With decline in revenue and foreign exchange losses, Seplat Petroleum Development Company Plc, has announced a N12.8 billion loss for the half year (H1 2016) ended June 30, 2016 unaudited results.
The indigenous oil and Gas Company listed on both the Nigerian Stock Exchange and London Stock Exchange, had reported a profit after tax of N8.2 billion in prior half year of 2015.
Profit before tax for the period under review stood at a loss of N12.2 billion as against N8.1 billion recorded in H1 2015.
Seplat’s revenue dropped by 40 per cent from N48.76 billion in H1 2015 to N29 billion in H1 2016, while foreign exchange losses stood at N6.38 billion as against a gain of N2.6 billion recorded in H1 2015.
Seplat’s Chief Executive Officer, Austin Avuru, said, “The shut-in and suspension of oil exports at the Forcados terminal since mid-February means we have faced significant challenges in the first half of the year.
“However, our underlying fundamentals remain strong and we continue to invest to grow our gas business at a rapid rate.”
He explained that, “the first half results have been heavily impacted by events outside of the Company’s control at third party operated infrastructure. We expect the second half to see a resumption of exports via the Forcados terminal and concurrently a regular off take schedule established via the Warri refinery jetty, which in turn will also help ensure gas sales into the domestic market are deconstrained.
“Meanwhile, Phase II expansion of the Oben gas processing plant remains on track and is set to increase our gross processing capacity from the current 300MMscfd to a minimum of 525MMscfd by year end. Although 2016 to date has proven challenging, we remain committed to our long-term strategy of maximising production and cash flows from our operated blocks to deliver value for our stakeholders,” he added.
From the financial position, the company’s total assets increased by 29 per cent from N545.2 billion as at December 2015 to N703.79 billion as at June 2016.
The company explained that it recorded a working interest production of 25,695 bpd for the first six months down, 21 per cent year-on-year due to shut-in of the Forcados export terminal from mid-February, liquid production down -51 per cent year-on-year at 11,526 bopd; gas production up 59 per cent year-on-year at 85 MMscfd.
Part of the company’s financial highlights include, “Alternative crude oil evacuation route established via the Warri refinery and first cargo sold FOB from the Warri refinery jetty (funds received post period end on 8 July) to Seplat’s offtaker Mercuria. Following the successful initiation of barging operations the Company’s intention is to establish a regularised offtake pattern on a longer-term basis. This alternative liquids export solution will allow gas supply to be de-constrained
“Phase II expansion of the Oben gas processing facility remains on track. 3 x 75 MMscfd new processing modules have arrived in country with installation and commissioning expected by year-end to take overall Company processing capacity to a minimum of 525 MMscfd (gross)
“Continuing progress towards substantially reducing the NPDC receivables balance – confirmation received from Minister of State for Petroleum that 2016 cash calls will be paid current by NPDC. New funding protocol also agreed with additional crude oil allocation equivalent to around US$100 million due to Seplat in 2016 to offset against legacy balance.
“Seplat will also continue to withhold NPDC gas revenues. Additional oil entitlement to be assigned by NPDC’s funding partner, Seven Energy, to Seplat in 2017 onwards which will be monetised through Seplat’s offtaker Mercuria to fund future cash calls (initial arrangement to run for period of up to two years). The net receivable at June 30, was N98 billion
“Net loss for the first six months was $61million on gross revenue of $143 million; cash flow from operations before movements in working capital was $42 million, against capital investments incurred of $17 million
“Cash at bank and net debt at period end stood at $180 million and $598 million respectively. Owing to the prolonged shut-in of the Forcados terminal the Company has taken a prudent approach and entered discussions with lenders in the seven year secured term facility to amend the existing “front-ended” sculpted principal repayment profile to a more balanced repayment schedule over the remaining loan life.”
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