Seplat earmarks $130 million for oil, gas development in 2016

Seplat Petroleum Development Company Plc, has earmarked about $130 million for its 2016 operations, even as it reinstated commitments to fully exploit the nation’s abundant gas resources.

The company, in its fact behind the figures presentation to the Nigerian Stock Exchange recently, said: “Looking ahead throughout 2016, it has set full year production guidance at 41,000 to 48,000 barrels of oil equivalent per day (boepd) and expects its capital expenditures to be around $130 million”.

Presenting the details of Seplat’s full-year 2015 performance, ahead of its yearly general meeting scheduled for June 1, the Chief Executive Officer, Austin Avuru and Chief Financial Officer, Roger Brown, said the company’s 2P reserves at the end of 2015 had increased by 71 per cent year-on-year to 480 million barrels of oil equivalent (MMboe), with a further 98 MMboe recognised as 2C resources.

Total reserves were reported as 578 MMboe, average working interest production during 2015 averaging 43,372 boepd, ahead of guidance and up 41 per cent year-on-year. Within this, oil and condensate production accounted for 29,003 bopd (up 20 per cent year-on-year) and natural gas production was 86 MMscfd (up 119 per cent year-on-year).

According to the company, all of the natural gas production was supplied to the domestic market.

Avuru said Seplat was committed to boosting gas supply to the domestic market.with gross processing capacity doubled to 300 MMscfd, while work is underway to increase further to 525 MMscfd.

“In a significant step forward for its gas business, during mid-year 2015, SEPLAT successfully completed and commissioned the Oben gas plant phase one expansion.

“This expansion saw the company’s overall gross processing capacity double to 300 MMscfd. The Oben gas plant phase II expansion is underway with additional processing modules ordered. Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525 MMscfd,” he stated.

Alongside the significant increase in gas production, he said the positive financial impact of Seplat’s gas business was evident as revenues from gas sales increased 185 per cent year-on-year to $77 million.

Although production was up year-on-year, the significantly lower oil price realisation and downtime of third party operated infrastructure adversely impacted revenue, more than offsetting the increased contribution of the gas business.

Consequently, gross revenue for the full-year stood at $570 million, down 26 per cent year-on-year. Net profit for 2015 was estimated at $67 million and cash flow from operations before movements in working capital stood at $190 million against capital investments of $152 million.