Seplat Petroleum Development Company (Seplat) has announced a growth of 13.4 per cent in profit before deferred taxes to $270 million in its audited results for the financial year ended Dec. 31, 2019.
This is contained in the company’s audited results released on Monday on the Nigerian Stock Exchange and London Stock Exchange.
The result showed a revenue of $698 million with total capital expenditure of $125 million and $114 million on oil and gas assets.
Cash flow from operations stood at $338 million; cash at bank $333 million and final dividend was $0.05 per share.
Commenting on the result, Mr Austin Avuru, the company’s Chief Executive Officer, said it remained a resilient company.
“As we enter a challenging phase for the global economy, Seplat will benefit from being a resilient company built on the solid foundations of prudent financial management and the careful mitigation of risk.
“We have previously been tested by crisis. We successfully navigated the twin challenges of the 2014/2015 oil price shock, which was immediately followed by the 16-month Trans Forcados shut-in, which drastically reduced our liquids production.”
“Thanks to our flexibility in managing cash flows, we emerged a stronger and better-funded company, ready to take advantage of new opportunities.
“Compared to those difficult periods, today’s Seplat has more cash on its balance sheet and is even more robust and diversified, thanks to our continuing investments in gas, with its long-term contracts and independence from oil price volatility.
“We are a low-cost producer and will continue to manage our finances prudently.
“With the recent addition of Eland and the availability of new pipelines, our oil business is broadening and derisking its production fields and routes to market to assure even greater security of revenues in the future,” Avuru said.
On future plans, he said the company would focus investment on only highest returning projects, carefully balance future needs with prevailing market realities.
“The challenges before us may be significant, but we are confident that the resilience and discipline of our business will help us consolidate our position as Nigeria’s leading independent oil and gas producer.
“The emergence of the coronavirus pandemic in the first quarter of 2020 and pressure on oil prices in March, have placed a premium on solid financial management that focuses upon low-cost production, robust cash management, a strong balance sheet and focused investment in high-return projects for sustainable future growth.
“The business is hedged against low oil prices and a significant proportion of our revenues now come from gas, which offers further protection from oil price volatility.
“The company has low production costs and can remain profitable even at lower oil prices.
“We have significant cash resources available and will manage our finances prudently in 2020, expecting now to invest just $100 million of capital expenditure and with a target of three new wells across our portfolio,” he stated.