Seplat’s H1 profit rises by 15 per cent on gas project

Seplat Petroleum Development Company Plc has said that the progress made so far at the large scale Assa North/Ohaji South (ANOH) gas and condensate development project impacted significantly its half-year performance, as the firm achieved 15 per cent rise in half-year profit before deferred tax.

The company’s unaudited consolidated half-year financial results for the period ended 30 June, 2019, showed a profit before deferred tax of $121 million (N37 billion) from $105 million (N32 billion) reported in the first half of 2018.

According to the company, its revenue for the period also appreciated by four per cent to $355 million (N109 billion), which is higher than the 2018 half-year figure of $343 million (N105 billion).

On a similar note, the oil company’s gross profit rose by 19 per cent to $207million (N64 billion) from $174 million (N53 billion) reported in 2018 half-year.

Operating cash flow rose to $255 million from $245million, indicating a four per cent appreciation year-on-year.

The Chief Executive Officer of the company, Austin Avuru, said the company has secured the necessary rig capacity for the second half to implement the revised work programme, which will drive towards an 2019 exit working interest production rate of 62,000 barrels of oil equivalent per day (boepd).

According to him, this would ultimately bring annualised production within the unchanged guidance range of 49,000 to 55,000 boepd.

“Today’s results further emphasise the strong cash generation potential of our low-cost production base and the good progress we are making at the large scale Assa North/Ohaji South (ANOH) gas and condensate development project.

“We remain on an extremely solid financial footing and concentrated on furthering our growth strategy as we target both organic and inorganic opportunities to grow shareholder returns.”

“The revenue of $355 million (up by four per cent year-on-year) was with gas tolling revenue of $67 million recognised for the first time in relation to the processing of the Nigerian Petroleum Development Company’s (NPDC) gas through the Seplat sole risk funded Oben Gas Plant 375 million standard cubic feet per day (MMscfd) expansion between June 2015 and 2018 end.

“The gross profit of $207 million, according to Seplat, represents a 58 per cent margin (up from 51 per cent in H1 2018) while operating profit of $139 million is down 12 per cent year-on-year after adjusting for a $40 million impairment of NDPC receivables,” he said.

He stated that the full year 2019 production guidance is maintained at 49,000 to 55,000 boepd on a working interest basis, comprising 24,000 to 27,000 bopd liquids and 146 to 164 MMscfd (25,000 to 28,000 boepd) gas production.