Slight positive reaction from the market likely to Seplat Q4 2015 Statement


Monday, January 25, 2016 11:54 AM / FBNQuest Research

This morning Seplat Petroleum Development Company (Seplat) published an unaudited trading statement for full year 2015.

·         Total working interest production was up 41% y/y to 43,372 barrels of oil equiv per day (boepd), ahead of guidance of 32-36boepd but broadly in line with our 44,000boepd forecast for the year. We note that unplanned downtime on the TransForcados export route weighed on production in H1 2015. Excluding this event, production for 2015 was approximately 47,537boepd.

·         According to management, the expansion of Seplat’s Oben gas facility is supportive. While gas production was up +119% y/y, oil production was up 20% y/y. We had forecast a rise in oil and gas production of 16% y/y and 143% y/y respectively.

·         The firm projects revenues of US$500-600m; our forecast is US$565.9m for full year 2015E.

·         Seplat’s average realised oil and gas prices were US$47/b and US$2.6/mmscf respectively  vs. our US$52/b and US$2.6mmscf est.

·         Capex came in at US$152m, slightly below guidance of US$168m.

·         In January 2016, average production has been around 55,000boepd.

Highlights from Q3 2015 results

In Q3, the -26% y/y decline in oil sales to US$146m was primarily driven by a 55% y/y decline in actualised oil prices to US$49.3/barrel.


Over the last four quarters, Forcados Blend price premium to Brent has more or less disappeared given weaker global oil demand.


Seplat realised a premium of US$1.2/b. Similar to Q1 and Q2 2015 numbers, although oil sales continued to be the primary driver for the topline trend, the gas business seems primed to be more influential in the short to medium term. Gas revenue now accounts for around 15% of total sales, up from 8% in Q1 2015.


Seplat has priotised the commercialisation and development of its gas reserves as it seeks to tap into growing domestic demand. According to management, Seplat’s current gas supply capacity is estimated at 25-30% of Nigeria’s current power generation.


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