Seplat Energy Announces $204m Profit Before Tax In 2022

Seplat Energy Plc, one of Nigeria’s leading independent energy companies, announced at its 10th Annual General Meeting (AGM), held virtually on May 10, 2023, that pre-tax income rose 15.3 percent to $204.4 million last year.

Speaking to shareholders and other stakeholders at the AGM, Seplat Energy CEO Basil Omiyi said the company’s full-year 2022 revenue increased 29.8 percent to $951.$8 million.

Because of its strong financial performance and strong liquidity, Seplat’s chief energy officer proposed that shareholders be paid an extraordinary dividend of 5 cents per share in addition to a trailing quarterly dividend of 2.5 cents per share.

This brings the total dividend for the year to 15 cents per share. The shareholders’ meeting approved the payment of the dividend, which will be paid out around May 16, 2023 to the shareholders whose names were entered in the commercial register at the end of April 18, 2023.

Omiyi said the Company’s oil business started the year on a strong footing, with working interest production of 29,078 barrels of oil per day (bopd) and 30,338 bopd in Q1 2022 and Q2 2022 respectively, adding that: “However, in the third quarter, production was impacted negatively by evacuation problems at the Forcados Oil Terminal (FOT), not being available for a period.

“Thankfully, the much-delayed launch of the Amukpe-Escravos Pipeline (AEP) provided some relief as we were able to flow c.10,100bopd (working interest production) during the period.

“The AEP is now a major export route for our largest assets at OMLs 4, 38 and 41. As a result, our reliance on the Trans Forcados Pipeline and FOT is significantly lower, reducing risks of downtime while providing a solid base for stronger export volumes and revenues.”

The Chairman said the Company’s gas business remained strong throughout the year, as good progress was made with the construction of the ANOH Gas Processing Plant, which now awaits the completion of third-party infrastructure before it can commence operations, projected for the final quarter of 2023.

“The positive impact of renegotiated Gas Sales Agreements (GSAs) in H2-2022 provided healthy support for revenue growth and profitability and we continue to focus on increasing capacity utilisation at our Oben Gas Processing Plant,” he added.

Omiyi said the company has taken important steps toward its new focus and vision for the energy transition over the past 12 months, expanding its midstream gas business to increase the amount of natural gas fed into Nigeria’s power grid to replace diesel in the energy sector, while the New Energies corporate function is responsible for the development of the energy sector and renewable energy sources.

“At the same time, we have strengthened our approach to understanding and evaluating climate risk, which we have re-designated as a key risk to our business.

“We have adopted a new Board-approved Climate Change Policy and have advanced a major component of our decarbonisation strategy: eliminating routine flaring by the end of 2024 through our Flares Out initiative, which is six years ahead of Nigerian regulatory requirements and the World Bank’s initiative to achieve Zero Routine Flaring by 2030.

“These steps form part of a transition plan that will align our business strategy with the overarching goal of the Paris Agreement to limit mean global temperature rise to well below 2°C and contribute to supporting Nigeria’s pathway to achieving carbon neutrality by 2060.

“This plan is subject to evaluation, approval, and oversight of our Board and Management teams and is underpinned by actionable, specific initiatives for decarbonising our operations and increasing the overall sustainability of our business model,” he said.

In accordance with the guidance of the Climate Financial Disclosure Task Force and in accordance with the terms of our London Stock Exchange listing, the Chairman announces that the Company has published its first report on climate-related risks and resilience, which is a separate report acts document and presents its approach to climate risk.

In response to the comment from Seplat Energy’s CEO, shareholder Patrick Ajudua said, “I would like to congratulate the company on a special dividend of 5 cents in addition to a final dividend of 2.5 cents for a total of 15 cents.

“We are, indeed, very grateful and we appreciate the Board for being consistent in dividend payment and ensuring a generous reward to the shareholders at a very difficult time when most companies are even finding it difficult to maintain profitability.”

Meanwhile, Matthew Akinlade, President, of Noble Shareholders Solidarity Association, said: “I wish to commend the Board and management for a good performance, in spite of the challenges of the year 2022, you were able to raise revenue by about 38 percent and cost of sales at just 18 percent, which shows an effective management of the company’s cost.”

Speaking also at the meeting, Samson Ezugworie, Chief Operating Officer, of Seplat Energy, said that as part of Seplat Energy’s drive to become a leading supplier of lower carbon and renewable energy, we are exploring ways to expand into these new and exciting markets.

“The first and most obvious option is to provide more gas for Nigeria’s power sector, to reduce the country’s reliance on imported diesel fuel, which is highly carbon intensive and a drain on the nation’s wealth.

“We will also look at hybrid systems where we install solar or other renewable technology alongside gas, which will provide baseload power at all times,” he said.