Seplat Energy Plc, a leading Nigerian energy group linked to oil mogul Ambrosie Bryant Orjiako, has recovered from last year’s losses, with profits in 2021 exceeding $117 million, owing to pricing gains from the rise in crude oil prices during the period under review.
According to Seplat’s audited financial statement, the group’s revenue climbed by 38.2 percent from $530.5 million in 2020 to $733.2 million, despite a drop in oil output from 51,183 barrels per day to 47,693 barrels per day at the end of 2021.
Aside from the persistent increase in the price of crude oil throughout the year, efficient cost-cutting tactics implemented by management in 2021 also played a vital role in the turnaround from an $85.3-million loss in 2020 to a profit of $117.1 million at the end of 2021.
While commenting on the financial performance, CEO Roger Brown said the outages at Forcados Terminal, one of the group’s oil terminals in Nigeria, had a negative impact on the group’s 2021 performance.
He went on to say that as part of its effort to diversify and derisk routes to market, the business is ensuring increased revenues through dramatically improved uptime and decreased reconciliation losses.
“Furthermore, once we have completed our acquisition of Mobil Producing Nigeria Unlimited (MPNU), we will add significant production from offshore assets with dedicated export terminals that also have higher availability and lower reconciliation losses,” he said.
Seplat drilled and finished eight wells during the time, with an extra well completed in early January 2022. However, oil output in 2021 will fall from 51,183 to 47,693 barrels per day.
The drop in the group’s oil level might be attributed to technical issues and disruptions caused by maintenance on certain of the company’s oil terminals during the year.
The business revealed that lower production from the Western Assets had an impact on its volumes as a result of the interruption caused by the suspension of exports at the Forcados Oil Terminal.
The management added that the impact of unplanned downtime in the second half of the year amounted to a deferment of working interest production; however, the impact of future outages on production will be mitigated by the new Amukpe-Escravos Pipeline, which will be launched following mechanical completion and hydrocarbon introduction.
In an effort to sustain growth in its revenue through increased oil volumes, Seplat entered into a final agreement to purchase the entire share capital of MPNU in a deal valued at $1.58 billion, including contingent payment.
Seplat’s oil output will increase by 186 percent, from 51,000 barrels per day to 146,000 barrels per day, while liquid and gas reserves will increase by 170 percent and 14 percent, respectively, to 650 million barrels and 1,712 billion standard cubic feet of gas, according to the agreement, which is the first transaction disclosed since the Nigerian government passed the Petroleum Industry Act.
