H1 2022: Seplat Energy declares 81.9% increase in revenue

By Philemon Adedeji

Seplat Energy plc has declared 81.9 per cent increase in revenue to N219.2 billion in its half year H1 unaudited financial statement for the period ended June 30, 2022 from N120.4 billion declared in prior-year H1 2021 results

Seplat Energy is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, reported a 260.3 per cent massive increase in Profit Before Tax (PBT) to N87.3 billion in H1 2022 from N24.2 billion reported in H1 2021.

The group unaudited result revealed Profit After Tax (PAT) of N35.4 billion as of end of June 30, 2022 from N14.1 billion recorded in the comparable period of 2021.

Seplat Energy recorded a 151 per cent growth in Profit After Tax in H1 2022. The cost of sales increased during the period of study, declaring a 22.5 per cent increase standing at N105.1 billion in H1 2022 from N85.7 billion achieved in H1 2021.The growth in cost of sales causing gross profit to grew to a 229 per cent from N34.7 billion recorded in H1 2021 to N114.1 billion recorded in 2022.

During the period under review, the group operating profit gained a 138.9 per cent to N102 billion in H1 2022 from N42.7 billion achieved in H1 2021.

Despite the growth in top-line revenue, general and administrative expenses grew in double digits, subduing bottom-line profit.

In addition, the oil and gas exploration company grew its Earnings Per Share (EPS) by 53.7 per cent to N58.19 in H1 2022 from N37.86 generated in prior-year period.

Commenting on the results, which were released to the NSE and LSE on Thursday, Roger Brown, CEO of Seplat Energy Plc, said production increased strongly in the second quarter, achieving 52.4 kboepd across the company’s operations, and the company expects to maintain higher volumes for the rest of the year as it plans to export liquids through the more secure Amukpe-Escravos Pipeline.

“Having divested our interest in Ubima because of its high production costs and export difficulties, we recently acquired a 95 per cent interest in the Abiala marginal field and plan to begin operations there next year using existing infrastructure in OML 40,” Brown said.

“This is consistent with the strategy for low-cost, low-risk upstream growth we announced last year. We remain confident that our transformational acquisition of MPNU will be approved, adding significant reserves and production capacity that will strongly reinforce Seplat Energy’s position as Nigeria’s leading indigenous oil and gas producer,” he said.

Brown said Seplat has committed to stopping routine flaring as it recently launched a roadmap for decarbonisation, with a clear path to ending routine flaring by 2024.

“In addition, our ‘Tree for Life’ initiative will plant five million saplings to sequester carbon across five states. All of these initiatives demonstrate our strategic commitment to building a sustainable company that delivers energy transition for the benefit of all Nigerians,” he said.

Seplat Energy reiterated that the Sales & Purchase Agreement (SPA) signed on 25 February, 2022 to acquire Exxon’s shallow water operations in Nigeria, MPNU, remained valid and the company remained confident that the proposed acquisition would be brought to a successful conclusion in accordance with the law.

On the company’s outlook, Seplat said full-year production guidance for 2022 reflects expected third-party downtime and the derecognition of Ubima and has been narrowed to 50,000 to 54,000 boepd on a working interest basis, comprising 30,000 to 33,000 bopd liquids and 116 to 121 MMscfd (around 20,000 to 21,000 boepd) gas production.

“Capital expenditure expectation for 2022 remains at around $160 million. The company expects to drill four additional oil wells in the coming quarter to arrest decline and support production growth across the asset base, complete ongoing projects, invest in maintenance capex to secure the existing assets and continue investments in gas,” Seplat said.