Seplat Petroleum Development Company Plc has released its financial statement for the half year ended June 30, 2020.
In its unaudited financial statements released through the Nigerian Stock Exchange, the oil firm’s total revenue for the period was $233.5 million, a 34.2 per cent drop from the $355.1 million reported during the same period in 2019. The firm attributed this to the drop in global oil prices and demand.
Also, Gross profit for the company dropped from $$207 million in the half year 2019 to US$37.7 million. The company attributed the huge drop to “lower revenues and higher non-production costs primarily consisting of royalties and Depreciation, Depletion, And Amortization (DD&A), which were $119.7 million compared to $96.6 million in the prior year.”
The firm’s net debt stood at US$456.8 million. The company said total borrowings stood at $799.2 with cash at bank of US$342.6 million, leaving its net debt at US$456.8 million.
Commenting on the results, the outgoing Chief Executive Officer, Austin Avuru, said: “Seplat has delivered a robust performance despite the unprecedented crises we have experienced since March. Our continued resilience is possible as a result of our financial strength, our careful management of risk and our prudent approach to capital allocation. Unlike many in our industry, we were able to protect our 2019 dividend and increase our capital investment to ensure continued growth.”
He added: “Our oil hedging strategy and gas revenues continue to protect the business from price volatility, we are achieving substantial cost reductions from our suppliers and are managing our own costs even more carefully in this challenging period. Thanks to the excellent relationships we have with our Government partners and supply chain, our NPDC receivables have fallen and we are managing our payments equitably. The cash position is also robust because our careful management of debt has ensured that the majority of obligations mature in 2022 and 2023. We are operating within our covenants on all our lines of debt.”
KEY HIGHLIGHTS
OPERATIONAL
- Working interest production comfortably within guidance at 51,177 boepd despite market volatility;
- Eland OML40/Ubima assets produced 10,861 bopd, 32% of Group oil volumes, integration progressing well;
- Low unit cost of production at US$7.60/boe, with cost-cutting initiatives ongoing, particularly at OML40/Ubima;
- Liquids production of 34,117 bopd, gas production of 99 MMscfd;
- ANOH project remains on track for Q4 2021 first gas, financing RFP launched • Amukpe-Escravos Pipeline delayed due to access to the Escravos terminal, expected operational in H2 2020.
FINANCIAL
- Cash increased to US$343 million despite lower revenues, US$29 million 2019 dividend, and US$86 million capex;
- Net debt steady at US$457 million with most maturities after 2021;
- Revenue US$234 million, down 34.2% due to lower oil prices and demand;
- IAS 36 impairment provision of US$146 million (non-cash) in line with IAS 36 COVID-19 impact assessment;
- Provision reverses operating profit of US$33 million to operating loss of US$113 million.
OUTLOOK
- Full-year production guidance reiterated at 47-57 kboepd, subject to market conditions. We expect to narrow the guidance range in Q3;
- Oil hedging: 1.5MMbbl at US$45/bbl Q3 2020, 1.5MMbbl at US$30/bbl Q4 2020, 1.0MMbbl at US$30/bbl Q1 2021;
- Full-year capex of US$120 million (US$86m already invested) to include two gas wells and related infrastructure.