Seplat Petroleum expects $600 million revenue for 2015

SEPLAT Petroleum Development Company Plc, listed on both the Nigeria Stock Exchange (NSE) and London Stock Exchange (LSE), has announced that the company is expecting revenue of $550 million to $600 million in 2015 operations. The company posts FY 2015 working interest production of 43,372 boepd – ahead of guidance and up +41per cent year-on-year.
Capital expenditures incurred during 2015 are expected to be about $152 million, slightly below guidance of $168 million.

According to the Company, despite the challenging year for the industry, Seplat still delivered best-in-class production growth in 2015 with liquids output up 20 per cent and gas output up 119per cent year-on-year, corresponding to a 41per cent increase overall.

The Chief Executive Officer of the company, Austin Avur said: “With a growing consensus that low oil prices are set to remain for at least the near term, we remain focused on what is in our control and steps we can take to maximise profitability.
“Production strength, with past investment strategies translating into the uptick in output, provides some cushion to lower oil pricing and our gas business takes on additional importance by providing a revenue stream that is de-linked to the oil price together with revenue continuity in the event of disruptions to third party oil export infrastructure.

According to the company, gas business (OMLs 4, 38 and 41)2015 was a period of notable growth and progress for Seplat’s gas business.

Around midyear, the company noted that it commissioned the new 150 MM scfd Oben gas plant which correspondingly saw deliveries into the domestic market increase sharply, with peak gross deliveries to date hitting 332 MMscfd in September 2015.
“The next phase of expansion of the Oben gas plant is to install a further 3 x 75 MMscfd processing modules (aggregate 225 MMscfd capacity) that will take overall processing capacity up to a minimum of 525 MMscfd.

“The three modules have been ordered with delivery anticipated in Q3 2016 and installation and commissioning in Q4, 2016 As part of the expansion work undertaken in 2015 the Company has already pre-invested in the necessary ancillaries and space to accommodate the additional modules.”

Following completion of the two 50,000 bbl storage tanks at the Amukpe field in 2015 the Company explained that it currently has the means to store associated condensate volumes and achieve continuity of gas production and sales should the TFS be shut in.

“Gas prices in Nigeria are the linked to oil price. DSO pricing remains at US$2.5/Mscf and under willing buyer/willing seller commercial contracts pricing continues to improve to levels of US$3.5/Mscf and above. Corporate and financial Revenue for full year 2015 is expected to be in the order of US$550 million to US$ 600 million on an average oil price realisation of approximately US$ 47/bbl and average gas price realisation of approximately US$2.6 /Mscf.”

The Company explained that it has put in place deferred premium puts covering a volume of 3.3 MMbbls over the first six months of 2016 at a strike price of US$45/bbl.