RNS Number : 6089Q
Seplat Petroleum Development Co PLC
01 March 2021

Please see the Full Audited Results in attached PDF

Seplat Petroleum Development Company Plc

Audited results for the year ended 31 December 2020 


Lagos and London, 1 March 2021: Seplat Petroleum Development Company Plc ("Seplat" or the "Company"), a leading Nigerian independent energy company listed on both the Nigerian Stock Exchange and the London Stock Exchange, announces its audited results for the financial year ended 31 December 2020. 

Operational highlights 

·    Working-interest production within guidance at 51,183 boepd, despite demand fall and OPEC+ quotas 

·    Liquids production of 33,714 bopd, gas production of 101 MMscfd

·    Eland OML40/Ubima assets produced 8,855 bopd, 26.3% of Group liquid volumes   

·    Low unit cost of production at $8.90/boe, with cost-cutting initiatives ongoing, particularly at OML40/Ubima

·    Drilled/completed nine wells and brought eight onstream in 2020

·    ANOH project now budgeted under original $700 million FID estimate, but COVID-19 related delays to H1 2022  

Financial highlights

·    Final dividend of $0.05 per share recommended ($0.10/share for full year)

·    EBITDA of $265.8 million, operating profit of $121 million (before non-cash impairments and unrealised fair value losses)

·    Strong cash position of $259 million after $100 million RCF repayment, $58 million dividends paid in the year, and $150 million capex; net debt at $440 million with most maturities after 2021

·    IAS 36 COVID-19 impact assessment and IFRS 9 non-cash impairment provision of $144.3 million, majority booked in Q2 2020    

Corporate updates

·    Creation of New Energy unit to manage gas processing and future low carbon to zero carbon initiatives

·    AGPC financing signed in February 2021, $260 million raised, with commitments for $450 million

·    Advanced stage to extend maturities for existing Eland RBL, raise additional funding via offtaker financing for Elcrest capex    

·    $5.0 million funding of share purchase programme, by Trustee, for Seplat LTIP, starting immediately

·    Board directive to eliminate Related-Party Transactions by end of 2021   

Outlook for 2021

·    Full-year production guidance of 48-55 kboepd, subject to market conditions

·    Full-year capex expected to be around $150 million with a focus on gas projects and an exploration well to meet reserves replacement targets


Roger Brown, Chief Executive Officer, said:

"2020 was a challenging year for the Company but Seplat has once again shown its resilience and ability to overcome challenges and deliver production in line with guidance, operating with minimal incidences of COVID-19 cases.

From the $330 million of cash generated from operations, we have increased our capital investment, invested in ANOH and voluntarily paid down $100 million of debt, further deleveraging the balance sheet. Despite seeing the lowest oil prices in our 10-year history, we have continued to honour our commitment to shareholders of a regular income stream on their investment, by maintaining a total dividend of $0.10 per share for the year."

"Gas is the lower-carbon feedstock for affordable electricity for Nigeria's young and rapidly-growing population. Seplat is leading Nigeria's transition away from spending scarce foreign currency on imported, expensive, high-emission diesel-generated electricity and we believe this will provide the necessary baseload for a functioning electricity grid that will allow renewable energy to take its place, as we see in the developed world, which in large parts is still fuelled by coal. The energy transition in Nigeria must balance both the environmental and the social agenda."

"Our flagship ANOH project, with the Nigerian Gas Company, is now fully funded and we have made excellent progress in difficult times, with major gas processing units expected to arrive in Nigeria in Q3 2021, installation to commence before the end of the year, mechanical completion and pre-commissioning in Q1 2022 and first gas flowing to customers before the end of H1 2022, at a lower expected cost of up to $650 million."

"We remain committed to providing shared value for all of our stakeholders. During the year, with our Government partners, we provided medical beds and other palliatives to our communities and have started construction on a
200-bed infectious diseases hospital. Seplat continues to focus on employment opportunities for communities, education, healthcare and knowledge transfer and local capacity development."


Summary of performance


$ million




FY 2020

FY 2019

% change

FY 2020

FY 2019







Gross profit






Impairment of assets *












Operating profit (loss)






Profit (loss) before tax






Cash flow from operations






Working-interest production (boepd)






Average realised oil price ($/bbl)






Average realised gas price ($/Mscf)






*Includes impairments of $114.4 million on revaluation of assets and $29.9 million on financial assets

**Adjusted for non-cash items including impairments, fair value adjustments, abandonment, and exchange loss


Outlook for 2021

For 2021 we expect to produce an average of 48,000 - 55,000 boepd, taking into account the impact of OPEC+ quotas. We continue to hedge against oil price volatility and expect a higher proportion of revenues to come from long-term gas contracts at stable prices.    

We have significant cash resources and will continue to manage our finances prudently in 2021, expecting to invest $150 million of capital expenditure across the full year. We remain confident that our ongoing cost-cutting initiatives and prudent management of cash will enable further reductions in debt, whilst supporting dividend payments and investment for growth.   

Following its successful funding, the completion of the ANOH project remains a major priority. Although we expect some COVID-19 related delays to push completion into early 2022, following a cost optimisation programme we now expect the project to cost no more than $650 million, substantially below the $700 million budget previously stated at Final Investment Decision (FID).    



Seplat Petroleum Development Company Plc

Roger Brown, Chief Executive Officer

Emeka Onwuka, Chief Financial Officer

Carl Franklin, Head of Investor Relations

Ayeesha Aliyu, Investor Relations

Chioma Nwachuku, General Manager, External Affairs & Communications

+234 1 277 0400 
+44 203 725 6500





FTI Consulting

Ben Brewerton / Sara Powell

+44 203 727 1000

Citigroup Global Markets Limited

Tom Reid / Luke Spells

+44 207 986 4000

Investec Bank plc

Chris Sim / Rahul Sharma

+44 207 597 4000


Results call

At 09:00 GMT / 10.00 WAT on Monday 1 March 2021, the Executive Management team will host a conference call and webcast to present the Company's results. 

The presentation can be accessed remotely via a live webcast link and pre-registering details are below. After the meeting, the webcast recording will be made available and access details of this recording are also set out below.

A copy of the presentation will be made available on the day of results on the Company's website at  .

Event Title:

 Seplat plc: Full Year Results

Event Date:

 9:00am (London) 10:00am (Lagos) Monday 01 March 2021

Webcast Live Event Link:

Conference call and pre-register Link:

Archive Link:

The Company requests that participants dial in 10 minutes ahead of the call. When dialling in, please follow the instructions that will be emailed to you following your registration.

Notes to editors

Seplat Petroleum Development Company Plc is Nigeria's leading indigenous energy company. It is listed on the Nigerian Stock Exchange (NSE: SEPLAT) and the Main Market of the London Stock Exchange (LSE: SEPL).

Seplat is pursuing a Nigeria-focused growth strategy and is well positioned to participate in future asset divestments by international oil companies, farm-in opportunities, and future licensing rounds. The Company is also a leading supplier of gas to the domestic power generation market. For further information please refer to the Company website,

Important notice

The information contained within this announcement is unaudited and deemed by the Company to constitute inside information as stipulated under Market Abuse Regulations. Upon the publication of this announcement via Regulatory Information Services, this inside information is now considered to be in the public domain.

Certain statements included in these results contain forward-looking information concerning Seplat's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors, or markets in which Seplat operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances and relate to events of which not all are within Seplat's control or can be predicted by Seplat. Although Seplat believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Seplat or any other entity, and must not be relied upon in any way in connection with any investment decision. Seplat undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.


Operating review


Seplat's portfolio comprises direct interests in seven oil and gas blocks and a revenue interest in one other block. This portfolio provides the Company with a robust platform of oil and gas reserves and production capacity, together with material upside opportunities through future development.

Working-interest reserves for the 2020 financial year



Working-interest 2P reserves at 1/1/21



Working-interest 2P reserves at 1/1/20





Oil equivalent





Oil equivalent


Seplat %





Seplat %




OMLs 4, 38 & 41










OPL 283










OML 53










OML 55

Fin. interest





Fin. interest




OML 40































(1)       Eland has a 45% working interest in OML40 until the Westport loan is fully repaid in accordance with the loan agreement ($417 million loan balance as at
31 December 2020), reverting to 20.25%.

(2)       Eland has an 88% Working Interest in the Ubima marginal field until the carry has been reached, reverting to 40%.

(3)       Ryder Scott has assessed that due to lower oil price forecasts from 2020, more oil will be required to recover the loan amount resulting in an increased reserves allocation to Eland


Total working-interest 2P reserves, as assessed independently by Ryder Scott Company, L.P., at 1 January 2021, stood at 499.4 MMboe, comprising 240.5 MMbbls of oil and condensate and 1,501.3 Bscf of natural gas. The change represents an organic decrease in overall 2P reserves of 1.9% year-on-year, due to production of 12.3 MMbbls but mitigated by revisions of previous estimates. Working-interest 2C resources stood at 94.8 MMboe, comprising 59.7 MMbbls of oil and condensate and 203.3 Bscf of natural gas.

Consequently, the Group's working-interest 2P reserves and 2C resources stood at 594.1 MMboe at 1 January 2021, comprising 300.2 MMbbls oil and condensate and 1,704.7 Bscf of natural gas.


Our oil and gas assets are located in the onshore land and swamp areas of the prolific Niger Delta in Nigeria. Principal areas of production are Edo, Delta, Imo and Rivers States. 

Working-interest production for the 2020 financial year










Oil equivalent




Oil equivalent


Seplat %








OMLs 4, 38 & 41









OPL 283









OML 53









OML 40





























(1)       Liquid production volumes as measured at the LACT unit for OMLs 4, 38 and 41; 40 and OPL 283 flow station. Volumes stated are subject to reconciliation and will differ from sales volumes within the period. 


Full-year total working-interest production for 2020 was within guidance and averaged 51,183 boepd. Within this, liquids production was up 40.9% year-on-year, reflecting the first-time contribution of the acquired Eland assets whilst gas production was down 22.9% year-on-year, because of Q1 maintenance and the impact of the COVID-19 pandemic on the economy. Production decline rates are at levels typical of the region at 10-15% per annum.

This represents an overall production increase of 10.1% compared with 2019 despite constrained production levels in Nigeria following cuts in OPEC+ production quotas and tank-top issues experienced at the terminal arising from the pandemic and the general impact of COVID-19 on operations.

There was 83% uptime for the Trans Forcados Pipeline during the period and the produced liquid volumes from OMLs 4, 38 and 41 were subject to 9.4% reconciliation losses.

Oil business performance

The Group's oil operations continued despite the COVID-19 crisis and produced an average 33,714 bopd on a working-interest basis during 2020, up 40.9% on 2019.

This increase reflects a maiden contribution of 8,855 bopd (26.3% of Group liquid volumes) from the OML 40 and Ubima assets, as well as higher production from OML 53 compared to 2019. Exports from the Group's operations were constrained by approximately 410,000 bbls on a gross basis as a result of the OPEC+ production cuts implemented in the third quarter of 2020. Production output increased as a result of wells drilled earlier in the year, which has necessitated discussions with the DPR and NNPC for increased quotas to reflect this uptick.

During the period, six oil wells were drilled/completed (Sapele-35, Ovhor-6ST, Ovhor-20, Ohaji South-5, Ohaji South-6 and Gbetiokun-5), while the Extended Well Test for Ubima continued with production up to 1,200 bopd. The wells flowed at a combined initial rate of approximately 18,700 bopd. Production improvement through Well, Reservoir and Facilities Management (WRFM) interventions included rigless restoration and optimisation activities that resulted in optimised well head production and LTF performance.

The average price realised per barrel in 2020 was $39.95 (2019: $64.40).

OMLs 4, 38 & 41

Seplat holds a 45% working interest in OMLs 4, 38 and 41, with the Nigerian Petroleum Development Company (NPDC) holding the remaining 55% interest.

In OML 4, the partners drilled two new gas production wells in the second half of the year. Oben-49 was completed in the period with an initial gross production rate of 35 MMscfd of gas and 600 bopd of condensate. Oben-50 came onstream in the first quarter of 2021.

In OML 38, further to the earlier commissioning of the liquid treatment facility ('LTF') at Amukpe, we undertook a crude quality upgrade project aimed at achieving an export-grade specification of 0.5% BS&W. By doing this, we have eliminated the cost component of crude handling charges that have historically been incurred for evacuating wet crude to the Forcados terminal and freed up additional ullage on the export pipeline for dry crude. The upgrade ensures the ability to produce more than 40,000 bopd of dry crude. Further optimisation of the LTF, with additional automation to achieve less than 0.5% dry crude and 60,000 bopd dry crude, is expected to be completed in the first half of 2021.

The two wells completed in the period, Ovhor-6ST and Ovhor-20, came onstream at a combined average gross rate of 5,200 bopd. In a bid to realise the full potential of the wells in this area, additional bulk lines were laid and we expect will be commissioned in first quarter of 2021.

In OML 41, the ongoing focus was on full development of Sapele Shallow, which overlies the productive reservoirs in the main Sapele field and is estimated to hold a significant accumulation of oil (around 500 MMbbls STOIIP). In 2020, one well, Sapele-35, was completed with a potential initial gross rate of approximately 1,000 bopd.

OPL 283

Seplat holds a 40% working interest in OPL 283, alongside partner Pillar Oil.

Following the conclusion of the Anagba-1 appraisal well, Pillar-Newton JV and other Partners have executed the Pre-Unitisation Agreement, Crude Handling Agreement and Facility Services Agreement for the Ashaka/Anagba fields. Production allocation to Newton commenced in September.

The Igbuku 3D seismic data acquired by Pillar-Newton JV was interpreted and formed the basis for the Integrated Petroleum Engineering Studies, which along with the Field Development Plan will underpin the Igbuku gas development. The planned Igbuku re-entry was temporarily put on hold due to cuts in capital expenditure, given the challenging year. However, the team ensured that the Interim Crude Supply and Associated Gas for power swap agreements were executed in the period.

OML 53

Seplat holds a 40% working interest in OML 53, with the National Petroleum Investment Management Services (NAPIMS) holding the remaining 60% interest.

Seplat completed two wells at the Ohaji South (OHS) oil field, OHS-5 and OHS-6. The two wells came onstream in the third quarter of 2020 at a combined average production rate of 5,000 bopd, thus ramping up production from the acreage from c. 6,500 bopd to achieve an exit rate of c. 11,500 bopd.

Infrastructure projects completed during the year were focused on supporting production growth from Ohaji South field, which included the upgrade of existing 10,000 bopd Early Production Facility (EPF) to 15,000 bopd capacity, construction of 4"x10km flowlines, 8"x12 km bulkline and capacity expansion of remote manifold at Ohaji South field.

In December, Seplat signed a Crude Purchase Agreement (CPA) with Waltersmith Petroman Oil Limited. The CPA is for the supply of between 2,000 and 4,000 bopd from existing working-interest production from the Ohaji South Field within OML 53, for Waltersmith's new 5,000 bopd modular refinery at Ibigwe Field, in Imo State.

Previously, Seplat's share of Ohaji South crude was primarily evacuated to the export terminal via a third-party Crude Handling Agreement with Waltersmith. This new agreement benefits Seplat by selling its crude oil directly to Waltersmith for refining, thereby eliminating crude losses and downtime experienced along the evacuation and export route. The transaction will also boost the capacity of Waltersmith in providing its products particularly to the immediate region of our operations thereby supporting Seplat's commitment to national energy security.

Apart from its oil, OML 53 has substantial gas reserves that can provide feedstock for the ANOH Gas Processing Plant that Seplat is building in partnership with the National Gas Company (NGC). A portion of dry gas production (70 MMscfd) from the plant has been earmarked to meet the domestic supply obligations associated with the OML 53 reserves.

At the upstream supplying ANOH, four wells are planned to be delivered by the upstream operator, Shell Petroleum Development Company (SPDC) in 2021. SPDC has commenced the drilling for the first set of two wells scheduled to be completed in Q2 2021, which will be followed by another set of two wells scheduled to be completed in Q4 2021.

OML 55

In accordance with the revised commercial arrangement that was agreed in July 2016, which provides for a discharge sum of $330 million to be paid to Seplat over a six-year period through allocation of crude oil volumes produced from OML 55, Seplat received payments amounting to $4.8 million in 2020. Total payments received from inception to the end of 2020 stood at $124.8 million and the outstanding discharge sum to be paid to Seplat is $205.2 million. Recovery during the year was impacted by OPEC+ production cuts and low oil prices.

In a bid to sustain production from this block, Seplat's Asset Management Team has received the field data for technical evaluation to resolve production challenges that have delayed target recovery of the investment.

In 2021, Seplat will continue to monetise liftings towards full recovery of the $330 million discharge sum.

OML 40

Seplat completed the acquisition in the United Kingdom of the entire issued share capital of Eland in December 2019. Eland has a 45% interest in Elcrest, which in turn owns a 45% working interest in OML 40. Elcrest is a joint venture between Starcrest (55%) and Eland (45%). OML 40 is operated by the Nigerian Petroleum Development Company (NPDC) on behalf of the NPDC/Elcrest Joint Venture. Since inception, Eland has arranged the funding of Elcrest's share in OML 40. The current aggregate loan balance owed by Elcrest at the end of 2020 was $520 million (including RBL) and until the $417 million shareholder loan is repaid, Seplat will continue to consolidate Elcrest into its results.

In 2020, Gbetiokun-5 was completed, with initial well production capacity of c.5,000 bopd. While the possibility of a permanent export pipeline solution is being explored, evacuation of processed crude via shuttle tankers from Gbetiokun to the injection point on the main OML 40 export pipeline has been enhanced with the mooring facilities rehabilitation and crude injection system upgrade. This allowed the successful streamlining of the Gbetiokun barging operations with the use of a self-propelled, 28 kbbl capacity vessel to evacuate liquids and has driven barging costs down from $14/bbl to $5/bbl. Facility projects progressed during the year included Gbetiokun-Adagbasa pipeline, Opuama flow station upgrade, BRVS and Gbetiokun EPF upgrades.

The Opuama focus was on deferment management, reservoir management ranging from incorporation of recently drilled well results into subsurface models, production monitoring, reduction of Mean Time-to-Repair, well optimisation and the identification of further opportunities to increase overall recovery.

Preparatory activities for drilling of the high-impact, near-field Sibiri (formerly Amobe) exploration prospect continued during the year with the evaluation of possible acceleration of first oil in the event of exploration success. Sibiri carries a risked best estimate gross prospective oil resource of 78 MMbbls.

Following the tragic BRVS accident in July, operations at Gbetiokun were suspended for several weeks but exports were able to recommence at the end of August. The three investigation teams deployed identified failure of the Permit to Work system as the root cause of the incident and recommended improvement actions. Sixteen of the recommendations, including all high-urgency items, have been closed out and the final two items will be concluded shortly.

Operations were further impacted by the incident on the MT Harcourt, a 180,000 bbls storage vessel used at Gbetiokun that occurred in November. A JV led investigation team identified poor contractor practices as the root cause of the incident which led to a rupture of the vessel's ballast tank hull. MT Harcourt is a self-contained vessel operated by Union Maritime leased under the Project Management Team arrangement between NPDC and Elcrest for the development of OML 40 Gbetiokun field. Three of the six actions recommended have been closed out, including a marine audit of all OML 40 vessels and spill clean-up completed.

Elcrest's management has prioritised building a robust HSE culture across the organisation and aims to finalise implementation of the enhanced standards across its locations.


Seplat's Eland subsidiary, through Wester Ord, owns a 40% working interest in the Ubima marginal field, with All Grace Energy Limited (AGEL) owning 60%. Wester Ord is the Technical and Financial partner to AGEL in the Ubima development.

The Extended Well Test for Ubima continued through the year with a production of c.1,200 bopd. The Field Development Plan for Ubima has been finalised.

Development of Eland

The acquisition of the entire issued share capital of Eland Oil & Gas PLC completed in the United Kingdom at the end of 2019 and was Seplat's first corporate acquisition. Seplat acquired the jointly operated OML 40 through its indigenous joint-venture subsidiary Elcrest, the share of Ubima, and the Aberdeen-based technical and service support of the Eland organisation.

Between them, OML40 and Ubima produced 26.3% of the Group's liquids in 2020.

Eland provides Seplat with increased production and reserves and further exposure to exploration potential, as well as furthering Seplat's access to international technical expertise and services in Aberdeen to augment our staff in Nigeria.

From December 2019, we have been focused on identifying ways in which the Seplat and Elcrest organisations could work effectively together, and ways in which the joint venture company Elcrest could leverage the Seplat corporate organisation to enhance its capabilities and improve operations at OML40.

From the start of 2020, despite the challenging environment of the COVID-19 pandemic and suppressed oil prices, Aberdeen-based staff continued to support OML 40 operations and, as the year progressed the inherent value of the Aberdeen office emerged and in December 2020 it was reorganised to become a Centre of Excellence for the Seplat group. It will allow Seplat greater access to the global energy hub of Aberdeen for traditional oil and gas expertise, together with expertise in power, renewables and carbon capture. This will include access to vendors, technology development and industry networks, and importantly to build university links between Nigeria and Scottish universities and enable knowledge transfer to Nigeria through training of Seplat staff, government partners and communities.

The Seplat Aberdeen office will also host teams for exploration, technical support for business development and new energy, subsurface, engineering and finance. All of these teams report into the Seplat corporate organisation.

Within Nigeria, Seplat has supported Elcrest in areas such as corporate social responsibility (CSR), drawing upon the experience and expertise of Seplat to develop improved policies and procedures, community engagement structures and sustainability strategy.

Diversifying export routes

Our strategy is to reduce over-reliance on any operated asset or associated third-party export route by diversifying our production base and exploring or creating new export routes over which we have more control.

At OMLs 4, 38 and 41, we have retained access to two jetties at the Warri Refinery that will enable sustained exports of 30,000 bopd (gross) if required, should there be problems with the primary export route, the Trans Forcados Pipeline (TFP). However, it was not necessary for us to activate this alternative export route in 2020. Security initiatives undertaken by the Nigerian government, as well as our own continuity strategies, minimised downtime experienced because of the TFP.

The Amukpe-Escravos Pipeline (AEP) is set to provide a third and more secure underground evacuation option for liquids production from OMLs 4, 38 and 41. Once completed, we believe it will significantly improve the assets' production uptime (83% in 2020) and reduce losses from crude theft and reconciliation (9.4% in 2020).

The minor completion works on the 160,000 bopd pipeline are not within Seplat's control and have been slower than anticipated due to a combination of challenges associated with access to the Escravos terminal owing to COVID-19 and issues relating to ownership of the pipeline. Our partner NPDC now owns a direct stake in the pipeline and we understand they are working with the other pipeline owner and their banks to enable the completion of the project. We have consequently adjusted our plan and budgets to expect commencement of export of the initial permitted volume of 40,000 bopd through the Escravos terminal in the second half of 2021.

OML 40's production is evacuated through the Trans Escravos Pipeline (TEP), which has lower reconciliation losses and better uptime than the Trans Forcados Pipeline (TFP). There is an option being explored to connect the AEP line to the TEP through a short 8km spur providing an additional route for OML 4, 38 and 41 production. In addition, an option exists to combine the production and secure an offshore Floating Production Storage and Offloading (FPSO) facility and use it as a crude oil export terminal. This should significantly improve sales volumes by reducing downtime and reconciliation losses currently experienced by using third-party infrastructure, which are budgeted to average an aggregate of 30% per annum. A dedicated team is developing these export options and we will communicate the details in due course.

At OML 53, Seplat plans to construct a crude export line to convey production from Ohaji South field into Ebocha-Brass Trunkline via Ebocha manifold. This will provide an alternate evacuation route to Brass Terminal and thereby help alleviate production deferment from the field.

Gas business performance 

Alongside the oil business, the Company has also prioritised the development and commercialisation of the substantial gas reserves identified in its assets. Today, Seplat is a leading supplier of processed natural gas to the Nigerian domestic market.

Seplat's working-interest production for the year was 101 MMscfd at an average selling price of $2.87/Mscf
(2019: 131 MMscfd, $2.84/Mscf). Gas contributed $112.5 million of Group revenues, or 21.2%.
 This was lower than planned as a result of the indirect impact of COVID-19 on Nigerian businesses for most of the year, which affected bulk offtake from Oben. Delays in production from Oben-50 gas well further exacerbated the effect, following a restoration in demand in the later part of the year.

An electricity tariff increase, that saw prices to consumers rise by an average of 75%, became effective in November 2020. This cost-reflective tariff has improved the collection system recently implemented by the Government and is expected to improve cashflow to the power sector and therefore future invoice settlements.

Oben Gas Plant

We successfully completed a 15-day turnaround maintenance (TAM) for the Oben Gas Plant in March and lessons learned were successfully embedded. Gas production was affected during the maintenance period and this impact was amplified by third-party infrastructure downtime of 17% due to associated condensate handling challenges. 

The Oben-48 gas well, drilled in late 2019, came onstream in the first quarter of 2020, while Oben-49 came onstream in the fourth quarter of 2020. Both wells are currently producing a gross 42 MMscfd combined. Oben-50 was drilled in the fourth quarter, coming onstream in Q1 2021.

Sapele Gas Plant

Decommissioning of the surface infrastructure of the existing gas plant reached completion in the fourth quarter of the year. Site preparation and civil construction works for the new plant have commenced alongside piling activities.

For the new plant, we have taken delivery of the Associated Gas Compressors and seven gas generators have been completed ex-works. Procurement of the remainder packages and the balance of the plant equipment is at various stages of contracting, detailed engineering design and fabrication. The project is expected to be completed in the second half of 2022, with Sapele's processing capacity increasing from 60 MMscfd to 75MMscfd. The upgraded facility will produce gas that meets export specifications, and the LPG processing unit module will enhance the economics of the plant, as well as ensuring that any gas flaring is eliminated.

ANOH Gas Processing Plant update

The ANOH Gas Processing Plant development at OML 53 (and adjacent OML 21 with which the upstream project is unitised) will drive the next phase of growth for Seplat's expanding gas business. The project will comprise a Phase One 300 MMscfd midstream gas processing plant.

The ANOH plant, is being built by AGPC, which is an IJV owned equally between Seplat and the Nigerian Gas Company ("NGC"), a wholly owned subsidiary of Nigerian National Petroleum Corporation ("NNPC"). In February 2021, The IJV, AGPC, successfully raised $260 million in debt to fund completion of the ANOH project. The project is now fully funded following completion of equity investments of $210 million by each partner ($420 million combined).

ANOH is one of Nigeria's most strategic gas projects. It will help Nigeria to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation.

The upstream development, including the drilling of six production wells, will be delivered by the upstream unit operator SPDC, with four wells expected to be completed in 2021. We have made excellent progress on the project despite the COVID-19 challenges and we expect the major gas processing units to arrive in Nigeria in Q3 2021, to commence installation before the end of the year, with mechanical completion and pre-commissioning in Q1 2022 and first gas flowing to customers by the end of H1 2022.  The initial total project cost was budgeted at $700 million. Following a cost optimisation programme, the AGPC construction cost is now expected to be no more than $650 million, inclusive of financing costs and taxes, significantly lower than the original projected cost at FID.

ESG developments

In our continuing drive to improve our environmental performance and prepare for both the opportunities and challenges posed by climate change, we are working with external consultants Environment Resource Management and Critical Resource to conduct scenario analysis of our assets under the IEA's Stated Policies Scenario (STEPS) and its Sustainable Development Scenario to simulate a well-below 2°C outcome against which we can test the resilience of our portfolio.

In addition, we are developing a carbon footprint calculator so that we can more accurately measure our emissions. We will publish the results of these initiatives in due course and use the insights they deliver to drive our corporate strategy and sustainability initiatives going forward.  

Caring for our communities

In March 2020, as the pandemic began to take hold, Seplat joined the NNPC, and 32 oil and gas companies to contribute $30 million to help the Federal Government fight COVID-19 in Nigeria. The sector donation supported healthcare delivery facilities, including ventilators, personal protective equipment, test kits and ambulances for different states in the country.

In addition, Seplat joined an effort to fight the pandemic in Edo, Imo and Delta states. For Edo State, the donation was made in the form of medical supplies and equipment including motorised sprayers, backpack sprayers, eye goggles, hand sanitisers, nose masks, temperature guns, chemical gloves and personal protective equipment. Similar donations and donations of additional equipment were made in Imo State. In Delta State, Seplat, First Hydrocarbon Nigeria (FHN) and ND Western also donated critical medical equipment and materials to the state in the quest to check the spread of COVID-19, thus enhancing government's readiness to manage possible incidences of COVID-19.  

In June, Seplat and its joint venture partners the NNPC and its subsidiary the Nigerian Petroleum Development Company (NPDC) Limited, made additional donations to state governments to fight against the pandemic. For Edo State, the items donated were 25 hospital beds and a transport ventilator, the same donations being made to Delta State. For Imo State, the items donated were 25 hospital beds, sanitary buckets, alcohol-based hand sanitisers, infrared thermometers, protective equipment and a transport ventilator, amongst other donations.

Also, in June 2020, Seplat and its joint venture partner NNPC commenced constructing a permanent 200 bed Emergency and Infectious Diseases Hospital at Imo State University Teaching Hospital Orlu, Imo State.

The facility is one of the 12 hospitals that the NNPC intends to construct across the country's six geo-political zones. The NNPC in collaboration with its partners embarked on this initiative to strengthen the country's national healthcare delivery facilities in combating the ravaging COVID-19 pandemic sustainably.

In November 2020 Seplat launched another initiative to improve the standard of education in our host states. The Seplat Teachers Empowerment Programme (STEP) is a well-rounded programme that provides six months' in-person and online training designed to help teachers enhance their knowledge and skills, enabling them to be more effective and motivate their students to learn.

The maiden STEP made its debut in Benin City, Edo State, in November with a five-day residential workshop that kicked off a three-month programme online. Participants were trained in specially designed teaching applications for Science, Technology, Engineering, Arts and Mathematics.

A hundred teachers and 43 Chief Inspectors of Education, drawn from Edo and Delta States, benefited from this initial project. They were selected from an initial application of nearly 400 teachers from schools in Edo and Delta States.  Of the 100 teachers to be trained, 75 percent are from public schools, while 25 percent are from private schools.

Share buying programme for Seplat Long-Term Incentive Plan

We have allocated $5.0 million for the purchase of Trust Shares to fund and administer our Long-Term Incentive Plan (LTIP). The purchase of the Trust Shares will be executed on behalf of appointed UK Trustees, Zedra Trust Company (Guernsey) Limited. The Trust Shares, when purchased, will be held by the Trustees under the Trust for the benefit of its employee beneficiaries covered under the Trust. The programme will run from 1 March 2021.     

Elimination of Related-Party Transactions

In our continuous efforts to promote world-class governance, the Board has decided to adopt Nigeria's stricter definition of 'Related Parties' and eliminate all related-party transactions (RPT) as defined by the end of 2021. Such a move will exceed the UK's already rigorous rules on RPTs, which permit RPTs but govern the approval and disclosure of any transaction with a related party.


Financial review

Revenue, production and commodity prices

The Brent oil price averaged $43.21/bbl over 2020 (2019: $64.04/bbl). Brent remained volatile throughout the year, following the twin shocks of the Saudi Arabia - Russia price war and the COVID-19 pandemic, trading between a high of $68.91/bbl in January and a low of $19.33/bbl in April, before exiting the year at $51.80/bbl.

Total revenue in 2020 was $530.5 million, down 24.0% from the $697.7 million achieved in 2019. Crude oil revenue was $417.9 million (2019: $495.1 million) a 15.6% reduction compared to 2019, largely reflecting lower realised oil prices of $39.95/bbl for the period (2019: $64.4/bbl) offset by added production primarily from the Eland assets. Following the completion of its acquisition, Eland's revenues and costs are included in the full-year 2020 accounts but not reflected in 2019. A $50.0 million oil underlift was recorded under other income in the period, compared to an overlift of $6.8 million in 2019.

Average working-interest liquids production was 33,714 bopd, up 40.9% from 23,935 bopd in 2019, whilst the total volume of crude lifted in the year was 10.5 MMbbls compared to 7.7 MMbbls in 2019. The higher volume was due to a maiden contribution from OML40 and Ubima, and higher production from OML 53, though constrained by OPEC+ cuts of 410,000 bbls (on a gross basis) allotted the Group. The Company experienced TFP reconciliation losses of 9.4% for the period, but we expect these to fall when the Amukpe-Escravos underground pipeline comes onstream.

Gas sales revenue decreased by 17.1% to $112.5 million (2019: $135.8 million), due to lower gas sales volumes of 37.1 Bscf compared to 47.8 Bscf in 2019. The lower gas sales volumes reflect lower-than-expected gas production owing to constrained demand due to the impact of the pandemic and delays in completing the Oben-50 gas well, following a restoration in demand.  There were no gas-processing revenues in the period, compared with the one-off gas-processing revenue of $66.9 million in 2019, which was the Oben gas plant tolling payment by NPDC.

The average realised gas price was slightly higher, at $2.87/Mscf (2019: $2.84/Mscf). Gas sales contributed 21.2% of total Group revenue in 2020 (2019: 19.5%).

Cost-saving initiatives

During the year, a comprehensive cost-saving programme was developed to adapt to current market conditions. Through the implementation of these actions, the Group aims to reduce costs by at least 30% across the business by the end of 2021. Across 2020, we achieved $17 million in cost savings through these various initiatives. Towards opex and G&A reduction, IT, administrative and travel costs have been reduced to the essentials and all third-party and service contracts were renegotiated downwards. This is reflected in General and Administrative expenses holding relatively stable at $76.0 million despite a higher depreciation charge and the consolidation of Eland (2019: $70.6 million).

The capital investment programme was revised to conserve cash and manage liquidity. In terms of efficiency, we significantly improved our technologies to support secure and reliable virtual collaboration, which increased employee productivity in a work from home environment. Additionally, Wells, Reservoir and Facilities Management recommendations and learnings from the Oben Gas Plant maintenance were implemented. The Group intends to continue to simplify activities and increase their efficiency.

Gross profit

Gross profit decreased to $124.6 million (2019: $395.7 million) due to lower oil prices and higher non-production costs primarily consisting of royalties and DD&A, which were $228.8 million compared to $187.7 million in the prior year. The DD&A charge for oil and gas assets increased to $127.5 million during 2020 (2019: $91.1 million), reflecting higher depletion of reserves because of increased production compared to the prior year.

Direct operating costs, which include crude-handling fees, rig-related costs and operations and maintenance costs amounted to $151.8 million in 2020, 44.2% higher than $105.3 million in 2019. Production evacuation from the Gbetiokun and Ubima fields resulted in barging and trucking costs of $15.9 million. These increased costs reflect the additional production volumes from the Eland assets and resultant increase in royalties and crude handling fees. On a cost-per-barrel basis, production opex was higher at $8.90/boe (2019: $6.20/boe) because of the effect of OPEC+ restrictions that curtailed production volumes and the trucking and barging costs at Gbetiokun. However, benefits of the successful streamlining of the Gbetiokun operations have driven barging costs down from $14/bbl to $5/bbl.

Non-cash IAS 36 impairments

As previously reported, under IAS 36 the Company identified the need to revalue its assets due to the significant economic uncertainty of the COVID-19 crisis. Following a reassessment of the business models and assumptions to establish their reasonableness and practicality, particularly in the current and expected oil price environment, we decided to book a non-cash provision of $114.4 million across non-financial assets in the period.

Operating results

After adjusting for non-cash impairments and fair value losses, the operating profit was $121.4 million. Including all adjustments, the operating loss for the year was $31.7 million (operating profit 2019: $311.9 million). The loss reflects lower oil prices realised and an impairment provision of $144.3 million booked in the period, which includes a non-financial asset charge of $114.4 million (IAS 36 as detailed above) and financial asset charges of $29.9 million (IFRS 9). The financial asset charge includes charges against a deposit made for a potential investment that the Company will no longer pursue. Other income of $83.9 million includes an adjustment for a $50.0 million underlift position (shortfalls of crude lifted below Seplat's share of production, which is priced at the date of lifting and recognised as other income) and the $2.2 million tariff income generated from the use of the Company's pipeline. Hedging income of $26.4 million was received in the period; $8.3 million hedging costs are recognised as fair value charges. The stated $7.2 million provision no longer required relates to a contingent liability initially recognised on acquisition of Eland.

An EBITDA of $265.8 million adjusts for impairment and other non-cash items, equating to a margin of 50.1% for the year.


The Group's tax charge for 2020 was $5.1 million, compared to $29.1 million for 2019.

The tax charge is made up of a deferred tax credit of $8.5 million and a current tax charge of $13.6 million. The deferred tax credit is mainly driven by the unutilised capital allowances and unutilised tax losses for the period. The estimated effective tax rate used for the year ended 31 December 2020 was 6% (2019: 10%). The reduction in the effective tax rate was principally due to the recognition of tax losses available for utilisation against future profit.

In May 2015, in line with sections of the Companies Income Tax Act, which provides incentives to companies that deliver gas utilisation projects, Seplat was granted a three-year tax holiday with a possible extension of two years. In 2018, upon review of the performance of the business, the Group provided a notification to the Federal Inland Revenue Service (FIRS) for the extension of claim for the additional two-year tax holiday. Effective May 2020, the five-year tax holiday benefit for the gas business ended and the financial statements have been prepared on this basis.

Net result

Loss before tax was $80.2 million, compared to a profit before tax of $292.9 million in 2019. The higher net finance charge of $50.2 million in 2020 includes interest on the $350 million RCF in December and the consolidation of Eland finance.  (2019: $20.1 million). Loss for the year was $85.3 million (2019: $277.0 million profit).

The resultant basic loss per share was $0.13 in 2020, compared to an EPS of $0.49 in 2019. The reduction was mainly due to lower oil prices and impairment charges described above.


In line with the dividend policy, the Board has recommended a final dividend of $0.05 per share. This will bring the total dividend to $0.10 per share (2019: $0.10 per share).

Subject to approval of shareholders, the dividend will be paid shortly after the Annual General Meeting, which will be held in Lagos, Nigeria, on 20 May 2020.

Repayment of Elcrest development loan to Seplat

In acquiring Eland, Seplat has acquired the right to be repaid a shareholder loan. The loan was advanced to Elcrest by Westport, Eland's 100%-owned financing subsidiary for the development of OML 40. Following its acquisition of Eland, Seplat is entitled to 100% of Elcrest's production and net cash flows until the loan is repaid in full. At 31 December 2020, the outstanding balance of the shareholder loan was approximately $417 million. 

After repayment of the loan, Seplat's interest in OML 40's production and net cash flows will revert to 20.25%, representing its 45% interest in Elcrest, which in turn owns 45% of OML40.

Cash flows from operating activities

Net cash flows from operating activities, after movements in working capital, were $308.7 million (2019: $337.8 million). An income tax payment of $10.4 million was made in the period (2019: $3.5 million).

The Group received $188.1 million from the major JV towards the settlement of outstanding dollar-denominated cash calls and $154.2 million (Naira equivalent) to offset Naira cash calls totaling $342.3 million received in 2020. This compares favorably to $179m received in 2019.

The major JV receivable balance now stands at $107.0 million, down from $222.3 million at the end of 2019.  

Cash flows from investing activities

The Group implemented a modest capex program for the majority of 2020, in response to low oil prices caused by a price war between OPEC+ members in the first half of the year, exacerbated by the impact of COVID-19 on global oil demand. Our planned spend of $120.0 million for 2020 was designed to sustain production from our oil wells and increase gas production in order to meet our gas contractual obligations. 

Mindful that we cannot fully control the pace of project execution in this environment, the Group established various initiatives to maximise work program flexibility while preserving cash. Most of the Group's capital expenditures are discretionary with the flexibility to align investment with cash flow in response to prevailing conditions and future growth opportunities. As oil prices improved, an additional capex of $30 million was approved in the fourth quarter of 2020, towards drilling the ANOH upstream wells at OML 53 and project costs related to delivery of the Sapele Gas plant.

As a result, capital expenditures were $150.1 million in 2020 and included costs of around $83.5 million for drilling and completion of nine wells including three gas wells (completion of Oben 48; Oben 49 and Oben 50) and six development oil wells (Sapele-35, Ovhor-6ST, Ovhor-20, Ohaji South-5, Ohaji South-6 and Gbetiokun-5) that were completed earlier in the year.  Associated facilities and engineering costs amounted to $61.3 million.

The payment of $60.0 million reflects the final equity contribution towards the ANOH Gas Processing Plant project.

The Group received total proceeds of $4.8 million under the revised OML55 commercial arrangement with Belema Oil for the monetisation of 67.5 kbbls. Recovery during the year was impacted by OPEC+ production cuts and low oil prices.

After adjusting for interest receipts of $1.7 million, the net cash outflow from investing activities was $203.7 million compared to a net cash outflow in 2019 of $732.9 million, which included the AGPC deconsolidation, ANOH equity contribution and acquisition costs in 2019.

Cash flows from financing activities

Net cash outflows from financing activities were $217.4 million (2019 Net cash inflows: $145.2 million). This reflects a further $10.0 million drawn from the Westport RBL facility, interest of $64.8 million paid on loans and dividend payments to shareholders of $58.3 million. In August 2020, the Company repaid $100.0 million of the revolver.


The balance sheet continues to remain healthy with a solid liquidity position.

Net debt reconciliation at 31 December 2020

$ million



Senior Notes *



June 2023

Revolving Credit Facility *



June 2022 / December 2023

Westport RBL *



November 2023

Total borrowings




Cash and cash equivalents




Net debt




*including amortised interest

Seplat ended the year with gross debt of $698.4 million with most maturities in 2023, and cash at bank of $258.7 million, which includes restricted cash of $33.6 million, leaving net debt at $439.7 million.

Refinancing all or a portion of our debt during 2021 remains a priority. The Group continuously reviews its funding and maturity profile and monitors the fixed-income market to ensure that it is well positioned for any refinancing opportunities for the current debt facilities, including potentially the $350 million 9.25% 144A/Reg S bond maturing in 2023.

Revolving Credit Facility (RCF)

In December 2019, the Group successfully restated and amended the existing RCF with a new four-year $350.0 million RCF at LIBOR + 6% (fully drawn in December 2019). Proceeds from the upsized RCF, along with existing cash resources, were used to fund the acquisition of Eland Oil & Gas PLC.  In August 2020, the Company voluntarily repaid $100.0 million of the RCF, with $250.0 million currently drawn. The $100.0 million remains available for drawing if required.

Reserve-Based Loan (RBL)

Eland's existing RBL was consolidated into the Group's balance sheet in 2020. The RBL was entered into in November 2018, via the Group's subsidiary Westport, and is a five-year loan agreement with interest payable semi-annually. The RBL is secured against the Group's producing assets in OML 40 via the Group's shares in Elcrest, and by way of a debenture that creates a charge over certain assets of the Group, including its bank accounts. The available facility is capped at the lower of the available commitments and the borrowing base. The outstanding loan amount is $100 million.

We plan to extend maturities in the existing RBL and raise additional finance of up to $50 million to fund capex at Elcrest assets.


Seplat's hedging policy aims to guarantee appropriate levels of cash flow assurance in times of oil price weakness and volatility. During 2020, the Group had in place dated Brent put options covering a volume of 6.5 MMbbls as follows: (i) for Q1, Q2 and Q3, 1.5MMbbls for each quarter at a strike price of $45/bbl; and (ii) for Q4, 1.5MMbbls at a strike price of $30/bbl and 0.5MMbbls at a strike price of $35/bbl.

This hedging programme has been continued in 2021 with up-front-premium put options as follows: (i) for Q1, 1.0MMbbls at a strike price of $30/bbl and 1.0MMbbls at a strike price of $35/bbl; (ii) for Q2, 2.0MMbbls at a strike price of $35/bbl; and (iii) for Q3, 1.0MMbbls at a strike price of $35/bbl and 1.0MMbbls at a strike price of $40/bbl. The Board and management team continue to closely monitor prevailing oil market dynamics and will consider further measures to provide appropriate levels of cash flow assurance in times of oil price weakness and volatility.

Credit ratings

Seplat maintains corporate credit ratings with Moody's Investor Services (Moody's), Standard & Poor's (S&P) Rating Services and Fitch. The current corporate ratings are as follows: (i) Moody's B2 (negative); (ii) S&P B (although the bonds are rated B- due to priority indebtedness) and (ii) Fitch B- (positive).





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