Seplat Energy Share Discussion Threads

[dukedosh] 28/7/2015 21:28

This note from RBC today:

SEPLAT Petroleum (SEPL.L, 103p, Outperform, Speculative Risk, 190p Price Target)

SEPLAT this morning published H1/15 earnings broadly in line with our expectations, and with a cash flow beat. The operating update highlighted strong production growth and the potential for increased gas sales.

H1/15 Numbers: Production of 32,580boe/d (33,200boe/d forecast) generated revenues of $248m ($257m forecast), slightly higher than anticipated operating costs were partially offset by lower G&A costs and a currency gain, as a result operating profit of $71m fell only just short of our $80m forecast. A H1/15 finance charge of ~$30m ($34m forecast) resulted in net income for the period of $41.5m ($44m forecast). Cash flow from operation (before changes in working capital) of $92m beat our $73m forecast, and with capex of $68m coming in as forecast, SEPLAT ended the period with cash of $110m ($90m forecast) and debt of $853m ($973m forecast). These figures exclude the $368m of restricted cash received after the period end. Current net NNPC receivables totalled $504m, but NPDC and SEPLAT have agreed to offset NPDC’s share of gas revenues against sums owed from last year. In April management put in place puts covering a volume of 4.4mmbbls of oil to end 2015 with a strike price of $52/bbl.

Growing Production: H1/15 sales numbers reflect the impact of 52 full and 25 partial days of downtime on the third party operated Trans Forcados System. Deliveries during the first six months to the Warri refinery via the SEPLAT operated alternative export pipeline stood at a constrained 393,055bbls. Although the high level of downtime of the TFS impacted sales, daily production rates climbed to record levels for both oil and gas production. Reservoir and well performance remained at the high end of expectations and an increase in gas processing capacity from commissioning of the new 150MMcfd Oben gas plant allowed for increased levels of gas offtake, which in turn has led to higher than anticipated condensate yields. Consequently, gross daily production rates of up to 84,400b/d liquids and 284MMcfd gas have been achieved.

Gas sales agreements: During H1/15 the company signed a new gas sales agreement with NGC to supply an additional 100MMcfd at a price of $3.50/Mcf to the domestic market over and above its pre-existing contracts. The new gas sales agreement will run until mid-2017, after which the volumes will be allocated towards the gas sales agreement with the Azura power project that was signed in 2014. Management is also negotiating terms of an additional variable gas sales agreement with NGC to supply up to a further 100MMcfd. It is envisaged that the variable contract will allow for any volumes not taken by the buyers under the DSO to be placed elsewhere in the market together with any additional volumes that may be required.

At 9:00 am BST and WAT, Austin Avuru (CEO), Stuart Connal (COO), and Roger Brown (CFO) will host a webcast and conference call to discuss the results. The webcast can be accessed via the Company’s website hxxp://seplatpetroleum.com/. The dial in numbers are: (UK toll free): 0808 237 0030 and (international access): [phone]

[coxsmn] 28/7/2015 19:15

Yes, not really any surprises, results pretty much as expected. Good news about the growing gas revenues, onwards and upwards from here.

[whiskeyinthejar] 28/7/2015 07:29

Results. Looks as expected?

I think this is new:

"Agreement signed between NPDC and Seplat to offset NPDC's share of gas revenues against sums owed pre December 31 2014; further agreed to jointly source loan facilities, up to a limit of US$300 million, to fund joint venture expenditures with effect from January 2015. Agreement expected to reduce balance in H2"

[coxsmn] 18/7/2015 21:23

Afren shares suspended and close to bankrupt, Seplat could pick up some of their assets after all.

[whiskeyinthejar] 14/7/2015 16:09

So CSL brokers have increased their target price from N457 to N749/share for Seplat.

In Sterling, that's increase in target from £1.47 to £2.42.

I'm not sure it's Afren that Seplat are after though.

[whiskeyinthejar] 14/7/2015 16:00

JUL
14

NIGERIA | OIL&GAS | SEPLAT - Eyes on Afren

· Seplat has announced the release of US$368m in escrow cash. This is part of a total amount due of US$453m, which was allocated for an underlying acquisitions earmarked in Q1 2015.

· Investors may have thought that given the escrow nature attached to these funds, there was never any doubt that they would be repaid. We were aware of a timing issue related to exactly when the funds would be remitted.

· We have therefore added back N134/share (43p/share) in value from the US$368m remitted, which increases our target price from N457/share to N749/share, and maintain our Buy recommendation.

· We know that Seplat previously unsuccessfully bid for Afren (Sell, TP 0, price 1.9p), and so, given the timing of the proposed recapitalisation vote due on 24 July, a full takeover could still be possible if a ‘No’ vote is successful.

· In our previous note dated 9 January ‘Bargain Hunting in the Delta’ we examined the logic of any merger/acquisition between the two companies. We concluded that it could create the largest indigenous E&P in Nigeria, doubling Seplat’s 2P reserves, and trebling 2P and 2C reserves/resources, with the potential to achieve 200kboepd in production by 2018/19. Any acquisition of Afren would be a transformation in our view for Seplat, and could provide a significant catalyst to its shares given the discounted price which they could achieve now.

[keith95] 26/6/2015 17:05

Sold some at 111 bought at 103 today :)

[keith95] 25/6/2015 18:22

.... glass is always half empty with shorters .... and every company has its risks.

... few broker estimates I've seen have been positive on SEPLAT.

Sanctions lifting in Iran affecting oil price is more of a short term worry IMO.

[fxdealer3] 24/6/2015 19:29

The biggest risk for sepl is the $900m receivables ...


$400m cash deposit receivable is under legal action which takes long time and may or may not be recoverable


%500m is nigeria govt which given financial state of nigeria is alarming to say least ..


The $500m is growing very month( growing every month a nearly a year overdue at present 1 year revenue nearly ) and both these dubious receivables have been identified as huge risk to sepl by brokers and market

Given the net assets of company is about $900m and $900m receivables is at risk


Very high risk indeed let alone low oil and country specific risk


Fx

[keith95] 24/6/2015 17:52

... yeah coincidence that the payment was made with the USD so low w.r.t the pound don't you think!

4.5% divi is for the past 6 months.

[dukedosh] 24/6/2015 15:54

Received my divi this morning, which was most welcomed. This yields around 4.5% at the current price. According to my broker, the delay was caused by them receiving the cheque in USD and then having to convert to GBP. Same as last time!

Buhari seems to be making the right noises to me. Time will tell but this is Nigeria where nothing positive seems to happen quickly.

SEPL looks cheap down here. RBC have it as a sector outperform rating and 190p TP. They are attracted to increasing their exposure to gas which should give a decent hedge against the oil price.

[whiskeyinthejar] 23/6/2015 09:16

I think it'd help keep the shareprice steady if they'd split the divi quarterly instead of twice a year. I still haven't got mine though. I should phone my broker.


Everyone seems to be giving their opinion on how Buhari should reform the oil sector, but I can't find any quotes from Buhari himself on what he plans. So much uncertainty. I don't think he can afford to hurt the private oil companies though as he needs investment in oil and gas production.

[keith95] 23/6/2015 08:56

Got my divi this morning ....

[riggerbeautz] 23/6/2015 06:39

The drop early May took me out but sorely tempted to go in again as this could well be around a floor, then again looking at the chart it could hurtle over the 100p down to whatever figure. I'd like to believe the prospects here Duke, but a bit out of love with Nigerian oil plays lol

[dukedosh] 22/6/2015 20:34

Not received my divi yet. Waiting on a reply from my broker about this.

[coxsmn] 12/6/2015 15:38

Has anyone received their dividend yet?

[whiskeyinthejar] 08/6/2015 15:23

Video of Seplat chairman talking on CNBC on Friday. He seems confident that Buhari has experience to make the right decisions on reforming oil industry:

[whiskeyinthejar] 03/6/2015 07:49

Austin was talking about diversification into gas and midstream yesterday after AGM.
---

Seplat Intensifies Investment In Natural Gas To Boost Shareholders Value

— Jun 2, 2015 6:47 pm | 0 Comments
Seplat Petroleum Development Company Plc on Tuesday restated its commitment to enhance shareholders value with strategic investment in natural gas and crude oil processing and development.

Mr Austin Avuru, the company’s Chief Executive Officer, stated this at the company’s 2014 post-Annual General Meeting (AGM) news conference in Lagos.

Avuru said that the company had invested 300 million dollars in gas business, noting that the investment would boost its revenue and increase shareholders value in 2015 financial year.

He said that the company had made huge investment in oil and gas delivery, noting that the company would leverage on the expansion exercise to grow its revenue.

“We are now operating in mid stream by processing natural gas and crude oil development and delivery into the market,” Avuru said.

He added that the company successfully made efforts in its gas development strategy by expanding of its gas processing facility in Oben, Edo State.

The chief executive officer said that the new Oben gas processing plant would enable the company to increase supply to the domestic market.

“Seplat will take advantage of this to boost revenue from gas in 2015 and in the coming years,” he said.

According to him, the company lost some production days in the period due to interruptions on the pipelines.

He said that the company made good progress toward its long-term strategic aims, having grown its reserves base.

Avuru said that the company experienced some headwinds in 2014 that affected its growth and development.


“We saw headwinds to growth in the form of an abrupt decline in oil price during the second half of the year,” he stated.

Avuru said that the company would take a prudent approach in 2015 to reduce cost given the lower oil price environment.

He said that the company would also allocate capital selectively and prioritise investments that offer the highest returns.

Dr Ambrosie Orjiako, the company’s Chairman, said that decline in oil price presented many challenges for the exploration and production industry but with numerous opportunities.

Orjiako said that the company would take advantage of the opportunities to maximise efficiency and boost profitability.

He said Seplat would continue to monitor the oil price environment and challenge itself to respond by redoubling efforts to optimise operation in its current portfolio.


“We look forward to maintaining our position as one of the leading indigenous oil and gas operators in Nigeria in 2015,” Orjiako said. (NAN)

hxxp://leadership.ng/business/437996/seplat-intensifies-investment-in-natural-gas-to-boost-shareholders-value

[keith95] 31/5/2015 12:35

... spike ex divi was a surprise .. too good to be true it seemed ...

... looks very undervalued .. but then again .. risky.

[whiskeyinthejar] 28/5/2015 07:50

My average is a bit higher at 125p. I didn't try to trade the divi drop because I thought there was enough going on to support the price. I was wrong of course, but AGM is on Tuesday, so should get a trading update then. I think the director buy is encouraging.

CEO was on CNBC Africa yesterday

[keith95] 27/5/2015 17:16

Thanks for the above .. picked up some today at an average of 1.18p ...

.... having sold Ex divi ...

[whiskeyinthejar] 26/5/2015 08:41

This should help us today- federal government put out an advert saying Seplat has done nothing wrong on pioneer status:



Still some uncertainty for all oil companies in Nigeria about what tax they will pay in future, but statement says pioneer tax status has increased contribution of indigenous oil companies when overall oil production in Nigeria has been stagnating. But reform of national oil company NNPC is apparently the priority:

[whiskeyinthejar] 22/5/2015 15:47

Strong buying. Already recovered from ex-div markdown and trades currently going through at 130p.

[keith95] 21/5/2015 16:36

Tomorrow is ex dividend date ....