Seplat Energy PLC, a Nigerian independent energy company listed on both the Nigerian Exchange and the London Stock Exchange, has called for prudent management of oil and gas assets in Nigeria in the country’s quest to drive growth in the energy sector and encourage expansion.
The Chief Executive Officer, Seplat Energy, Mr. Roger Brown, gave this insight at the Centre for Petroleum Information (CPI) Petroleum Policy Roundtable (PPR XXIV) held in Lagos.
Delivering his keynote address titled ‘Managing inherited Assets: Rising to the Challenge’, Brown said in managing inherited oil/gas assets; cash generation should be ensured whilst the operators drive growth and development of the assets.
Referencing the Seplat Energy case, he said from the company’s 14-year experience in managing inherited assets, production has been increased across its portfolio of acquired assets; of which acquiring and managing assets has driven the company’s journey to becoming Nigeria’s leading independent energy supplier.
Brown said: “At Seplat Energy, 2P reserves rose 9 per cent Year-on-Year to 478 MMboe with a 47 per cent:53 per cent split between liquids and gas. The increase in reserves was due to discovery of new reservoirs in OML 40, booking of volumes from the Abiala marginal field, and conversion of 2C resources to 2P in OML 53 2P + 2C reserves and resources 540 Mmboe at end 2023.
“Post-IPO (Initial Public Offer), our investment in gas infrastructure has yielded fruits with oil and gas production mix now at 59 per cent and 41 per cent respectively (at the end of Full-Year 2023) from 83 per cent and 17 per cent pre-IPO. Investments in alternative evacuation routes have helped to stabilise production at 44.0 kboepd. Aggregate production has grown at a CAGR (Compound Annual Growth rate) of 5.4 per cent post-IPO”.
The Seplat Energy CEO added: “Tax contribution to Nigeria stands at $2bn (Royalties, PPT, PAYE, NCD. $2.8bn total since company incorporation); $1.6bn capex invested in Nigeria ($2bn total since company incorporation); $535m total IPO raised (all at IPO); $575m total dividends paid (total of $616m including $41m pre-IPO dividends). Clearly, strong cash generation from prudent management of our assets has supported growth and expansion”.
Seplat Energy business has continued to generate strong cash flows reflected in its strong FCF (Free Cash Flow) and NCFO (Net Cash from Operations) generation. Post-IPO, the company generated $1.7bn in FCF. Excluding 2014 and 2015 where it made significant capex investments post-IPO, the company has generated an average annual FCF of $264m.