The Chief Executive Officer (CEO), Seplat, Austin Avuru, commenting on the results said, “Seplat has delivered an excellent operational and financial performance resulting in robust profitability and cash flow generation provides us with an extremely solid foundation for growth in the coming years.
“At our core assets in the West, OMLs 4, 38 and 41, the extension of the license to 2038 means that we can confidently plan and invest long into the future to realise the full potential of those blocks. As we continue to enhance production and revenue diversification with new wells scheduled at OML 53 in the East, the board took the Final Investment Decision to invest in the large scale ANOH gas and condensate development which will form the next phase of transformational growth for our gas business.
He explained that the organisation focused on capital allocation, which helped to achieve the present result and create more opportunities.
“Disciplined capital allocation continues to remain at the core of our activities evidenced by our continual deleveraging of our debt levels to the current balance of US$350m. In 2018, we reinstated the dividend, increased capital investments and with the resources and headroom in our capital structure, we are equipped to capitalise on organic and inorganic growth opportunities as they may arise.” He added.
The result showed 2018 full year average working interest production at 49,867 boepd and represents an overall increase of 35% year-on-year. Within this, liquids production was up 44% year-on-year whilst gas production was up 27% year-on-year.
The 2018 figures reflect a production uptime of 85%, compared to a production uptime of 50% in full-year 2017 when the first six months of that year continued to be impacted by force majeure at the Forcados terminal. Overall reconciliation losses arising from the use of third-party infrastructure were around 8% for the year.
License renewal for OMLs 4, 38 and 41 obtained with a new expiry date of 21 October 2038. US$25.9mn renewal bonus paid to ensure all conditions have been met (renewal bonus included in 2018 capex).
The statement contained, “Full-year revenue US$746mn; operating profit US$310mn, profit before deferred tax US$238mn; after adjusting for deferred tax of US$91mn, net profit after tax stood at US$147mn
“The board has recommended a final dividend of US$0.05 per share. Cash flow from operations US$502 million significantly ahead of capital expenditures of US$88 million.”
Successfully concluded debt refinancing in Q1 2018, including debut US$350mn bond which diversifies the long-term capital base and new four years US$300mn RCF
Cash at bank US$585mn and gross debt US$450mn resulting in a net cash position of US$135mn at end 2018, was also included in the result.
“Amukpe to Escravos alternate export pipeline nearing completion; anticipated to be fully commissioned and operational in Q2 2019, ramping up to initial permitted capacity of 40 mblpd during Q3 2019; access to three separate export routes at our western assets and two at our eastern assets providing adequate redundant capacity will significantly de-risk distribution of oil production to market.” The result further stated.