Ten years after its initial public offer (IPO) which was held in 2014, Seplat Energy has generated $1.7 billion in free cash flow and invested over $57million to support community projects focused on healthcare, education and empowerment.
These were disclosed by Roger Brown, Chief Executive Officer, Seplat Energy, at a press briefing marking the oil company’s 10-year anniversary of dual listing at the Nigerian Stock Group (NXG) and the London Stock Exchange (LSE) in Lagos on Thursday.
- Free cash flow is defined as “the money a company has left over after paying its operating expenses (OpEx) and capital expenditures (CapEx),” according to Investopedia.
Brown explained that Seplat Energy has made a significant progress post-IPO, acquiring eight onshore blocks in the Niger Delta and generating an average annual FCF of $264m.
With over 500 direct staff, the company, now known as most successful indigenous energy company in Nigeria, has supported hundreds of jobs indirectly in communities and the supply chain.
- “Our success story driven by operational excellence, strong partnerships and credibility in international capital markets,” Brown told journalists.
$2.8bn tax paid
At a point when firms evade and avoid taxes, Seplat Energy has made enormous contributions to the growth of the Nigerian economy.
Post-IPO, it has paid $2 billion in taxes to the Nigerian government since 2014.
Throwing light on this major stride, Eleanor Adaralegbe, Seplat Energy’s Chief Financial Officer-Designate, said the company has made a total of $2.8bn contribution in taxes and royalties to the Federal Government over the past 13 years.
The company’s contribution, according to her, include $1.54 billion paid in royalties; $329m of petroleum profits tax, and $273m on value added tax (VAT).
Others are: $259m of withholding tax, $126m of Pay As You Earn (PAYE), and $276m to the Niger Delta Development Commission (NDDC), among others.
Shareholder dividend
In 2014, Seplat Energy made its intentions clear to become a major oil company in Africa’s most populous nation. As a result, it embarked on a landmark IPO, raising over $500 million on the LSE and the NGX.
Ten years after, Seplat Energy has returned $575 million to shareholders, meaning that shareholders gained additional $75 million as return on their investment. Core dividend to shareholders increased by 20% in 2023 to S$12c per share.
- “With $575m paid as dividends since our IPO in 2014, we have successfully returned all the capital we raise at IPO,” she noted.
- “Dividend has been paid in nine out of past 10 years,” she said, stressing that the main reason for reduced dividend in 2016/17 was the unavailability of infrastructure, particularly the Forcados, which went offline for 16 months.
Investments grow
Seplat Energy acquired Eland Oil & Gas, which was the first acquisition of a United Kingdom-listed company by a Nigerian firm in December 2019. Eland had held participating interests in OML 40 and the Ubima marginal field.
The Eland investment followed earlier acquisitions such as Belema Oil Producing (an energy exploration outfit) in February 2015 and Assa North-Ohaji South (ANOH) Gas Processing (an energy refining company) in March 2019.
In June 2013, Newton Energy, a wholly-owned subsidiary of Seplat, reached an agreement with Pillar Oil to acquire a 40% participating interest (non-operated) in the Umuseti/Igbuku fields (OPL 283). Also in 2015, the group purchased a 40% participating interest in OML 53, onshore north-eastern Niger Delta, from Chevron Nigeria Ltd and had a revenue interest in OML 55, south-eastern Niger Delta.
In January 2017, Seplat incorporated a new subsidiary, ANOH Gas Processing Company (AGPC) Limited, a midstream gas company committed to the processing of gas from OML 53 for onward distribution to the local market. In August 2018, the group entered into a shareholder agreement with Nigerian Gas Processing and Transportation Company (NGPTC) to subscribe for equal ownership of AGPC.
The Seplat Energy portfolio now comprises eight oil blocks – direct interests in seven blocks in the Niger Delta area, four of which Seplat operates and one further of revenue interest. The company also established a robust Global Memorandum of Understanding with the local communities in the Niger Delta, setting out rules of engagement and mutual beneficiation.
The major effect of these acquisitions has been to position the company as the leading partner for Nigerian domestic gas supply for the power sector and a significant contributor to the crude supply to the export markets.
They also culminate in delivering key performance indicators such as 478 million barrels of oil equivalent (MMBOE) in 2P reserves, 47,758 barrels of oil equivalent per day (BOEPD) production capacity, adjusted revenue of $1.06 billion, adjusted EBITDA OF $448 million and share value of GBP867.96 million (N1.98 trillion) recorded as at its last reporting period in December 2023. The company has about 588 million shares outstanding on the Nigeria Exchange.
- “We are a leading supplier of gas to Nigeria’s domestic gas-to-power market. At times, our gas powered 25-30% of Nigeria’s domestic grid,” Brown said.
He explained that the company has over $800million available liquidity and credible access to global capital markets
He added that Seplat Energy has emerged as a strong voice and a thought leader in the African energy landscape.
- “We have diversified Seplat Energy investor base, enhancing relationships with current and potential investors across the world.”
Seplat stock price stood at £145 in LSE and N3,370 on NSE on Tuesday, April 16.
