Lagos — Seplat Petroleum Development Company Plc has announced a cash reserves increase to $343 million despite lower revenues, for the six months ended 30 June 2020.
The company’s full-year capex of US$120m (US$86m already invested) would also cover two gas wells and related infrastructure.
These were contained in results released to the Nigerian Stock Exchange, NSE, and the London Stock Exchange, LSE, on Wednesday
According to the results, revenue for the period stood at $234m amid lower oil prices and demand.
Commenting on the results, the Chief Executive Officer, Seplat, 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.”
Seplat’s oil hedging strategy and gas revenues, according to Avuru, have continued to protect the business from price volatility, with the company achieving substantial cost reductions from its suppliers while managing own costs even more carefully in this challenging period.
“Thanks to the excellent relationships we have with our government partners and supply chain, the Nigerian Petroleum Development Company (NPDC), receivables have fallen and we are managing our payments equitably. The cash position is also robust because our careful management of debt has ensured that the majority of obligations mature in 2022 and 2023. We are operating within our covenants on all our lines of debt,” Avuru, who is Seplat’s out-going CEO stated.
Speaking on Seplat’s efforts at ameliorating the impacts of Coronavirus, he said: “As part of our commitment to our host communities, we have provided medical and food assistance where needed and will continue to do whatever we can to support those upon whom we depend for our business.
“This is my final set of results as Chief Executive of the Company I helped to found ten years ago. I thank all my staff, past and present, for working to make Seplat a major force in Nigerian energy production. I hand a robust and successful company over to Roger Brown, the incoming CEO, in the confidence that he and everyone at Seplat will make its second decade even more successful than its first.”