Seplat Suffers N49.8bn Loss Amid Oil Price Crash

One of the nation’s indigenous independent oil companies, Seplat Petroleum Development Company Plc, posted a loss of $145.3m (N49.8bn) in the first half of this year, compared to a profit of $120.4m (N37bn) in the same period of 2019.

Its total revenue for the period fell by 34.2 per cent to $233.5m from the $355.1m reported in 2019, its 2020 half-year financial results released on Wednesday showed.

The company said its oil operations produced an average 34,117 barrels of oil per day on a working-interest basis in H1 2020.

It said, “This 48.5 per cent increase reflects a maiden contribution of 10,861 bopd (31.8 per cent of group volumes) from the recently acquired OML 40 and Ubima assets, as well as higher production from OML 53 compared to H1 2019.

“The average price realised was $34.94 per barrel (H1 2019: $65.16 per barrel). The company has hedged 1.5 million barrels per quarter at $45 per barrel for the first three quarters of 2020 and 1.5 million barrels at $30 per barrel for the final quarter of the year, using put options.”

Seplat said it was renegotiating supplier contracts in line with directives from its government partners to achieve cost savings of at least 30 per cent.

It said it had successfully reduced barging costs from $14 per barrel to $9 per barrel at OML 40.

The Chief Executive Officer, Mr Austin Avuru, said, “Seplat has delivered a robust performance despite the unprecedented crises we have experienced since March.

“Our continued resilience is possible as a result of our financial strength, our careful management of risk and our prudent approach to capital allocation.

“Unlike many in our industry, we were able to protect our 2019 dividend and increase our capital investment to ensure continued growth. Our oil hedging strategy and gas revenues continue to protect the business from price volatility.”