10 June 2016, Lagos — With constant emphases laid on non-availability of gas to power generation turbines that will generate electricity by the DISCOs, Seplat has stepped out to support the nation to meet its target in power generation.
According to the Chief Operating Officer, Seplat Petroleum Development Company Plc, Mr. Stuart Connal, “In 2015, there was a notable evidence towards our contribution to power generation, through the commissioning of our new plant.
This facility will provide an additional 150 million standard cubic feet per day of gas supply, translating into around a 600 Mega Watt increase in power generation. The company stressed that “We are focused on the Phase II expansion of the Oben gas processing facility.
This will entail the installation of additional three of 75 MMscfd processing modules, adding a further 225 MMscfd gross capacity and taking our overall capacity to a minimum of 525 MMscfd.
“The additional processing modules, together with booster compression stations, have been ordered and delivery is anticipated towards the latter parts of 2016 for installation and commissioning by year-end or in early 2017.”
Meanwhile, the company has reiterated its commitment to deliver an improved operational performance in 2016 by protecting its business and managing value through effective cost reduction. This was even as the company has declared N4.4 billion final dividends for the year ended December 31, 2015.
The Managing Director, Mr. Austin Avuru, who made this known at a briefing, stated that the company is set to deleverage and strengthen its balance sheet during the year, saying it would position the company to take advantage of opportunities that would follow the current downturn in the oil and gas industry.
He observed that though the company’s 2016 full year production expectation has been impacted by the current shut-in of the Forcados terminal, the company is better positioned to withstand such interruptions than in prior years.
“Our gas business takes on additional importance by providing a continuous revenue stream that is de-linked from the oil price. Our enlarged portfolio offers us the scope for greater diversification,” he assured. Avuru noted that Seplat has set full year production guidance at 41,000 to 48,000 boepd and expects its capital expenditures to be around US$130 million throughout 2016.
Speaking on the company’s operation in 2015, Avuru said: “In 2015, we delivered on what was in our control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come.
“We acted quickly and decisively in response to the weak oil price environment, adjusting our work programme and cost structures. Against a bleak industry backdrop, we remained profitable with a strong balance sheet underpinning us.”
He revealed that the company posted N112.97 billion revenue in 2015, which was down 26 per cent year-on- year from N124.38 billion in 2014 and gross profit of N49.27 billion as against N73.73 billion in the previous year.
Profit before tax and profit after tax declined to N17.25 billion and N12.99 billion respectively from N40.48 billion in 2014. The company still enjoys a tax holiday.
According to him, cash at bank and net debt at year end stood at N62.89 billion and N64.83 billion, respectively.
*NKIRUKA NNOROM & PRINCE OKAFOR – Vanguard