Global oil windfall shoots Seplat’s revenue to historic N404bn but profit shrinks

The largest public energy company in Nigeria, Seplat Energyrecord annual revenue in 2022 amid rising global oil prices caused by the Russia-Ukraine war.

Given the significance of Russia as the third largest crude producer in the world before the hostilities broke out, the war involving these two neighbors caused a clear gap in the supply of oil, from which oil companies around the world are reaping big.

From BP, Exxon Mobil and Shell to Chevron, TotalEnergies and Equinor, large and medium-sized oil companies turn in record profitswith some even doubling.

Seplat, whose shares are quoted in London aside the main listing in Lagos, is riding on the wave even though the fortune has largely eluded Nigeria, base, because of the government’s obstacles in curbing the theft of ordinary oil.

Its revenue strengthened by more than one-third to N403.9 billion year-on-year despite a 6.8 percent weaker oil production, according to the earnings report published on Tuesday.

Operation Seplat in the Niger Delta of Nigeria took the hit of force majeure 146 days (mostly in the third quarter) in Garut Terminalthe main export point for crude is pumped over 22 kilometers from the shores of the Forcados River in southern Nigeria.

Cost of sales rose by N27.3 billion or 15.2 percent, led by royalties, while general and administrative expenses galloped by 81.8 percent to N58.3 billion, hurting operating profit.

The company incurred N15.3 billion as other losses due to overlift of crude oil above the agreed production quota, loss of foreign exchange, as well as loss of oil & gas assets.

Pre-tax profit scaled up by 22.1 percent to N86.7 billion, while profit for the year slid 5.3 percent to N44.4 billion after spending on tax income surged to N42.3 billion from N24.1 billion a year earlier.

“As we enter 2023, the business is in a healthy state, with new wells coming up, encouraging appraisal drilling carried out in Siberia, and alternative export routes to ensure a good export performance in January and February this year,” said the CEO Roger Brown.

Also read: Seplat appoints independent non-executive director

“Our gas business continues to grow, with first gas expected from ANOH in Q4 this year, and we are currently in the process of separating our Midstream Gas business from our Upstream unit to unlock new value for our shareholders.”

Seplat, supported by the Paris base Establishments Maurel and Prom SACut carbon emissions by 35 percent last year in loyalty to its climate ambitions, he added.

Share the price

Meanwhile, the stock price of SeplatEnergy hit the highest since September in London on Friday, after the oil driller said he would pay an unusual special dividend.
Priced at 119.5 GBX per unit at 15:00 WAT, the stock was trading 4.6 percent higher, while it did not move throughout the trade in Lagos quoted at N1,325.

The board’s resolution to compensate shareholders by paying $ 29.4 million (5 cents per share), the first of its kind, is a sign of the dramatic prosperity witnessed by oil drillers in 2022.

That added to the $14.7 million (2.5 cents per share) final dividend for the year brings the proposed dividend for the fourth quarter of 2022 to $44.1 million.

“The exchange rate for the amount of Naira or Pound Sterling to be paid will be determined with reference to the relevant exchange rate applicable to the US dollar on April 17, 2023 and will be communicated by the Company on April 18, 2023,” Seplat said in a note.

Eligible shareholders will receive payment on or around May 10, Seplat said in a document seen by PREMIUM TIMES if the move finds approval at the next AGM.