Lagos — Seplat Petroleum Development Company Plc is now a full-fledged holding company with all its assets managed by its wholly-owned subsidiaries.
Disclosed in a notification that was sent to the Nigerian Stock Exchange, NSE, the company announced the completion of the transfer of the business activities, and assets of OMLs 4, 38 and 41 from the holding company to its wholly-owned subsidiary, Seplat West Limited, following regulatory and partner approvals with effect from January 1, 2020.
According to the notification signed by its Company Secretary/Chief Governance Compliance Officer, Mrs. Edith Onwuchekwa, the Intra-Group transfer had been planned for some time, so it will not result in any change to the current business strategy for any of the assets, nor will it affect the way that the Seplat Group commercially operates.
This means the operatorship of these assets still remains with Seplat under the Joint Operating Agreement as the transfer to an affiliate of Seplat under the terms of the JOA is permitted.
The transfer of OMLs 4, 38 and 41 from Seplat Plc to Seplat West results in the creation of 7 wholly-owned subsidiaries namely: Newton Energy Limited, Seplat Petroleum Development Company UK Limited, Seplat East Onshore Limited, Seplat East Swamp Company Limited, Seplat Gas Company Limited, Eland Oil and Gas Limited and Seplat West Limited, with no operating oil and gas assets directly held in the holding company.
The company explains this new structure is consistent with its efforts to simplify its structure and designed towards segregating the businesses of the Group in a more efficient manner, thereby reducing risk, cost, and complexity. It is also expected to result in simplified management and reporting framework for the Group.
The outcome of the transfer will not, in any way, result in loss of tax revenue to the Government or extinguishment of liabilities. Similarly, it will not diminish shareholder value in (and returns from) Seplat as a listed company, according to the memo.
The statement also said the transfer will also not impact the ratings of the Group.