Chris Ndibe
Seplat Petroleum Development Company Plc says its cash position remained strong in the 2020 financial year with $318 million of cash generated from operations,
Dr A.B.C. Orjiako, the Board Chairman, disclosed this at the Eighth Annual General Meeting (AGM) held virtually on Thursday in Lagos.
Orjiako said that the amount was significantly more than the $150 million invested for future growth, while the company’s capital expenditure in the 2020 business year was higher than the $125 million spent in 2019.
He said that this demonstrated the company’s commitment to growth, as it voluntarily repaid $100 million of its Revolving Credit Facility and ended the year with $225 million in cash and net debt of $440 million.
According to him, the company’s average working interest production was 51,183barrels per day, including 33,714 bopd of liquids and 101MMscfd gas (17,469boepd).
He said: “Of this, our Eland assets contributed 8,855bopd, or 26 per cent of total liquid volumes. Our financial performance enabled us to maintain our commitment to paying dividends.
“While other companies were cutting back or cancelling payments for the 2019 financial year, because of prevailing uncertainties, we honoured our commitment and paid a final dividend of US$0.05, for a total dividend of US$0.10 for 2019.
“In October 2020, we announced an interim dividend of US$0.05 and the Board has since approved an additional top-up of US$0.05, maintaining our US$0.10 dividend for the 2020 financial year.
“Since we raised $535 million at our initial public offering in May 2014, we have returned $344 million to shareholders in the form of dividends.
“The strengthening of our Board is part of our ongoing desire to achieve world-class governance of our company. Six of our 13-member Board are independent and we continue to work towards increasing diversity.
“In addition, as we announced in March, we have taken the bold decision to eliminate all Related-Party Transactions – a move that exceeds the requirements of the UK Code of Corporate Governance,” he said.
Orjiako said that the responsibility of the board to plan for the long-term sustainability of the company, as scenario analyses on Seplat’s assets have been conducted under different climate change and demand scenarios.
Whilst looking towards a future in which Seplat is much more involved in promoting low carbon environment in its operations and the company adopting Seplat Energy as its new name following the passage of the resolution at its AGM.
“Such a transition will involve significant new innovations, technology, skills and relationships, compared to our existing expertise of subsurface exploration, drilling and hydrocarbon processing.
“We are determined to be a major part of Nigeria’s future energy mix and help drive the country towards more sustainable energy generation.
“Our ANOH Gas Processing Plant will be a major step forward in Nigeria’s drive to reduce carbon emissions, replacing potentially millions of small-scale, inefficient, and polluting generators with cleaner utility-scale power generation fired by Nigerian natural gas.
“In addition, we intend to increase our disclosure of environmental, social and governance (ESG) data, by adopting the recommendations of the Task Force on Climate-related Financial Disclosures and will commit to reporting CO2 emission data to the Carbon Disclosure Project in the near future.
“Helping our communities Part of our ESG commitment is already apparent in the long-term projects we implement in our host communities. As the Covid-19 pandemic struck Nigeria, it was our duty to help our host communities and States in whatever ways we could.”
In the same vein, Mr Roger Brown, Chief Executive Officer, Seplat, said there was pressure to reduce oil extraction and the carbon emissions it creates; but that, he noted, depended on the rest of the world adopting less oil-intensive ways to travel and generate power.
According to Brown, Nigeria’s per-capita energy consumption and carbon emissions are actually very low, and its national electricity grid is still very poorly developed and the reason the country is so reliant on small-scale diesel generation to satisfy its energy needs and this is the problem we need to address most urgently.
Mr Emeka Onwuka, Chief Financial Officer, Seplat, said the company’s robust financial performance in 2020 demonstrated the importance of a prudent approach to managing its finances, focusing on capital allocation, revenue diversification, cost control, hedging and debt management.
Onwuka added that despite a challenging year, the firm repaid $100 million debt, invested $150 million for growth and maintained our dividend at $0.10 per share for the year.
