Investors of Seplat Energy earn N77 billion in July stocks trading

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Investors of Seplat Energy Plc earned about N76.79 billion from the shares of the company in the month of July despite sustained sell pressure witnessed on shares of some blue-chip firms quoted on the Nigerian Exchange.

A report obtained from the NGX by Nairametrics explained that the oil and gas index which measures the performance of the oil and gas firms quoted on the NGX grew marginally by 2% or 10.94 basis points to closed at 556.28 index point at the end of trading on July 2022 as against the opening index of 545.34 index points at the beginning of the July 2022 trading.

Checks by Nairametrics showed that the oil firm stock gained by 10% month to date to N1,430.50 per share from N1,300 it opened the month trading.

Further analysis showed that Seplat Energy closed July at N1,3430.50 per share and N841,769 billion in market capitalisation on the Nigerian Stock Exchange (NGX) as against N1,300 per share and N764.977 billion in market capitalisation at the beginning of trading on July, hence earned a gain of N76.792 billion or 10 %.

Seplat Petroleum Development began the year with a share price of N650.00 and has since gained 120% on that price valuation, ranking it sixth on the NGX in terms of year-to-date performance.

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The oil and gas industry’s growth and profitability are still dependent on operator pricing and quantity, Agusto & Co has said.

The rating agency who stated this in a 2022 Oil & Gas Storage Industry Report said the decreased profit margins, idle or underused capacity, and constrained ability to pay operating and finance expenses could be countered by higher throughput revenue, product diversification plans and efficient downstream company operation.

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Half year results highlights

  • Seplat Energy Plc reported a rise of 238% in its half year 2022 profit before tax (PBT) to $209.9 million from $62.1 million year-on-year. The company also maintained a strong balance sheet with $350 million cash at bank.
  • In the company’s unaudited results for the six months ended 30 June 2022, revenue for the period under review also appreciated by 71% to $527 million from $308.8m year-on-year, with a dividend of US$2.5 cents per share declared.
  • The indigenous energy company also reported a 208.5% rise in gross profit to $274.3 million from $88.9 million year-on-year, and has committed to stopping routine flaring by the end of 2024.
  • Revenues up 71% from 6M 2021 to $527.0 million, higher realised oil prices of $107/bbl

What the company is saying

  • Commenting on the results, which were released to the NSE and LSE, Roger Brown, Chief Executive Officer, Seplat Energy Plc said: “Production increased strongly in the second quarter, achieving 52.4 kboepd across our operations, and we expect to maintain higher volumes for the rest of the year now that we plan to export liquids through the more secure Amukpe-Escravos Pipeline.
  • Having divested our interest in Ubima because of its high production costs and export difficulties, we recently acquired a 95% interest in the Abiala marginal field and plan to begin operations there next year using existing infrastructure in OML 40. This is consistent with the strategy for low-cost, low-risk upstream growth we announced last year.
  • “We remain confident that our transformational acquisition of MPNU will be approved, adding significant reserves and production capacity that will strongly reinforce Seplat Energy’s position as Nigeria’s leading indigenous oil and gas producer.
  • “We have recently launched a roadmap for decarbonisation, with a clear path to ending routine flaring by 2024. In addition, our ‘Tree for Life’ initiative will plant five million saplings to sequester carbon across five states. All of these initiatives demonstrate our strategic commitment to build a sustainable company that delivers energy transition for the benefit of all Nigerians.”

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