

Brown explained that Seplat Energy has made a significant progress post-IPO, acquiring eight onshore blocks in the Niger Delta and generating an average annual FCF of $264m.

With over 500 direct staff, the company, now known as most successful indigenous energy company in Nigeria, has supported hundreds of jobs indirectly in communities and the supply chain.

“Our success story driven by operational excellence, strong partnerships and credibility in international capital markets,” Brown told journalists.

At a point when firms evade and avoid taxes, Seplat Energy has made enormous contributions to the growth of the Nigerian economy.

Post-IPO, it has paid $2 billion in taxes to the Nigerian government since 2014.

Throwing light on this major stride, Eleanor Adaralegbe, Seplat Energy’s Chief Financial Officer-Designate, said the company has made a total of $2.8bn contribution in taxes and royalties to the Federal Government over the past 13 years.

The company’s contribution, according to her, include $1.54 billion paid in royalties; $329m of petroleum profits tax, and $273m on value added tax (VAT).

Others are: $259m of withholding tax, $126m of Pay As You Earn (PAYE), and $276m to the Niger Delta Development Commission (NDDC), among others.

In 2014, Seplat Energy made its intentions clear to become a major oil company in Africa’s most populous nation. As a result, it embarked on a landmark IPO, raising over $500 million on the LSE and the NGX.

Ten years after, Seplat Energy has returned $575 million to shareholders, meaning that shareholders gained additional $75 million as return on their investment. Core dividend to shareholders increased by 20 percent in 2023 to S$12c per share.

“With $575m paid as dividends since our IPO in 2014, we have successfully returned all the capital we raise at IPO,” she noted.

“Dividend has been paid in nine out of past 10 years,” she said, stressing that the main reason for reduced dividend in 2016/17 was the unavailability of infrastructure, particularly the Forcados, which went  offline for 16 months.

Seplat Energy acquired Eland Oil & Gas, which was the first acquisition of a United Kingdom-listed company by a Nigerian firm in December 2019. Eland had held participating interests in OML 40 and the Ubima marginal field.

The Eland investment followed earlier acquisitions such as Belema Oil Producing (an energy exploration outfit) in February 2015 and Assa North-Ohaji South (ANOH) Gas Processing (an energy refining company) in March 2019.

In June 2013, Newton Energy, a wholly-owned subsidiary of Seplat, reached an agreement with Pillar Oil to acquire a 40% participating interest (non-operated) in the Umuseti/Igbuku fields (OPL 283).

Also in 2015, the group purchased a 40 percent participating interest in OML 53, onshore north-eastern Niger Delta, from Chevron Nigeria Ltd and had a revenue interest in OML 55, south-eastern Niger Delta.

In January 2017, Seplat incorporated a new subsidiary, ANOH Gas Processing Company (AGPC) Limited, a midstream gas company committed to the processing of gas from OML 53 for onward distribution to the local market. In August 2018, the group entered into a shareholder agreement with Nigerian Gas Processing and Transportation Company (NGPTC) to subscribe for equal ownership of AGPC.

The Seplat Energy portfolio now comprises eight oil blocks – direct interests in seven blocks in the Niger Delta area, four of which Seplat operates and one further of revenue interest. The company also established a robust Global Memorandum of Understanding with the local communities in the Niger Delta, setting out rules of engagement and mutual beneficiation.

The major effect of these acquisitions has been to position the company as the leading partner for Nigerian domestic gas supply for the power sector and a significant contributor to the crude supply to the export markets.

They also culminate in delivering key performance indicators such as 478 million barrels of oil equivalent (MMBOE) in 2P reserves, 47,758 barrels of oil equivalent per day (BOEPD) production capacity, adjusted revenue of $1.06 billion, adjusted EBITDA OF $448 million and share value of GBP867.96 million (N1.98 trillion) recorded as at its last reporting period in December 2023. The company has about 588 million shares outstanding on the Nigeria Exchange.

“We are a leading supplier of gas to Nigeria’s domestic gas-to-power market. At times, our gas powered 25-30 percent of Nigeria’s domestic grid,” Brown said.

He explained that the company has over $800million available liquidity and credible access to global capital markets

He added that Seplat Energy has emerged as a strong voice and a thought leader in the African energy landscape.

“We have diversified Seplat Energy investor base, enhancing relationships with current and potential investors across the world.”

Energy

Port-Harcourt refinery may resume operations July – Report

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The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu has revealed that the refinery may resume operations in July.

Speaking to newsmen on Monday, Ukadike stated that the development would stimulate economic activities reduce the price of petroleum products and ensure adequate supply.

The IPMAN official stated that the work done represented a complete turnaround, not just rehabilitation, emphasising that every effort would be made to meet the July deadline.

Ukadike said, “Yes when we visited the place, the MD told us that the refinery was almost ready and by the end of July, they would start
producing. It has been turned into a new one they changed all the armoured cable to brand new and everything there is almost like a brand-new refinery.”

“The turnaround on maintenance is
very massive and the job is being done day and night. All hands are on
deck to make sure that they meet that target. By ending of July the refinery should be ready.” He said.

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Energy

NDDC inaugurates Edo electricity sub-station

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The Niger Delta Development Commission (NDDC) has inaugurated the 1×15MVA 33/11KV electricity injection substation it built in Amufi, Ikpoba-Okha Local Government Area in Benin City, Edo State.

Speaking at the commissioning ceremony, the NDDC Managing Director, Dr Samuel Ogbuku, re-stated the Commission’s resolve to fully comply with President Bola Ahmed Tinubu’s directive that all on-going projects were completed and commissioned.

He said: “Today marks the second day in our series of project commissioning. On Saturday, we were in Abia State to commission the 9-kilometer Obehie-Oke-Ikpe Road and flagged off the re-construction of Oke-Ikpe-Akwete-Ohambele Road, phase II.

“Our presence here today is to share the success story of our commissioning of projects and emphasise how the NDDC is a true blessing to the people of the Niger Delta. We have made remarkable progress. Our goal is not to compete with State Governments but to complement their efforts, along with other federal agencies, in driving development in the region.

“We are here to celebrate success, as Mr. President has directed that every stalled project be completed and commissioned for the benefit of the people. By prioritising the completion of such projects, we are making a difference in the lives of our people.”

Ogbuku said that the Commission was committed to improving the living conditions of Niger Deltans, stating: “Our objective is to move the NDDC from a transactional Commission to one that is committed to the sustainable development and transformation of the Niger Delta region.”

The NDDC boss commended the traditional rulers and leaders of the benefiting communities for securing the project site and equipment to protect them from vandals. As a reward for their peaceful disposition and protecting government assets, Ogbuku promised that the NDDC would award a contract for the reconstruction of the dilapidated road leading into Amufi community.

During the ceremony, the Edo State Governor, Godwin Obaseki, who was represented by the Commissioner for Mining and Energy, Hon. Enaholo Ojiefoh, commended the NDDC for complementing the efforts of the state government in rural electrification.

He described the NDDC Managing Director as “Mr. Project of the Niger Delta region.”

“We are going to take it up from here by enhancing the security network to protect all your projects in Edo State. We are very happy today to be part of the commissioning of this project.”

The NDDC Executive Director, Projects, Sir Victor Antai, said that the project would increase productivity in businesses for companies and artisans in the beneficiary communities.

According to him: “The features of the project include; installation of 15MVA, 33/11KV transformer with 33KV 1250A SF6 circuit breaker, switch gear panels, tripping unit and 1km 33KV high tension overhead line.

The representative of Edo South Senatorial District, Senator Neda Imasuen, underscored the fact that light eliminates darkness and opens up communities to development. He expressed delight that his constituents would begin to enjoy better services from the electricity company serving the area.

He stressed: “The transformative power of electricity cannot be overstated; this project will have a multiplier effect on businesses within the community.”

Also speaking, the immediate past Senator representing Edo South in the National Assembly, Senator Mathew Urhoghide, said the impact of electricity projects were enormous, noting that the communities in Ikpoba Okha LGA would begin to reap the benefits of NDDC’s contribution to rural development.

He remarked: “For the people in this community, this project will assist in their development by providing access to electricity, benefiting both the residents and local establishments.”

The Edo State Representative on the NDDC Governing Board, Hon. Patrick Aisowieren, said he was happy that the substation project, which commenced a few years back, had been successfully completed.

He said further: “I urge the community to take ownership of this facility for the greater good of the community and the entire Edo State.

The traditional ruler of Amufi, Ohen Iyi-Ewuara Asenoguan, thanked the NDDC for executing the electricity project and appealed for more infrastructural projects in the area.

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Energy

Communities demand accountability  of 3% HCDT from OML54

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Members of OML54 communities have asked Aradel Holdings Plc, to make available the details of the 3percent host community development fund accruable to the community as enshrined in the Petroleum Industry Act, PIA.

The people who made the demand during a town hall meeting with the management of Aradel Holdings Plc, insisted that the host communities ought to know how much has accrued to them from the 3 percent HCDT fund, either quarterly or annually.

Aradel, formerly known as Niger Delta Petroleum Resources Plc, NDPR is the operator of OML54 and Aradel Modular Refinery in Ahoada East and Abua/Odual Local Government Area of Rivers State. The company in the past, has been at loggerheads with its host communities leading to endless protests.

Speaking, the General Secretary of Ogbele community, Comrade Solomon Oyagiri, lamented that Aradell Holdings has not accorded the community its due, despite developmental promises made by its pioneer Managing Director, Aret Adams.

Oyagiri cited the continuous refusal by the company to give details of the 3 percent development fund accrued to it as one of the vexing situations created by the company, and queried the non payment of equitable fees from badges and vessels trucking at the community river bank.

He alleged that the selective justice created to cover the fraud and mismanagement of the host community trust fund was the bane of development, progress and the cause of myriads of litigations to contest injustice and marginalisation by the people and urged the company to align with genuine community representatives.

“A Post Environmental Impact Assessment, as a result of hazardous pollution and accompanying economic deprivation and social benefits to numerous fishermen and women arising from Aradel’s trucking operations on its coastal lines has not been carried out.

“We frowned at the continuous refusal by Aradell Holdings Nigeria Plc to implement the agreement reached with the community after the September 2022 peaceful protest. Even some staff of Aradel have teamed up with some of our community members to thwart the reached agreement.

“Aradel has refused to employ our sons and daughters from the host families into managerial positions; there is lack of total employment, refusal to adhere to the Local Content Act and impoverishment of our people through lack of award of contracts.”

Responding, the Community Relations Manager, Aradel Holdings Plc, Mr Blessing Okpowo, promised to take their demands to the management and assured the people that the community’s maternity home would soon be upgraded to a cottage hospital where healthcare services would be accessible and affordable.

Okpowo urged the people to be united in their demands and affairs, saying, “only unity of purpose can attract the needed development,” and assured the people of a regular interface with the community leadership.

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