{"id":39858,"date":"2020-04-29T18:27:11","date_gmt":"2020-04-29T17:27:11","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=39858"},"modified":"2020-04-29T18:27:11","modified_gmt":"2020-04-29T17:27:11","slug":"buhari-njc-extend-tanko-muhammads-tenure-as-acting-cjn-2","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/buhari-njc-extend-tanko-muhammads-tenure-as-acting-cjn-2\/","title":{"rendered":"Seplat\u2019s Significant Cash Resources, Among Others, Provide Strong Resilience To Oil Volatility \u2013 CEO"},"content":{"rendered":"

Seplat Petroleum Development Company Plc, a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), has assured that its increasing revenue from gas, low oil price hedging and good cash standing, provide strong resilience to the current oil price volatility.<\/p>\n

This position is contained in the company\u2019s unaudited results for the three months ended 31 March 2020 released to the NSE and LSE on Wednesday.<\/p>\n

Mr. Austin Avuru, Chief Executive Officer, SEPLAT, was quoted in the release as saying that: \u201cThe business is hedged against low oil prices and a significant proportion of our revenues now come from gas, which offers further protection from oil price volatility. The Company has low production costs and can remain profitable even at lower oil prices.<\/p>\n

\u201cWe have significant cash resources available and will continue to manage our finances prudently in 2020, expecting now to invest US$120 million of capital expenditure across the year, including two new gas wells and associated infrastructure.\u201d<\/p>\n

Austin Avuru, Chief Executive Officer, added:<\/b><\/p>\n

\u201cAgainst the twin crises of significantly reduced oil demand and the price war, Seplat continues to demonstrate its resilience because of its ongoing philosophy of prudent financial management, the careful mitigation of risk and a keen focus on managing factors of the business that are within our control.<\/p>\n

We have the benefit of long-term contracted gas revenues that are insulated from oil market volatility. We are achieving substantial cost reductions from our suppliers and managing our own costs even more carefully in this unprecedented and challenging period. We are in constant dialogue with partners on monies owed and are pleased to report that our cash flow remains robust and we have significant cash in reserve.\u00a0 This, coupled with the majority of our debt repayment obligations extending beyond 2021, gives us confidence that we can continue to operate comfortably within the covenants on all lines of debt.<\/p>\n

To assist with the COVID-19 pandemic, we have provided medical and food donations as part of our ongoing commitment to our local and state communities and we will continue to do whatever we can to support those upon whom we depend for our business.<\/p>\n

The challenges before us remain significant, but through our extensive scenario planning, we are confident that the resilience and discipline of our business will help us through this unprecedented time and strengthen our position as Nigeria\u2019s leading independent oil and gas producer.\u201d<\/p>\n

Highlights<\/i><\/b><\/p>\n

Operational<\/b><\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Low unit cost of production at US$7.7\/boe, with cost cutting initiatives now in force<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Working interest production within guidance at 48,491 boepd<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Liquids production of 33,368 bopd<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Gas production of 88 MMscfd<\/p>\n

COVID-19 impact and mitigating actions<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Business continuity plan working successfully<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Oil field operations now working 28-day rotations (previously 14 days), with regular health checks<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Substantial support for local communities, donations of medical and protective equipment and food<\/p>

\r\n
Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

Financial<\/b><\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cash at bank US$336 million, net debt of US$458 million<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Revenue of US$130 million<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Non-current asset impairment provision of US$146 million in line with IAS 36 COVID-19 impact assessment<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Impairment provision reduces non-current assets from US$2.34 billion to US$2.20 billion<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Total capital expenditure of US$46 million<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cash flow from operations US$65 million<\/p>\n

Outlook<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Expected production of 47-57 kboepd (inc. Eland 6-10kbopd) for full year, subject to market conditions<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1.5MMbbls\/quarter hedged at US$45\/bbl from Q1 to Q3 2020<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Significant cash balance available<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Low cost of production enables profitability at levels below current oil price<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 2020 capex revised upwards to US$120 million from US$100 million, with two additional gas wells and related infrastructure<\/p>\n

Outlook for 2020<\/b><\/p>\n

The emergence of the COVID-19 pandemic in the first quarter of 2020, as well as pressure on oil prices in March, have placed a premium on solid financial management that focuses upon low-cost production, robust cash management, a strong balance sheet and focused investment in high-return projects for sustainable future growth.<\/p>\n

At present we are targeting 2020 production of between 47-57 kboepd, including Eland production of 6-10 kbopd, subject to continuous evacuation being possible.<\/p>\n

Seplat has been tested in previous adverse conditions and we are confident that the stronger and more diverse business we operate today will be even more resilient against these unprecedented market events.<\/p>\n","protected":false},"excerpt":{"rendered":"

Seplat Petroleum Development Company Plc, a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), has assured that its increasing revenue from gas, low oil price hedging and good cash standing, provide strong resilience to the current oil price volatility.<\/p>\n","protected":false},"author":6,"featured_media":18502,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[3103,5840],"coauthors":[2391],"class_list":["post-39858","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-news","tag-seplat-oil","tag-seplat-petroleum-development-company"],"yoast_head":"\nSeplat\u2019s Significant Cash Resources, Among Others, Provide Strong Resilience To Oil Volatility \u2013 CEO - 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