Seplat Energy has boost profits among higher production, with the company staying confident on its planned purchase of ExxonMobil’s local Nigerian unit.
Seplat reported revenues were up 71%, at $527 million in the first half of the year, with higher prices of $107 per barrel. EBITDA was also up, by 92%, at $342.7mn.
The Nigerian company generated $330.1mn of cash with capital expenditure of $70.7mn. Over the full year, capex should reach $160mn.
“Production increased strongly in the second quarter, achieving 52.4 kboepd across our operations, and we expect to maintain higher volumes for the rest of the year now that we plan to export liquids through the more secure Amukpe-Escravos Pipeline,” said Seplat CEO Roger Brown.
Seplat sold its Ubima interest “because of its high production costs and export difficulties”, he noted.
It also acquired a 95% interest in the Abiala marginal field “and plan to begin operations there next year using existing infrastructure in OML 40. This is consistent with the strategy for low-cost, low-risk upstream growth we announced last year.”
“We remain confident that our transformational acquisition of MPNU will be approved, adding significant reserves and production capacity that will strongly reinforce Seplat Energy’s position as Nigeria’s leading indigenous oil and gas producer.”
The company is also working to decarbonise. It plans to end routine flaring by 2024 and plant 5 million saplings across five Nigerian states in order to help sequester carbon.
“All of these initiatives demonstrate our strategic commitment to build a sustainable company that delivers energy transition for the benefit of all Nigerians,” Brown said.
Key projects
Seplat expects to begin producing into the Amukpe-Escravos link in the first week of August.
The company reported reconciliation losses of 12.2% during the six months. These should fall, it said, when it begins exporting most of its production through the new pipeline, which is mostly underground.
Seplat was unable to provide substantive information on the Mobil Producing Nigeria Unlimited (MPNU) purchase. The Nigerian National Petroleum Corp. (NNPC) has taken Exxon and the upstream regulator to court.
Seplat plans to drill four more wells in the third quarter. These aim to cut decline and support production, it said.
The ANOH project is at 87% completion, Seplat said. The Nigerian Gas Co. (NGC) is delivering pipelines, which will link the project to Oben.
Drilling under the River Niger has been difficult. NGC is confident it can overcome this, Seplat said.
Delayed pipelines manufactured in China are expected to leave the country this quarter. Seplat expects the Obiafu-Obrikom-Oben (OB3) pipeline and the spur line to be completed in the first quarter of 2023. First gas from ANOH should come in the first half of next year, therefore.