Seplat Energy Plc, Nigeria’s leading indigenous energy company, is currently listed on the Premium Board of the Nigerian Exchange (NGX) and the Main Market of the London Stock Exchange (LSE). It wasn’t just a mere task to be dually listed on these markets simultaneously 10 years ago. It was a rare determination, commitment and quest for a hybrid investment vehicle to achieve operational excellence, strong partnerships and credibility in international capital markets.
With the dual listing on these markets, a lot of opportunities kept knocking on Seplat Energy’s doors and with proactive leadership, these were progressively embraced.
Today, Seplat Energy has become one of the pivots on which the wheel of the nation’s oil and gas rotates.
With $500 million in a landmark Initial Public Offer (IPO) raised and listing on both the LSE and NGX, Seplat Energy within 10 years has grown in leaps and bounds.
According to the company’s Chief Executive Officer, Mr. Roger Brown, the dual listing has enabled Seplat Energy to increase its access to capital while its shares have become more liquid.
“Post-IPO, we generated $1.7 billion in Free Cash Flow (FCF), excluding 2014 and 2015 when we made significant capex investments. Post-IPO, we have generated an average annual FCF of $264 million. Besides, the listing has bolstered our brand’s visibility, credibility and reputation. Today, Seplat Energy is a strong voice and a thought leader in the African energy landscape. Seplat Energy has also diversified its investor base, enhancing relationships with current and potential investors across the world, with risk mitigation and currency flexibility.”
Seplat Energy’s Chief Financial Officer designate, Mrs. Eleanor Adaralegbe
In 10 years, Seplat Energy has acquired a number of assets, most notable among which is the acquisition of Eland Oil & Gas, the first UK-listed company by a Nigerian company in December 2019. Eland holds participating interests in OML 40 and the Ubima marginal field.
The Eland acquisition followed earlier acquisitions such as Belema Oil Producing (an Energy Exploration outfit) in February 2015 and 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% participating interest in OML 53, onshore north eastern Niger Delta, from Chevron Nigeria Ltd and a revenue interest in OML 55, south eastern Niger Delta. In January 2017, the Group incorporated a new subsidiary, ANOH Gas Processing Company (AGPC) Limited, a midstream gas company committed to the processing of gas from OML 53 for distribution to the local market.
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Brown stated: “We have completed major acquisitions since 2014. Our current portfolio includes seven onshore blocks; we have acquired Chevron’s OML 53, transferred in 2016 (resulted in development of the ANOH Gas plant); acquired Eland in 2019, and signed SPA with Exxon Mobil Producing Nigeria Unlimited (MPNU) in February 2022, grew gross gas processing capacity to c.800 MMscf/d including AGPC while gas revenues increased by 350% since 2014 to $123.4 million in 2023. ANOH gas processing plant achieved mechanical completion in December 2023, with first gas being expected in 3Q 2024.”
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 benefits with over $57.2 million invested in host communities to date. HCDTF was established in line with PIA for operated assets and board established contributions up to date. The company is working with community representatives to conduct needs assessment for project execution.
Brown said: “Our success story is driven by operational excellence, strong partnerships and credibility in international capital markets, with eight onshore blocks in the Niger Delta, ideally located for oil exports and internal gas demand centres.”
He said that Seplat Energy had been profitable and cash generative, adding that in the 2023 financial year, the company recorded over $1billion revenue, 47,785 barrels per day oil production, with liquid, 59%, Gas, 41% and 478 million barrels of oil reserves with liquid, 47% and Gas, 53%.
“We have a strong ESG focus and Environmental Care. Seplat Energy supports the goals of the Paris Agreement as we are committed to eliminating routine gas flaring by 2025, five years ahead of the regulatory target, at Seplat-operated assets. We are a leading supplier of gas to Nigeria’s domestic gas-to-power market.”
On why the oil company’s dual listing on the London and Lagos Stock exchanges in 2014, Brown said: “It’s for local and international accountability. The need to comply with industry recognised best practices and standards, while strictly adhering to international and local laws and regulations. It is also to ensure strong governance, experienced and skilled leadership, accountability, high standards of corporate governance and consistent delivery of targets.
He also said that it was to ensure financial robustness by maintaining strong cash position and good liquidity management; strong track record of debt management or ability to repay debts and well-managed receivables and payables.
According to him, environmental commitment also contributed to the decision.
“We need to strengthen our commitments to energy transition and emission reductions, to establish a baseline for sustainability targets, and ensure consistent and transparent reporting as well as responsible stewardship, drive positive social impact and contributions to local communities and ensure strong partnerships with government and regulators.
Seplat Energy’s Chief Financial Officer designate, Mrs. Eleanor Adaralegbe, said that the oil company was set to do more laudable practices.
According to her, over $575 million was returned to shareholders from IPO to end 2023, equivalent to 107% of $535million IPO proceeds with core dividend increased 20% in 2023 to $12c/shr – Special dividends paid in 2022 ($5c/shr) and 2023 ($3c/shr).
“Despite our aggressive capex investments and acquisitions, we continue to have adequate cash flow to pay our shareholders best-in-class dividends. With $575 million paid as dividends since our IPO in 2014, we have successfully returned all the capital we raised at IPO,” she stated.
According to her, with a robust balance sheet, Seplat Energy has made a $2.8 billion contribution to the Federal Government of Nigeria over the past 13 years, $2 billion since IPO, $1.54 billion on royalty till date, $329 million on Petroleum Profits Tax, $273 million on Value Added Tax (VAT), $259 million on Withholding Tax, $126 million on PAYE and $276 million to NDDC and others.
Seplat Energy’s potentials
The Nigerian economy is currently undergoing major energy transitions. Gas resources and products (LNG, CNG & LPG) will play key roles. The Nigerian domestic market is deep enough to absorb whatever Seplat Energy can come up with from its gas production plant, ANOH Gas Plant. Aside from contracts to supply gas required for firing the nation’s electricity plants, there is increased potential for CNG infusion into the transportation systems as well as LPG for domestic use within and outside Nigeria
Incidentally, this increased demand for gas coincides with Seplat Energy’s programme to reduce gas flaring. Another potential for the company is to consummate the development of 13 additional wells already identified as priorities for the year 2024 which, again, will help boost earnings for the Nigerian economy.
