Moody’s upgrades Seplat Energy’s outlook to positive

Moody’s Ratings has upgraded the outlook on Seplat Energy Plc to positive from stable, while affirming the company’s B2 long-term corporate family rating and B2-PD probability of default rating.

The rating agency noted that it’s decsioob follows it’s decision to revise Nigeria’s sovereign outlook to positive, reflecting the deep correlation between Seplat’s operational footprint and the country’s broader macroeconomic, fiscal, and regulatory environment.

The upward revision is anchored by a sharp improvement in the upstream company’s balance sheet following its December 2024 acquisition of Mobil Producing Nigeria Unlimited, now operating as SEPNU.

Moody’s-adjusted debt to EBITDA plummeted from 3.0x at year-end 2024 to 0.6x for the twelve months ended June 2026, while net debt to EBITDA fell to 0.3x.

Concurrently, retained cash flow to debt surged to 70 percent from just 7 percent over the same comparative timeline, positioning the company to sustain leverage well below its internal target of 1.5x over the medium term.

Operational performance has similarly bolstered the credit profile, driven by favorable crude pricing and steady volume growth. Seplat delivered an average production rate of 139.5 thousand barrels of oil equivalent per day during the first half of 2026, representing a 4 percent year-on-year increase, with corporate plans set on scaling output to 170 kboepd by 2030 despite a recent 10 percent equity divestment in SEPNU to NNPC.

This expansion is reinforced by a robust 2P reserve life spanning approximately 18 years and growing investments in commercial gas supply, which offers contracted revenue protection against oil price swings.

However, the credit rating agency noted that Seplat’s credit rating remains capped by Nigeria’s sovereign ceiling and exposed to regional operating hazards.

The primary credit constraints include asset concentration risks within the Niger Delta, heavy capital expenditure requirements over the next five years to commercialize reserves, cyclical oil price exposure, and foreign-exchange rules mandating the temporary repatriation of crude proceeds.