Share Name Share Symbol Market Type Share ISIN Share Description
Seplat Petroleum Development LSE:SEPL London Ordinary Share NGSEPLAT0008 ORD NGN0.50 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +2.50p +2.02% 126.00p 120.00p 121.50p 124.00p 118.50p 119.50p 382,882 11:32:38
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 334.8 32.6 34.8 3.4 709.94

SEPLAT Petroleum Development Co PLC Consolidated Half-Yearly Financial Results

27/07/2017 7:02am

UK Regulatory (RNS & others)


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SEPLAT Petroleum Development Co PLC

27 July 2017

Seplat Petroleum Development Company Plc

Consolidated financial results for the period ended 30 June 2017

Lagos and London, 27 July 2017: Seplat Petroleum Development Company Plc ("Seplat" or the "Company"), a leading Nigerian indigenous oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, today announces its consolidated half-yearly financial results for the period ended 30 June 2017 and provides an operational update. Information contained within this release is un-audited and is subject to further review. Details of the Webcast and conference call are set out on page 8 of this release.

Commenting on the results Austin Avuru, Seplat's Chief Executive Officer, said:

"Since the resumption of exports via the Forcados terminal our production has recovered strongly providing us with sufficient confidence to reinstate guidance, which we expect to be in the region of 43,000 to 50,000 boepd net to Seplat in the second half of the year. After 18 difficult months, the Company is now well-placed to secure a long-term return to profitability and growth. We have continued to cut costs, strengthen the balance sheet and establish alternative export routes to insure us against future disruption at Forcados. I believe that we are now a fitter, stronger Company than at any time in our history and look to the future with renewed optimism. If the current operating environment continues, we expect to see a significant improvement in our performance."

Half-yearly results highlights

Return to Strong Production

   --      Force majeure on exports from the Forcados terminal was subsequently lifted on 6 June. 

-- After downtime, overall working interest production in H1 across all blocks stood at 9,507 bopd and 101.3 MMscfd, or 26,383 boepd.

-- Guidance reinstated with working interest production in H2 after forecasted downtime expected to average 25,000 to 29,000 bopd and 110 to 130 MMscfd (43,000 to 50,000 boepd)

Multiple Export Routes

-- Upgrades and repairs now completed as planned on two jetties at the Warri refinery. The upgraded jetties will enable sustained exports of 30,000 bopd gross if required in the future

-- Completion of the 160,000 bopd Amukpe to Escravos pipeline prioritised by the Nigerian government and anticipated to be fully operational in Q1 2018.

Robust & Growing Gas Business

   --      Gas revenues of US$54 million in H1 (41% of total H1 revenues and up 15% year-on-year) 

-- Actively engaged with counterparties to finalise new GSA's - plan to take gross production towards 400 MMscfd

   --      Proceeding towards FID at the large scale ANOH gas and condensate development at OML 53 

Strengthen Balance Sheet

-- One year extension of revolving credit facility ("RCF"), 30% oversubscribed and successfully concluded in June

-- US$42 million debt principal repayments made in H1; gross debt at 30 June US$635 million and net debt US$433 million. Cash at bank at 30 June US$202 million and discretion maintained over spend (H1 capex US$11 million)

-- NPDC headline receivable at 30 June US$225 million (31 Dec 2016: US$239 million); net receivable US$215 million (31 Dec 2016: US$229 million) after adjusting for impairment.

Return to Operating Profit

   --      27% year-on-year reduction in G&A helped drive return to operating profitability 

-- Low cost production base (H1 production opex US$5.85/boe), diversification of oil export routes and growing contribution of the gas business positions Seplat on trajectory towards increased long term profitability

Financial overview

 
                          US$ million                    billion 
------------------------  ----------------  -----------  ---------------- 
                          H1 2017  H1 2016  % change(1)  H1 2017  H1 2016 
========================  =======  =======  ===========  =======  ======= 
Revenue                   132      153(4)   -14%         40       31 
------------------------  -------  -------  -----------  -------  ------- 
Gross Profit              54       69       -22%         16       15 
------------------------  -------  -------  -----------  -------  ------- 
Operating Profit/(Loss)   7        (42)     -116%        2        (10) 
------------------------  -------  -------  -----------  -------  ------- 
Profit / (loss) for 
 the Period               (28)     (61)     -54%         (8)      (13) 
------------------------  -------  -------  -----------  -------  ------- 
Operating cash flow(2)    106      40       165%         32       8 
========================  =======  =======  ===========  =======  ======= 
Working interest 
 production (boepd)       26,383   25,695    3% 
------------------------  -------  -------  -----------  -------  ------- 
Average realised 
 oil price (US$/bbl)(3)   45.0     45.8     -2% 
------------------------  -------  -------  -----------  -------  ------- 
Average realised 
 gas price (US$/Mscf)     2.97     3.05     -3% 
------------------------  -------  -------  -----------  -------  ------- 
 

(1) % change year-on-year calculated on US$ amounts; (2) Operating cash flow after movements in working capital; (3) Including sales in the period, stock in tank and hedging proceeds/costs (4) Net hedging fees reclassified to fair value movement

OPERATIONS REVIEW

Production for the first six months ended 30 June 2017

 
                                 Gross                          Working Interest 
-----------------  ----------------------------------  ---------------------------------- 
                   Liquids(1)   Gas    Oil equivalent  Liquids(1)   Gas    Oil equivalent 
---------  ------  ----------  ------  --------------  ----------  ------  -------------- 
           Seplat     bopd     MMscfd      boepd          bopd     MMscfd      boepd 
              % 
---------  ------  ----------  ------  --------------  ----------  ------  -------------- 
 
OMLs 4, 
 38 & 41   45.0%     16,748    225.0       54,250        7,536     101.3       24,413 
---------  ------  ----------  ------  --------------  ----------  ------  -------------- 
OPL 283    40.0%     2,656       -         2,656         1,062       -         1,062 
---------  ------  ----------  ------  --------------  ----------  ------  -------------- 
OML 53     40.0%     2,271       -         2,271          908        -          908 
---------  ------  ----------  ------  --------------  ----------  ------  -------------- 
Total                21,675    225.0       59,177        9,507     101.3       26,383 
---------  ------  ----------  ------  --------------  ----------  ------  -------------- 
 

(1) Liquid production volumes as measured at the LACT unit for OMLs 4, 38 and 41 and OPL 283 flow station. Volumes stated are subject to reconciliation and will differ from sales volumes within the period.

Average working interest production during the first six months was 26,383 boepd (compared to 25,695 boepd in 2016) and comprised 9,507 bopd liquids and 101.3 MMscfd gas. These reported production figures reflect the longer than expected suspension of oil production after the terminal operator, Shell Nigeria, declared force majeure at the terminal from 21 February 2016 to 6 June 2017 following disruption in production and exports caused by a spill on the Forcados Terminal subsea crude export pipeline. Despite this, the Company achieved continuity of gas production to supply the domestic market, albeit at managed levels during the force majeure period owing to condensate handling constraints. The recommencement of oil and condensate injection into the Forcados system enabled Seplat to successfully reinstate gross production at OMLs 4, 38 and 41 to pre-Force Majeure working interest levels of around 56,000 boepd, being liquids of around 34,000 bopd and gas volumes of around 130 MMscfd.

In H1 2017, Seplat lifted and a monetised an equivalent of 0.5 MMbbls of oil from OML55, which resulted in a receipt of US$22.6 million. The carrying value of the investment in the balance sheet was reduced from US$250.1 million to US$229 million and a profit of US$1.5 million was taken to the profit and loss in the period.

Looking ahead, the Company is reinstating working interest production guidance (before reconciliation losses) for H2 2017 of 25,000 to 29,000 bopd and 110 to 130 MMscfd, which equates to 43,000 to 50,000 boepd. On a full year 2017 basis, also taking into account H1 actual production, this translates to approximately 17,000 to 19,000 bopd and 105 to 115 MMscfd, or 35,000 to 38,000 boepd. This guidance range is predicated on there being no further prolonged force majeure event and an overall assumed production uptime range of 75% to 85% during H2.

Proactive steps to secure alternative oil export routes

The Company's policy of creating multiple export routes for all of its assets, has resulted in actively pursuing alternative crude oil evacuation options for production at OMLs 4, 38 and 41 and potential strategies to further grow and diversify production in order to reduce any over-reliance on one particular third party operated export system. In line with this objective, the Company has successfully completed repairs and upgrades on two jetties at the Warri refinery that will enable sustained exports of 30,000 bopd (gross) if required in the future. Prior to the repair and upgrade work on the two jetties gross exports via the Warri refinery were around the 15,000 bopd level. Exports via the Warri refinery jetty have incurred barging costs of around US$11/bbl but partially offsetting this, exports via this route are not subject to the reconciliation losses (typically in the order of 10% to 12%) or terminal crude handling and transport charges when exporting via the TFS.

Longer term, the Amukpe to Escravos 160,000 bopd capacity pipeline is set to provide a third export option for liquids production at OMLs 4, 38 and 41. Seplat has agreed with the pipeline owners, NAPIMS (a 100% subsidiary of NNPC) and Pan Ocean Corporation Limited, to a joint operating model. An MOU was signed on 12 July 2017 with the pipeline operator Pan Ocean (and approved by NAPIMS) to work in partnership on completion of the pipeline, negotiation with the Escravos Terminal Operator - Chevron on crude handling and operation & maintenance of the pipeline going forward.

With line of sight on the availability of three independent export routes it is Seplat's ultimate intention to utilise all three to ensure there is adequate redundancy in evacuation routes, reducing downtime which has adversely affected the business over a number of years, significantly de-risking the distribution of production to market.

Continued strong performance of the gas business with production and revenue upside in H2

Alongside its oil business, the Company has also prioritised the commercialisation and development of the substantial gas reserves and resources identified at its blocks and is today a leading supplier of gas to the domestic market in Nigeria. The lifting of force majeure and resumption of full exports via the TFS has removed the condensate handling constraints and translated into an immediate uplift in gross gas production to around the 290 MMscfd level from a previously constrained level of 225 MMscfd. Furthermore, having successfully completed and commissioned the Phase II expansion of the Oben gas processing plant earlier in the year, taking overall operated gas processing capacity to the 525 MMscfd level, the Company is actively engaged with counterparties to increase contracted gas sales with the intention of taking gross production towards the 400 MMscfd level. Of the 525 MMscfd total processing capacity, 465 MMscfd is located at Oben with the remaining 60 MMscfd located at Sapele. The 375 MMscfd expansion at Oben (Phases I and II) was completed by Seplat as a 100% sole risk project. The expansion of gas processing capacity is also designed to allow the Company to receive and tariff third party gas volumes in the future.

The ANOH gas development at OML 53 (and adjacent OML 21 with which the upstream project is unitised) is expected to underpin the next phase of growth for the gas business and Seplat's involvement positions it at the heart of one of the largest greenfield gas and condensate developments onshore the Niger Delta to date. The Company is working with its partners to finalise a framework within which to progress the upstream and midstream elements of the project to FID in H2 2017.

Rig activity and other capital projects

Rig based activity year to date has been limited with just one rig deployed for a workover well in the Orogho field. The workover and re-completion of the Orogho-7 production well commenced in July and is expected to be completed in early August. Upgrades to the liquid treatment infrastructure at OMLs 4,38 and 41 have also been made that will enable Seplat to inject export grade dry crude via alternative routes and at the same time eliminate crude handling charges that have historically been incurred on water in the wet crude injected into the TFS. The Company continues to exercise discretion over spend and, having pulled back on expenditure during the extended period of force majeure, is selectively considering production drilling opportunities in the existing portfolio with a view to reinstating a work programme designed to capture the highest cash return production opportunities whilst diligently preserving a liquidity buffer.

FINANCE REVIEW

Revenue

Gross revenue for H1 2017 was US$132 m illion ( 40 billion), a decrease of 14% compared to the same period in 2016 (H1 2016: US$153 million / 40 billion). The suspension of exports at the Forcados terminal and consequently lower oil sales together with lower oil prices in the period have offset the year-on-year increase in gas production rates and step-up in gas revenues.

Crude revenue (after stock movements) was US$77 million (N24 billion) for the first six months, a 27% decrease from the same period in 2016 (H1 2016: US$106 million / 22 billion). Gas revenue for the period was US$54 million ( 17 billion), a 15% increase from the same period in 2016 (H1 2016: US$47 million / N10 billion).

During the first six months the Group realised an average oil price of US$45.0/bbl(1) (H1 2016: US$45.8/bbl), against an average price for Brent in the period of US$45.1/bbl (H1 2016: US$45.83/bbl), and an average gas price of US$2.97/Mscf (H1 2016: US$3.05/Mscf). Working interest sales volume for the period increased slightly to 4.78 MMboe from 4.67 MMboe during the same period in 2016. Total gas volumes sold were 18.3 Bscf (H1 2016: 15.5 Bscf), while total liquid (crude and condensate) volumes lifted during the first six months were 1.72 MMbbls (H1 2016: 1.5 MMbbls).

Gross profit

Gross profit for the first six months was US$54 million ( 16 billion), a decrease of 22% compared to the same period in 2016 (H1 2016: US$69 million / 15 billion). The movement is primarily driven by the reduction in oil revenues recorded in the period, partially offset by the higher gas revenues and lower cost of sales.

Direct operating costs decreased to US$28 million ( 9 billion) in the period (H1 2016: US$39 million / N8 billion), principally as a result of force majeure limiting production activities. Rig related and other field expenses, which form part of direct operating costs decreased by 34% compared to the same period in 2016 at US$28 million (N6 billion) as a result of lower operation & maintenance costs.

Operating profit

Operating profit for the first six months was US$7 million (N2 billion), compared to an operating loss in the same period in 2016 (H1 2016: US$42 million / N10 billion).

Partially offsetting the impact of lower gross revenues was a 27% year-on-year decrease in G&A expenses to US$36 million (N11 billion) during the first six months (H1 2016: US$50 million / N10 billion).

Tax

The Group did not recognise deferred income tax assets of US$235 million (2016: US$192 million) in respect of temporary differences amounting to US$357 million (2016: US$292 million). Out of this, deferred tax asset of US$71 million (2016: US$47 million) relates tax losses of US$109 million (2016: US$71 million). Taxation for the period was US$1.1 million ( 342 million).

Loss for the period

The Group loss after tax for the first six months was US$28 million ( 8 billion), compared to a loss in the same period in 2016 (H1 2016: US$61 million, 13 billion). Net finance charges stood at US$34 million (( 10 billion) compared to US$16 million ( 3 billion) for the same period in 2016 principally as a result of interest accruable on NPDC and NGC receivables recognised as finance income in the prior period.

Cash flows from operating activities

Operating cash flow for the first six months was US$106 million ( 32 billion), up 165% compared to the same period in 2016 (H1 2016: US$40 million, 8 billion).

The outstanding net NPDC receivable at period end, after offsetting NPDC's share of gas revenue, crude handling charges and adjusting for impairment stood at US$215 million (2016: US$229 million). In accordance with the agreement signed in July 2015 with NPDC on terms for the payment of receivables due to Seplat, the Company has continued to withhold and offset gas revenues attributable to NPDC's 55% share of contracted gas sales. NPDC has agreed to pay current year US Dollar cash calls as they fall due and also make further payments for past receivables as well as continuing the arrangement whereby NPDC gas receipts are used to fund current year Naira cash calls as well as offsetting historical balances.

Cash flows from investing activities

Net cash flows from investing activities were US$12 million (N3.6 billion), slightly up from US$9 million (N2.4 billion) during the same period in 2016.

Capital investments for the first six months amounted to US$11 million (N3 billion) and reflects the limited levels of operational activity owing to the extended shut-in of the Forcados terminal. The vast majority of the Group's capital expenditures are discretionary and it has the flexibility to align spend with cash flow on a rolling basis. Committed capital expenditures for the rest of the year amount to US$20 million and relate to completion of the Oben booster compression project, construction activities at the Oben field logistics base and installation of a 20" Oben to NGC gas sales pipeline. Also included is the drilling of the Anagba-1 appraisal well at OPL 283 and costs to progress the upstream and midstream elements of the ANOH project to FID.

Cash flows from financing activities

During the first six months loan repayments on the Company's seven year secured Term Loan amounted to US$16.5 million ( 5 billion) and repayments on its revolving credit facility ("RCF") amounted to US$25 million ( 8 billion). Gross debt at period end was US$635 million (N194 billion). Cash at bank at period end stood at US$202 million ( 62 billion) and net debt US$433 million (N132 billion).

Having re-profiled the seven-year Term Loan in Q3 2016 the Company announced on 3 July that it had successfully concluded an oversubscribed one year extension of the RCF. The RCF, originally due to expire at the end of 2017, now expires on 31 December 2018 and has been successfully amended to amortise the remaining outstanding principal balance of US$150 million in equal instalments over five quarters commencing Q4 2017. Overall, Seplat's aggregate indebtedness under its Term Loan and RCF has reduced by US$365 million from its peak in Q1 2015 of US$1 billion, which is a significant deleveraging of the balance sheet particularly in exceptionally difficult trading conditions over the past 18 months.

Hedging

The Company had in place dated Brent puts covering a volume of 1.99 MMbbls over H1 2017 at a strike price of US$47.0/bbl resulting in a realised hedging loss of US$10 million in the period. Over H2 2017 the Company has in place dated Brent puts covering a volume of 1.70 MMbbls at a strike price of US$50.0/bbl. The board and management continue to closely monitor prevailing oil market dynamics, and will consider further measures to provide appropriate levels of cash flow assurance in times of oil price weakness and volatility.

Principal risks and uncertainties

The Board of Directors is responsible for setting the overall risk management strategy of the Company and the determination of what level of risk is acceptable for Seplat to bear. The principal risks and uncertainties facing Seplat at the year-end are detailed in the risk management section of the 2016 Annual Report and Accounts. The board has identified the principal risks for the remainder of 2017 to be:

-- Third party infrastructure downtime and the corresponding impact on oil and gas production levels

   --      Niger Delta stability and geo-political risk 
   --      Oil price volatility 
   --      Successful delivery of the planned work programme 

Responsibility Statement

The Directors confirm that to the best of their knowledge:

a) The condensed set of financial statements have been prepared in accordance with lAS 34 'Interim Financial Report';

b) The interim management report includes a fair review of the information required by UK DTR 4.2.7R indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year and

c) The interim management report includes a fair review of the information required by UK DTR 4.2.8R disclosure of related parties' transactions and changes therein.

The Directors of Seplat Plc are as listed in the Group's 2016 Annual Report and Accounts. A list of current Directors is included on the company website: www.seplatpetroleum.com.

By order of the Board,

 
 
A. B. C. Orjiako           A. O. Avuru                R.T. Brown 
FRC/2013/IODN/00000003161  FRC/2013/IODN/00000003100  FRC/2014/IODN/00000007983 
Chairman                   Chief Executive Officer    Chief Financial 
                                                       Officer 
27 July 2017               27 July 2017               27 July 2017 
 

Important notice

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the market Abuse Regulation. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

Certain statements included in these results contain forward-looking information concerning Seplat's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which Seplat operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within Seplat's control or can be predicted by Seplat. Although Seplat believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Seplat or any other entity, and must not be relied upon in any way in connection with any investment decision. Seplat undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

Ernst & Young

10th Floor, UBA House

57, Marina

Lagos, Nigeria

Tel: +234 (01) 844 996 2/3

Fax: +234 (01) 463 0481

Email: services@ng.ey.com

www.ey.com

Report on review of interim condensed consolidated financial statements to the shareholders of Seplat Petroleum Development Company Plc

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Seplat Petroleum Development Company Plc and its subsidiaries (the Group), which comprise the interim condensed consolidated statements of financial position at 30 June 2017 and profit or loss and other comprehensive income, changes in equity and cash flows for the half year then ended, and explanatory notes. The Company's directors are responsible for the preparation and fair presentation of these interim condensed consolidated financial statements in accordance with IAS 34 Interim Financial Reporting and in the manner required by the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 and the Financial Reporting Council of Nigeria (FRCN) Act, No. 6, 2011. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Bernard Carrena, FCA

FRC/2013/ICAN/00000000670

For Ernst & Young

Lagos, Nigeria

27 July 2017

Webcast and conference call

At 10:00 am BST (London) / 10:00 am WAT (Lagos), Austin Avuru (CEO) and Roger Brown (CFO) will host a webcast and conference call to discuss the Company's results.

The webcast can be accessed via the Company's website http://seplatpetroleum.com/ or at the following address:

https://webconnect.webex.com/webconnect/onstage/g.php?MTID=e1dc4d6ca735b539340fecc960acf3f9b

To listen to the audio commentary only, participants can use the following telephone number:

Telephone Number (UK toll free): 0844 871 9434 or 0800 073 1340

Telephone number (international access): +44 (0) +44 (0) 1452 569393

Conference title: SEPLAT PETROLEUM DEVELOPMENT COMPANY - INTERIM RESULTS

Conference ID: 52989164

If you are listening to the audio commentary and viewing the webcast, you may notice a slight delay to the rate the slides change on the webcast. If this is affecting you, please download the pdf slide pack from the Company's website http://seplatpetroleum.com/

Enquiries:

 
Seplat Petroleum Development Company 
 Plc 
Roger Brown, CFO                            +44 203 725 6500 
Andrew Dymond, Head of Investor Relations 
Ayeesha Aliyu, Investor Relations           +234 1 277 0400 
Chioma Nwachuku, GM - External Affairs 
 and Communications 
------------------------------------------  ---------------- 
FTI Consulting 
 Ben Brewerton / Sara Powell 
 seplat@fticonsulting.com                   +44 203 727 1000 
------------------------------------------  ---------------- 
Citigroup Global Markets Limited 
 Tom Reid / Luke Spells                     +44 207 986 4000 
------------------------------------------  ---------------- 
Investec Bank plc 
 Chris Sim / George Price                   +44 207 597 4000 
 

Notes to editors

Seplat Petroleum Development Company Plc is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, listed on the Main Market of the London Stock Exchange ("LSE") (LSE:SEPL) and Nigerian Stock Exchange ("NSE") (NSE:SEPLAT).

Seplat is pursuing a Nigeria focused growth strategy and is well-positioned to participate in future divestment programmes by the international oil companies, farm-in opportunities and future licensing rounds. For further information please refer to the Company website, http://seplatpetroleum.com/

Interim condensed consolidated statement of profit or loss and other comprehensive income

for the half year ended 30 June 2017

 
                                                Half year ended  Half year ended        3 months ended  3 months ended 
                                                   30 June 2017     30 June 2016          30 June 2017    30 June 2016 
                                               ----------------  ---------------  --------------------  -------------- 
                                                      Unaudited        Unaudited             Unaudited       Unaudited 
                                               ----------------  ---------------  --------------------  -------------- 
                                         Note                'm               'm                    'm              'm 
=======================================  ====  ================  ===============  ====================  ============== 
Revenue                                   7              40,317           31,576                25,843          14,991 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Cost of sales                             8            (23,914)         (16,854)              (15,290)         (6,162) 
=======================================  ====  ================  ===============  ====================  ============== 
Gross profit                                             16,403           14,722                10,553           8,829 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
General and administrative expenses       9            (11,108)         (10,333)               (5,979)         (6,069) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Loss on foreign exchange - net            10              (264)          (6,382)                 (793)         (5,897) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Fair value loss                           11            (2,817)          (7,573)               (1,155)         (7,414) 
=======================================  ====  ================  ===============  ====================  ============== 
Operating profit/(loss)                                   2,214          (9,566)                 2,626        (10,551) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Finance income                            12                270            5,694                   206           5,270 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Finance costs                             12           (10,574)          (8,321)               (5,317)         (3,933) 
=======================================  ====  ================  ===============  ====================  ============== 
Loss before taxation                                    (8,090)         (12,193)               (2,485)         (9,214) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Taxation                                  13              (342)            (615)                  (92)             886 
=======================================  ====  ================  ===============  ====================  ============== 
Loss for the period                                     (8,432)         (12,808)               (2,577)         (8,328) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
 
Loss attributable to equity holders of 
 parent                                                 (8,432)         (13,081)               (2,577)         (9,340) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Profit attributable to non-controlling 
 interest                                                     -              273                     -           1,012 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
 
Other comprehensive income/(loss): 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Items that may be reclassified to 
profit or loss: 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Foreign currency translation difference                   1,049          113,254               (1,403)         113,784 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
 
Total comprehensive (loss)/income for 
 the period                                             (7,383)          100,446               (3,980)         105,456 
=======================================  ====  ================  ===============  ====================  ============== 
 
(Loss)/profit attributable to equity 
 holders of parent                                      (7,383)           98,436               (3,980)         102,707 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Profit attributable to non-controlling 
 interest                                                     -            2,010                     -           2,749 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
 
Loss per share ( )                        14            (14.97)          (23.33)                (4.57)         (16.66) 
---------------------------------------  ----  ----------------  ---------------  --------------------  -------------- 
Diluted loss per share( )                 14            (14.83)          (23.24)                (4.53)         (16.60) 
=======================================  ====  ================  ===============  ====================  ============== 
 

Interim condensed consolidated statement of financial position

As at 30 June 2017

 
                                                   As at 30 June 2017  As at 31 Dec 2016 
                                                   ------------------  ----------------- 
                                                            Unaudited            Audited 
                                                   ------------------  ----------------- 
                                             Note                  'm                 'm 
===========================================  ====  ==================  ================= 
Assets 
-------------------------------------------  ----  ------------------  ----------------- 
Non-current assets 
-------------------------------------------  ----  ------------------  ----------------- 
Oil and gas properties                                        369,046            373,442 
-------------------------------------------  ----  ------------------  ----------------- 
Other property, plant and equipment                             1,809              2,430 
-------------------------------------------  ----  ------------------  ----------------- 
Other asset                                   17               70,040             76,277 
-------------------------------------------  ----  ------------------  ----------------- 
Prepayments                                                     9,672             10,253 
-------------------------------------------  ----  ------------------  ----------------- 
Total non-current assets                                      450,567            462,402 
===========================================  ====  ==================  ================= 
Current assets 
-------------------------------------------  ----  ------------------  ----------------- 
Inventories                                                    31,229             32,395 
-------------------------------------------  ----  ------------------  ----------------- 
Trade and other receivables                   18              132,520            119,160 
-------------------------------------------  ----  ------------------  ----------------- 
Prepayments                                                       983              2,035 
-------------------------------------------  ----  ------------------  ----------------- 
Cash & cash equivalents                                        61,631             48,684 
===========================================  ====  ==================  ================= 
Total current assets                                          226,363            202,274 
===========================================  ====  ==================  ================= 
Total assets                                                  676,930            664,676 
===========================================  ====  ==================  ================= 
Equity and liabilities 
-------------------------------------------  ----  ------------------  ----------------- 
Equity 
-------------------------------------------  ----  ------------------  ----------------- 
Issued share capital                          19                  283                283 
-------------------------------------------  ----  ------------------  ----------------- 
Share premium                                                  82,080             82,080 
-------------------------------------------  ----  ------------------  ----------------- 
Share based payment reserve                   19                3,415              2,597 
-------------------------------------------  ----  ------------------  ----------------- 
Capital contribution                                            5,932              5,932 
-------------------------------------------  ----  ------------------  ----------------- 
Retained earnings                                              76,620             85,052 
-------------------------------------------  ----  ------------------  ----------------- 
Foreign currency translation reserve                          201,478            200,429 
===========================================  ====  ==================  ================= 
Total equity                                                  369,808            376,373 
===========================================  ====  ==================  ================= 
Non-current liabilities 
-------------------------------------------  ----  ------------------  ----------------- 
Interest bearing loans & borrowings           16              133,163            136,060 
-------------------------------------------  ----  ------------------  ----------------- 
Deferred tax liabilities                                           23                  - 
-------------------------------------------  ----  ------------------  ----------------- 
Contingent consideration                      23                3,957              3,672 
-------------------------------------------  ----  ------------------  ----------------- 
Provision for decommissioning obligation                          197                182 
-------------------------------------------  ----  ------------------  ----------------- 
Defined benefit plan                                            1,905              1,559 
===========================================  ====  ==================  ================= 
Total non-current liabilities                                 139,245            141,473 
===========================================  ====  ==================  ================= 
Current liabilities 
-------------------------------------------  ----  ------------------  ----------------- 
Interest bearing loans and borrowings         16               57,867             66,489 
-------------------------------------------  ----  ------------------  ----------------- 
Trade and other payables                      20              109,114             79,766 
-------------------------------------------  ----  ------------------  ----------------- 
Current taxation                                                  896                575 
-------------------------------------------  ----  ------------------  ----------------- 
Total current liabilities                                     167,877            146,830 
===========================================  ====  ==================  ================= 
Total liabilities                                             307,122            288,303 
===========================================  ====  ==================  ================= 
Total shareholders' equity and liabilities                    676,930            664,676 
===========================================  ====  ==================  ================= 
 

Interim condensed consolidated statement of financial position continued

As at 30 June 2017

The financial statements on pages 10 to 32 were approved and authorised for issue by the board of directors on 20 July 2017 and were signed on its behalf by

 
 
A. B. C. Orjiako           A. O. Avuru                R.T. Brown 
FRC/2013/IODN/00000003161  FRC/2013/IODN/00000003100  FRC/2014/IODN/00000007983 
Chairman                   Chief Executive Officer    Chief Financial 
                                                       Officer 
27 July 2017               27 July 2017               27 July 2017 
 

Interim condensed consolidated statement of changes in equity continued

for the half year ended 30 June 2017

 
for the half year ended 30 
 June 2016 
============================================================  ==========  ============  ==========  ===========  ===============  =========== 
                                                                   Share       Foreign 
                      Issued                                       based      currency 
                       share          Share          Capital     payment   translation    Retained               Non-controlling        Total 
                     capital        premium     contribution     reserve       reserve    earnings        Total         interest       equity 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
                          'm             'm               'm          'm            'm          'm           'm               'm           'm 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
 
At 1 January 
 2016                    282         82,080            5,932       1,729        56,182     134,919      281,124            (148)      280,976 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
(Loss)/Profit 
 for the period            -              -                -           -             -    (13,081)     (13,081)              273     (12,808) 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Other 
 comprehensive 
 income                    -              -                -                   111,517           -      111,517            1,737      113,254 
==============  ============  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
Total 
 comprehensive 
 loss for the 
 period                    -              -                -           -       111,517    (13,081)       98,436            2,010      100,446 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
Transactions 
with owners 
in their 
capacity 
as owners: 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Share based 
 payments                  -              -                -         375             -           -          375                -          375 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Dividends                  -              -                -           -             -     (5,118)      (5,118)                       (5,118) 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
Total                      -              -                -         375             -     (5,118)      (4,743)                -      (4,743) 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
At 30 June 2016 
 (unaudited)             282         82,080            5,932       2,104       167,699     116,720      374,817            1,862      376,679 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
 
 
for the half year ended 30 June 2017 
============================================================================================================================================= 
                                                                   Share       Foreign 
                      Issued                                       based      currency 
                       share          Share          Capital     payment   translation    Retained               Non-controlling        Total 
                     capital        premium     contribution     reserve       reserve    earnings        Total         interest       equity 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
                          'm             'm               'm          'm            'm          'm           'm               'm           'm 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
At 1 January 
 2017                    283         82,080            5,932       2,597       200,429      85,052      376,373                -      376,373 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Loss for the 
 period                    -              -                -           -             -     (8,432)      (8,432)                -      (8,432) 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Other 
 comprehensive 
 income                    -              -                -           -         1,049           -        1,049                -        1,049 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
Total 
 comprehensive 
 loss for the 
 period                    -              -                -           -         1,049     (8,432)      (7,383)                -      (7,383) 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
Transactions 
with owners 
in their 
capacity 
as owners:                 -              -                -           -             -           -            -                -            - 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Share based 
 payments                  -              -                -         818             -           -          818                -          818 
---------------  -----------  -------------  ---------------  ----------  ------------  ----------  -----------  ---------------  ----------- 
Dividends                  -              -                -           -             -           -            -                -            - 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
Total                      -              -                -         818             -           -          818                -          818 
At 30 June 2017 
 (unaudited)             283         82,080            5,932       3,415       201,478      76,620      369,808                -      369,808 
===============  ===========  =============  ===============  ==========  ============  ==========  ===========  ===============  =========== 
 
 
 

Interim condensed consolidated statement of cash flow

for the half year ended 30 June 2017

 
                                                                                                                      Half year ended     Half year ended 
                                                                                                                         30 June 2017        30 June 2016 
                                                                                                                  -------------------  ------------------ 
                                                                                                                                   'm                  'm 
                                                                                                                  -------------------  ------------------ 
                                                                                                           Note             Unaudited           Unaudited 
================================================================================================================  ===================  ================== 
Cash flows from operating activities 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Cash generated from operations 21                                                                                              32,492               8,287 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Net cash inflows from operating activities                                                                                     32,492               8,287 
================================================================================================================  ===================  ================== 
Cash flows from investing activities 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Acquisition of oil and gas properties                                                                                         (3,424)             (3,091) 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Acquisition of other property, plant and equipment                                                                              (118)               (246) 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Receipts from other asset 17                                                                                                    6,914                   - 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Interest received                                                                                                                 270               5,694 
================================================================================================================  ===================  ================== 
Net cash inflows from investing activities                                                                                      3,642               2,357 
================================================================================================================  ===================  ================== 
Cash flows from financing activities                                                                                                - 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Repayments of bank financing                                                                                                 (12,693)            (24,201) 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Dividends paid                                                                                                                      -             (5,118) 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Interest paid                                                                                                                (10,560)             (8,298) 
================================================================================================================  ===================  ================== 
Net cash outflows from financing activities                                                                                  (23,253)            (37,617) 
================================================================================================================  ===================  ================== 
Net decrease in cash and cash equivalents                                                                                      12,881            (26,973) 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Cash and cash equivalents at beginning of period                                                                               48,684              64,828 
----------------------------------------------------------------------------------------------------------------  -------------------  ------------------ 
Effects of exchange rate changes on cash and cash equivalents                                                                      66            (13,028) 
================================================================================================================  ===================  ================== 
Cash and cash equivalents at end of period                                                                                     61,631              24,827 
================================================================================================================  ===================  ================== 
 

Notes to the interim condensed consolidated financial statements

   1.    Corporate structure and business 

Seplat Petroleum Development Company Plc ('Seplat' or the 'Company'), the parent of the Group, was incorporated on 17 June 2009 as a private limited liability company and re-registered as a public company on 3 October 2014, under the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004. The Company commenced operations on 1 August 2010. The Company is principally engaged in oil and gas exploration and production.

The Company's registered address is: 25a Lugard Avenue, Ikoyi, Lagos, Nigeria.

The Company acquired, pursuant to an agreement for assignment dated 31 January 2010 between the Company, SPDC,

TOTAL and AGIP, a 45% participating interest in the following producing assets:

OML 4, OML 38 and OML 41 located in Nigeria. The total purchase price for these assets was US$340 million paid at the completion of the acquisition on 31 July 2010 and a contingent payment of US$33 million payable 30 days after the second anniversary, 31 July 2012, if the average price per barrel of Brent Crude oil over the period from acquisition up to 31 July 2012 exceeds US$80 per barrel. US$358.6 million was allocated to the producing assets including US$18.6 million as the fair value of the contingent consideration as calculated on acquisition date. The contingent consideration of US$33 million was paid on 22 October 2012.

In 2013, Newton Energy Limited ("Newton Energy"), an entity previously beneficially owned by the same shareholders as Seplat, became a subsidiary of the Company. On 1 June 2013, Newton Energy acquired from Pillar Oil Limited ("Pillar Oil") a 40 percent Participant interest in producing assets: the Umuseti/Igbuku marginal field area located within OPL 283 (the "Umuseti/Igbuku Fields").

On 27 March 2013, Seplat Energy Limited ("Seplat Energy") was incorporated. The principal activities of the Company is the exploration, development and transportation of petroleum products and Seplat Gas Company Limited ("Seplat Gas") was incorporated on 9 December 2013 as a private limited liability company to engage in oil and gas exploration and production.

In 2015, the Group purchased a 40% participating interest in OML 53, onshore north eastern Niger Delta, from Chevron Nigeria Ltd for US$259.4 million.

In 2017, the Group incorporated a new subsidiary, ANOH Gas Processing Company Limited. The principal activities of the Company is the processing of gas from OML 53.

The Company together with its subsidiary, Newton Energy, and six wholly owned subsidiaries, namely, Seplat

Petroleum Development Company UK Limited ('Seplat UK'), which was incorporated on 21 August 2014, Seplat East

Onshore Limited ('Seplat East'), which was incorporated on 12 December 2014, Seplat East Swamp Company Limited

('Seplat Swamp'), which was incorporated on 12 December 2014, Seplat Gas Company Limited ('Seplat GAS'), which was incorporated on 12 December 2014, Seplat Energy Limited ('Seplat Energy'), which was incorporated on 27 March 2013 and ANOH Gas Processing Company Limited which was incorporated on 18 January 2017 are collectively referred to as the Group.

 
Subsidiary                             Country of incorporation and 
                                                  place of business  Shareholding %               Principal activities 
=================================  ================================  ==============  ================================= 
Newton Energy Limited                                                                        Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat Petroleum Development UK                                                              Oil & gas exploration and 
                                                     United Kingdom            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat East Onshore Limited                                                                  Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat East Swamp Company Limited                                                            Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat Gas Company                                                                           Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat Energy Limited                                                                        Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
ANOH Gas Processing Company                                 Nigeria            100%                     Gas processing 
Limited 
=================================  ================================  ==============  ================================= 
 

Notes to the interim condensed consolidated financial statements continued

   2.    Significant changes in the current reporting period 

During the reporting period ended 30 June 2017, the Group renegotiated its lending arrangements resulting in a twelve month extension of its revolving credit facility till 31 December 2018. The Group also significantly increased its production volumes as a result of the lift in the force majeure which had in the previous financial year restricted exports from the Forcados terminal. The Group plans to open up other export lines to ensure sustained growth in production volumes.

Resumption of exports via the Forcados terminal, has strengthened the Group's financial performance and position during the period ended 30 June 2017.

   3.    Summary of significant accounting policies 
   3.1   Introduction to summary of significant accounting policies 

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards which are set out below.

   3.2   Basis of preparation 
   i)        Compliance with IFRS 

The interim condensed consolidated financial statements of the Group for the half year reporting period ended 30 June 2017 have been prepared in accordance with accounting standard IAS 34 Interim financial reporting.

   ii)       Historical cost convention 

The financial information has been prepared under the going concern assumption and historical cost convention, except for contingent consideration, other asset and financial instruments on initial recognition measured at fair value. The historical financial information is presented in Nigerian Naira and all values are rounded to the nearest million ( 'm) except when otherwise indicated. The accounting policies are applicable to both the Company and Group.

   iii)      Going concern 

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least twelve months from the date of these financial statements.

   iv)      New and amended standards adopted by the Group 

There were a number of new standards and amendments to standards that are effective for annual periods beginning after 1 January 2017; the Group has adopted these new or amended standards in preparing the interim condensed consolidated financial statements. The nature and impact of the new standards and amendments to the standards are described below.

Other than the changes described below, the accounting policies adopted are consistent with those of the previous financial year.

   a)      Disclosure initiative - Amendments to IAS 7 

The Group is now required to explain changes in their liabilities arising from financing activities. This includes changes arising from cash flows (e.g. drawdowns and repayments of borrowings) and non-cash changes such as acquisitions, disposals, accretion of interest and unrealised exchange differences.

Changes in financial assets are included in this disclosure if the cash flows were, or are, included in cash flows from financing activities. This is the case, for example, for assets that hedge liabilities arising from financing liabilities.

The Group may include changes in other items as part of this disclosure, for example by providing a 'net debt' reconciliation. However, in this case the changes in the other items are disclosed separately from the changes in liabilities arising from financing activities.

Notes to the interim condensed consolidated financial statements continued

The Group discloses this information in tabular format as a reconciliation from opening and closing balances, but may adopt a different format as the standard does not mandate a specific format.

The Group discloses this information in Note 16.

   v)     New standards, amendments and interpretations not yet adopted 

The Group has the following updates to information provided in the last annual financial statements about the standards issued but not yet effective that may have a significant impact on the Group's consolidated financial statements.

   a.      Amendments to IFRS 2 Share-based payments 

In June 2016, the IASB made amendments to IFRS 2 Share-based payments which clarified the effect of vesting conditions on the measurement of cash-settled share-based payment transactions, the classification of share-based payment transactions with net settlement features and the accounting for a modification of the terms and conditions that changes the classification of the transaction from cash-settled to equity-settled.

The amendments are effective for reporting periods beginning on or after 1 January 2018. The Group will adopt the amendments from 1 January 2018.

   b.      IFRS 9 Financial Instruments 

IFRS 9 Financial instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities, the standard introduces new rules for hedge accounting and a new impairment model for financial assets. The Group has decided not to adopt IFRS 9 until it becomes mandatory on 1 January 2018.

The Group is undergoing a detailed assessment of the impact of the new standard on the classification and measurement of its financial assets. From the preliminary results, the Group does not expect the new guidance to have a significant impact on the classification and measurement of its financial assets for the following reason:

-- All of the Group's financial assets are currently classified as loans and receivables and are measured at amortised cost and will satisfy the conditions for classification at amortised cost under IFRS 9.

There will be no impact on the Group's accounting for financial liabilities, as the new requirements only affect accounting for financial liabilities that are designated at fair value through profit or loss and the Group does not have such liabilities. The de-recognition rules have been transferred from IAS 39 Financial Instruments: Recognition and Measurement and have not been changed. The new hedge accounting rules will align the accounting for hedging instruments more closely with the Group's risk management practices. As a general rule, more hedge relationships might be eligible for hedge accounting, as the standard introduces a more principles-based approach. The Group does not expect a significant impact on the accounting for its hedging relationships as a result of the adoption of IFRS 9, as they have not formally elected to apply hedge accounting.

The new impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses as is the case under IAS 39. It applies to financial assets classified at amortised cost, debt instruments measured at fair value through OCI (FVOCI), contract assets under IFRS 15: Revenue from Contracts with Customers and lease receivables. Based on assessments undertaken on the Group's portfolio of NPDC receivables, it estimates that should the new rules had been adopted as at 1 January 2017, there would have been an increase to its loss allowance for NPDC receivables of approximately N1.2 billion (US$4 million) at that date and retained earnings would decrease by the same amount.

The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extent of the Group's disclosures about its financial instruments particularly in the year of the adoption of the new standard.

   c.      IFRS 15 Revenue from contracts with customers 

The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers revenue arising from the sale of goods and the rendering of services and IAS 11 which covers construction contracts.

The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer.

Notes to the interim condensed consolidated financial statements continued

The standard permits either a full retrospective or a modified retrospective approach for the adoption. The new standard is effective for first interim periods within annual reporting periods beginning on or after 1 January 2018. The Group will adopt the new standard from 1 January 2018.

Management identified the following areas that are likely to be affected:

-- Accounting for under lifts and over lifts: IFRS 15 is applicable only if the counterparty to the contract is a customer. The standard defines a customer as a party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities. IFRS 15 makes a distinction between customers and partners or collaborators who share in the risks and benefits that result from the activity or process. If the over-lifter does not meet the definition of a customer or the transaction is a non-monetary exchange, then over lifts and under lifts will not be recognised as revenue from contracts with customers. If the Group were to adopt the new rules as at 1 January 2017, it estimates that revenue would have reduced by N5 billion (US$16 million) and other operating income would have increased by the same amount.

-- Accounting for consideration payable to the customer: The standard requires that an entity accounts for consideration payable to a customer as a reduction of the transaction price and, therefore, net of revenue unless the payment to the customer is in exchange for a distinct good or service that the customer transfers to the entity. The Group incurs barging costs in the course of the satisfaction of its performance obligations i.e. delivery of crude oil and gas. These costs do not transfer any distinct good or service to Seplat and as such represent consideration payable to customer and will be accounted for as a direct deduction from revenue. If the Group had adopted the new rules as at 1 January 2017, revenue would have reduced by an additional N5.5 billion (US$18 million) as a result of barging costs.

-- Presentation of contract assets and contract liabilities in the balance sheet - IFRS 15 requires separate presentation of contract assets and contract liabilities in the balance sheet. This will result in some reclassifications as of 1 January 2018 in relation to advances for future oil sales which are currently included in deferred revenue.

-- Other likely areas of impact are in relation to advances for future oil sales that may have a significant financing component and variable consideration arising from gas pricing based on an index as well as optional pricing on crude oil sold to customers.

   d.      IFRS 16 Leases 

IFRS 16 was issued in January 2016. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change.

The standard will affect primarily the accounting for the Group's operating leases. As at the reporting date, the Group has non-cancellable operating lease commitments of N119 million (US$ 0.39 million). However, the Group has not yet determined to what extent these commitments will result in the recognition of an asset and a liability for future payments and how this will affect the Group's profit and classification of cash flows.

Some of the commitments may be covered by the exception for short-term leases, while none of the leases will be covered by the exception for low value leases. Some commitments may relate to arrangements that will not qualify as leases under IFRS 16, principally because they are service contracts.

The standard is mandatory for first interim periods within annual reporting periods beginning on or after 1 January 2019. At this stage, the Group does not intend to adopt the standard before its effective date.

   3.3   Basis of consolidation 

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 30 June 2017.

This basis is the same adopted for the last audited financial statements as at 31 December 2016.

   3.4   Functional and presentation currency 

The Group's financial statements are presented in United States Dollars, which is also the Company's functional currency. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Notes to the interim condensed consolidated financial statements continued

   i)      Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other income or other expenses.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

   ii)      Group companies 

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

-- assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet

-- income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

   --      all resulting exchange differences are recognised in other comprehensive income. 

On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

   4.    Segment reporting 

Segment reporting has not been prepared as the Group operates one segment, being the exploration, development and production of oil and gas related products located in Nigeria. Operations in the different OMLs are integrated due to geographic proximity, the use of shared infrastructure and common operational management.

   5.    Significant accounting judgements, estimates and assumptions 
   5.1    Judgements 

Management's judgements at the end of the half year are consistent with those disclosed in the recent 2016 Annual financial statements. The following are some of the judgements which have the most significant effect on the amounts recognised in this consolidated financial statements.

   i)        OMLs 4, 38 and 41 

OMLs 4, 38, 41 are grouped together as a cash generating unit for the purpose of impairment testing. These three

OMLs are grouped together because they each do not independently generate cash flows. They currently operate as a single block sharing resources for the purpose of generating cash flows. Crude oil and gas sold to third parties from these OMLs are invoiced together.

   ii)       Advances on investment (note 18) 

The Group considers that the advances on investment of 20 million (2016: 20 million) in relation to the acquisition of additional assets is fully recoverable in accordance with the terms of the deposit.

Notes to the interim condensed consolidated financial statements continued

   5.2   Estimates and assumptions 

The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are disclosed in the most recent 2016 annual financial statements.

The following are some of the estimates and assumptions made.

   i)        Impairment of financial assets 

The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Management has made certain assumptions about the recoverability of financial assets exposed to credit risk from NPDC. These are based on management's past experiences with NPDC, current discussions with NPDC and financial capacity of NPDC. However, wherever these assumptions do not hold, it might have a significant impact on the Group's profit or loss in future.

   ii)       Defined benefit plans 

The cost of the defined benefit retirement plan and the present value of the retirement obligation are determined at the end of the financial year using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and changes in inflation rates. Service and interest costs are recognised at each reporting period based on an estimate of the periodic benefit expense for the financial year.

The defined benefit obligation recognised in this period has been based on the same assumptions as in the previous financial year The subsequent financial year end balance was estimated as at 31 December 2016 and has been recognised in this half year period on a pro rata basis. Therefore, no actuarial gains or losses have been recognised given that last year's assumptions have been adopted.

   iii)      Contingent consideration 

The fair value of the contingent consideration arrangement of N4 billion (US$12.9 million) was estimated calculating the present value of the future expected cash flows. The estimates are based on a discount rate of 15.45%. Refer to note 23 for further details.

   6.    Financial risk management 
   6.1    Financial risk factors 

The Group's activities expose it to a variety of financial risks such as market risk (including foreign exchange risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The Group's risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

Notes to the interim condensed consolidated financial statements continued

 
Risk          Exposure arising           Measurement            Management 
               from 
------------  -------------------------  ---------------------  -------------------- 
Market risk   Future commercial          Cash flow forecasting  Match and settle 
 - foreign     transactions               Sensitivity            foreign denominated 
 exchange      Recognised financial       analysis               cash inflows 
               assets and liabilities                            with foreign 
               not denominated                                   denominated cash 
               in US dollars.                                    outflows. 
------------  -------------------------  ---------------------  -------------------- 
Market risk   Long term borrowings       Sensitivity            None 
 - interest    at variable rate           analysis 
 rate 
------------  -------------------------  ---------------------  -------------------- 
Market risk   Future sales transactions  Sensitivity            Oil price hedges 
 - commodity                              analysis 
 prices 
------------  -------------------------  ---------------------  -------------------- 
Credit risk   Cash and cash              Aging analysis         Diversification 
               equivalents, trade         Credit ratings         of bank deposits. 
               receivables and 
               derivative financial 
               instruments. 
------------  -------------------------  ---------------------  -------------------- 
Liquidity     Borrowings and             Rolling cash           Availability 
 risk          other liabilities          flow forecasts         of committed 
                                                                 credit lines 
                                                                 and borrowing 
                                                                 facilities 
------------  -------------------------  ---------------------  -------------------- 
 

6.1.1 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group manages liquidity risk by ensuring that sufficient funds are available to meet its commitments as they fall due.

The Group uses both long-term and short-term cash flow projections to monitor funding requirements for activities and to ensure there are sufficient cash resources to meet operational needs. Cash flow projections take into consideration the Group's debt financing plans and covenant compliance. Surplus cash held is transferred to the treasury department which invests in interest bearing current accounts, time deposits and money market deposits.

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed maturity periods. The table has been drawn based on the undiscounted cash flows of the financial liabilities based on the earliest date on which the Group can be required to pay.

Notes to the interim condensed consolidated financial statements continued

 
                                        Variable rate   Less than 1 year     1 -2    2 - 3    3 - 5     After    Total 
                                                                            years    years    years   5 years 
=====================================  ==============  =================  =======  =======  =======  ========  ======= 
                                                    %                 'm       'm       'm       'm        'm       'm 
-------------------------------------  ==============  =================  =======  =======  =======  ========  ======= 
30 June 2017 
=====================================  ==============  =================  =======  =======  =======  ========  ======= 
Non - derivatives 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Variable interest rate borrowings 
(bank loans): 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Allan Gray                                 8.5%+LIBOR              1,324    1,631    1,500      929         -    5,384 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Zenith Bank Plc                            8.5%+LIBOR             18,141   22,352   20,554   12,734         -   73,781 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
First Bank of Nigeria                      8.5%+LIBOR             10,015   12,339   11,346    7,030         -   40,730 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
United Bank of Africa Plc                  8.5%+LIBOR             11,338   13,970   12,846    7,959         -   46,113 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Stanbic IBTC Bank Plc                      8.5%+LIBOR              1,699    2,094    1,925    1,193         -    6,911 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
The Standard Bank of South Africa 
 Limited                                   8.5%+LIBOR              1,699    2,094    1,925    1,193         -    6,911 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Standard Chartered Bank                    6.0%+LIBOR              4,545    2,826        -        -         -    7,371 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Natixis                                    6.0%+LIBOR              4,545    2,826        -        -         -    7,371 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Citibank Nigeria Limited and Citibank 
 N.A.                                      6.0%+LIBOR              3,535    2,198        -        -         -    5,733 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
First Rand Bank (Merchant Bank 
 Division)                                 6.0%+LIBOR              3,030    1,884        -        -         -    4,914 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Nomura International Plc.                  6.0%+LIBOR              3,030    1,884        -        -         -    4,914 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Ned Bank Ltd London Branch                 6.0%+LIBOR              3,030    1,884        -        -         -    4,914 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
The Mauritius Commercial Bank Plc          6.0%+LIBOR              3,030    1,884        -        -         -    4,914 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Stanbic IBTC Bank Plc                      6.0%+LIBOR              2,272    1,413        -        -         -    3,685 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
The Standard Bank of South Africa 
 Limited                                   6.0%+LIBOR              3,283    2,041        -        -         -    5,324 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Other non-derivatives 
-------------------------------------  --------------  -----------------  -------  -------  -------  --------  ------- 
Trade and other payables                                          47,677        -        -        -         -   47,677 
-----------------------------------------------------  -----------------  -------  -------  -------  --------  ------- 
Contingent consideration                                               -        -    5,643        -         -    5,643 
=====================================================  =================  =======  =======  =======  ========  ======= 
                                                                 122,193   73,320   55,739   31,038         -  282,290 
 ====================================================  =================  =======  =======  =======  ========  ======= 
 

Notes to the interim condensed consolidated financial statements continued

 
 
                            Variable      Less      1 -      2 -      3 -     After     Total 
                                rate      than        2        3        5   5 years 
                                        1 year     year    years    years 
-------------------------  =========  ========  =======  =======  =======  ========  ======== 
                                   %        'm       'm       'm       'm        'm        'm 
-------------------------  =========  ========  =======  =======  =======  ========  ======== 
31 December 2016 
=========================  ---------  --------  -------  -------  -------  --------  -------- 
Non - derivatives 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Variable interest 
 rate borrowings 
 (bank loans): 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
                                8.5% 
Zenith Bank Plc              + LIBOR    11,409   23,182   21,383   22,715         -    78,689 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
First Bank of Nigeria           8.5% 
 Limited                     + LIBOR     7,131   14,489   13,364   14,197         -    49,181 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
United Bank for                 8.5% 
 Africa Plc                  + LIBOR     7,131   14,489   13,364   14,197         -    49,181 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Stanbic IBTC Bank               8.5% 
 Plc                         + LIBOR     1,069    2,171    2,003    2,128         -     7,371 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
The Standard Bank 
 of South Africa                8.5% 
 Limited                     + LIBOR     1,069    2,171    2,003    2,128         -     7,371 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Standard Chartered              8.5% 
 Bank                        + LIBOR     8,452        -        -        -         -     8,452 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
                               6.00% 
Natixis                      + LIBOR     8,452        -        -        -         -     8,452 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Citibank Nigeria 
 Ltd and Citibank              6.00% 
 NA                          + LIBOR     8,452        -        -        -         -     8,452 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Bank of America 
 Merrill Lynch Int'l           6.00% 
 Ltd                         + LIBOR     5,635        -        -        -         -     5,635 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
FirstRand Bank Ltd 
 (Rand Merchant Bank           6.00% 
 Division)                   + LIBOR     5,635        -        -        -         -     5,635 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
JP Morgan Chase 
 Bank NA, London               6.00% 
 Branch                      + LIBOR     5,635        -        -        -         -     5,635 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
NedBank Ltd, London            6.00% 
 Branch                      + LIBOR     5,635        -        -        -         -     5,635 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Stanbic IBTC Bank              6.00% 
 Plc                         + LIBOR     4,225        -        -        -         -     4,225 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
The Standard Bank 
 of South Africa               6.00% 
 Ltd                         + LIBOR     4,225        -        -        -         -     4,225 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Other non - derivatives 
-------------------------  ---------  --------  -------  -------  -------  --------  -------- 
Trade and other 
 payables                               49,341        -        -        -         -    49,341 
------------------------------------  --------  -------  -------  -------  --------  -------- 
Contingent consideration                     -        -        -    5,643         -     5,643 
------------------------------------  --------  -------  -------  -------  --------  -------- 
                                       133,496   56,502   52,117   61,008         -   303,123 
 ===================================  ========  =======  =======  =======  ========  ======== 
 
   6.2   Fair value measurements 

Financial instruments measured at fair value were based on the same assumptions as determined in the 31 December 2016 financial statements. The judgements and estimates made by the Group in determining the fair values of the financial instruments have remained the same since the last annual financial report. There were no transfers of financial instruments between fair value hierarchy levels during this half year.

   7.    Revenue 
 
                         Half year ended  Half year ended  3 months ended  3 months ended 
                            30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                         ---------------  ---------------  --------------  -------------- 
                                      'm               'm              'm              'm 
=======================  ===============  ===============  ==============  ============== 
Crude oil sales                   34,007           14,503          24,793           7,247 
-----------------------  ---------------  ---------------  --------------  -------------- 
(Over lift)/under lift          (10,317)            7,481         (7,909)           3,585 
=======================  ===============  ===============  ==============  ============== 
                                  23,690           21,984          16,884          10,832 
-----------------------  ---------------  ---------------  --------------  -------------- 
Gas sales                         16,627            9,592           8,959           4,159 
=======================  ===============  ===============  ==============  ============== 
Revenue                           40,317           31,576          25,843          14,991 
=======================  ===============  ===============  ==============  ============== 
 

The major off-taker for crude oil is Mercuria. The major off-taker for gas is the Nigerian Gas Company.

In the prior period to 30 June 2016, realised fair value losses on crude oil hedges of N2,271 million were included in Revenue. This is now classified under Fair Value Loss (note 11).

Notes to the interim condensed consolidated financial statements continued

   8.    Cost of sales 
 
                                               Half year ended  Half year ended    3 months ended  3 months ended 
                                                  30 June 2017     30 June 2016      30 June 2017    30 June 2016 
                                           -------------------  ---------------  ----------------  -------------- 
                                                            'm               'm                'm              'm 
=========================================  ===================  ===============  ================  ============== 
Crude handling fees                                      1,531            2,134             1,363             209 
-----------------------------------------  -------------------  ---------------  ----------------  -------------- 
Barging cost                                             1,995                -             1,340               - 
-----------------------------------------  -------------------  ---------------  ----------------  -------------- 
Royalties                                                5,736            2,693             4,223             942 
-----------------------------------------  -------------------  ---------------  ----------------  -------------- 
Depletion, depreciation and amortisation                 8,861            5,768             5,387           2,003 
-----------------------------------------  -------------------  ---------------  ----------------  -------------- 
Niger Delta Development Commission levy                    729              591               379             213 
-----------------------------------------  -------------------  ---------------  ----------------  -------------- 
Rig related expenses                                       499              370               193             162 
-----------------------------------------  -------------------  ---------------  ----------------  -------------- 
Operations & maintenance expenses                        4,563            5,298             2,405           2,633 
=========================================  ===================  ===============  ================  ============== 
Cost of sales                                           23,914           16,854            15,290           6,162 
=========================================  ===================  ===============  ================  ============== 
 
   9.    General and administrative expenses 
 
                                            Half year ended  Half year ended     3 months ended  3 months ended 
                                               30 June 2017     30 June 2016       30 June 2017    30 June 2016 
                                       --------------------  ---------------  -----------------  -------------- 
                                                         'm               'm                 'm              'm 
=====================================  ====================  ===============  =================  ============== 
Depreciation                                            722              560                380             299 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Employee benefits                                     3,296            2,154              1,509             919 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Professional and consulting fees                      3,449            2,279              2,088           1,156 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Auditor's remuneration                                   94               13                 48               - 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Directors emoluments (executive)                        423              328                245              88 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Directors emoluments (non-executive)                    476              491                246             309 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Rentals                                                 224              206                151              89 
-------------------------------------  --------------------  ---------------  -----------------  -------------- 
Other general expenses                                2,424            4,302              1,312           3,209 
=====================================  ====================  ===============  =================  ============== 
General and administrative expenses                  11,108           10,333              5,979           6,069 
=====================================  ====================  ===============  =================  ============== 
 

Directors' emoluments have been split between executive and non-executive directors. There were no non-audit services rendered by the Group's auditors during the period. Other general expenses relate to costs such as office maintenance costs, telecommunication costs, logistics costs and others. Share based payment expenses are included in the employee benefits expense.

10. Loss on foreign exchange - net

 
                Half year ended  Half year ended  3 months ended  3 months ended 
                   30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                ---------------  ---------------  --------------  -------------- 
                             'm               'm              'm              'm 
==============  ===============  ===============  ==============  ============== 
Exchange loss             (264)          (6,382)           (793)         (5,897) 
==============  ===============  ===============  ==============  ============== 
 

This is principally as a result of translation of naira denominated monetary assets and liabilities.

Notes to the interim condensed consolidated financial statements continued

11. Fair value loss

 
                                                      Half year ended  Half year ended  3 months ended  3 months ended 
                                                         30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                                 --------------------  ---------------  --------------  -------------- 
                                                                   'm               'm              'm              'm 
===============================================  ====================  ===============  ==============  ============== 
Realised fair value losses on crude oil hedges                (3,006)          (2,271)         (1,478)         (2,271) 
-----------------------------------------------  --------------------  ---------------  --------------  -------------- 
Unrealised fair value losses on crude oil 
 hedges                                                             -          (4,792)               -         (4,792) 
-----------------------------------------------  --------------------  ---------------  --------------  -------------- 
Fair value loss on contingent consideration                     (274)            (510)           (140)           (351) 
-----------------------------------------------  ====================  ===============  ==============  ============== 
Fair value gain on other assets                                   463                -             463               - 
===============================================  ====================  ===============  ==============  ============== 
Fair value loss                                               (2,817)          (7,573)         (1,155)         (7,414) 
===============================================  ====================  ===============  ==============  ============== 
 

Realised fair value losses on crude oil hedges represent the payments for crude oil price options, while unrealised fair value losses represent losses on crude oil price hedges charged to profit or loss. Fair value loss on contingent consideration arises in relation to remeasurement of contingent consideration on the Group's acquisition of participating interest in its OML 53. The contingency criteria are the achievement of certain production milestones. Fair value gain on other assets arises from the fair value remeasurement of the Group's rights to receive the discharge sum of N94 billion (US$308 million).

In the prior period to 30 June 2016, realised fair value loss on crude oil hedges of N2,271 million were included Revenue (note 7). This is now classified under Fair Value Loss.

12. Finance income/ (costs)

 
                                            Half year ended  Half year ended     3 months ended         3 months ended 
                                               30 June 2017     30 June 2016       30 June 2017           30 June 2016 
                                       --------------------  ---------------  -----------------  --------------------- 
                                                         'm               'm                 'm                     'm 
=====================================  ====================  ===============  =================  ===================== 
Finance income 
-------------------------------------  --------------------  ---------------  -----------------  --------------------- 
Interest income                                         270            5,694                206                  5,270 
-------------------------------------  --------------------  ---------------  -----------------  --------------------- 
Finance costs 
-------------------------------------  --------------------  ---------------  -----------------  --------------------- 
Interest on bank loan and other bank 
 charges                                             10,560            8,298              5,310                  3,933 
-------------------------------------  --------------------  ---------------  -----------------  --------------------- 
Unwinding of discount on provision 
 for decommissioning                                     14               23                  7 
=====================================  ====================  ===============  =================  ===================== 
                                                     10,574            8,321              5,317                  3,933 
=====================================  ====================  ===============  =================  ===================== 
Finance (cost)/ income - net                       (10,304)          (2,627)            (5,111)                  1,337 
=====================================  ====================  ===============  =================  ===================== 
 

13. Taxation

Income tax expense is recognised based on management's estimate of the weighted average effective annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the period to 30 June 2017 is 65.75% for crude oil activities and 30% for gas activities. As at 31st December 2016, the tax rates were 65.75% and 30% for crude oil and gas activities respectively.

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred income tax assets of N72 billion (2016: N58 billion) in respect of temporary differences amounting to N109 billion (2016: N89 billion). Out of this, deferred tax asset of N22 billion (2016: N14 billion) relates to tax losses of N33 billion (2016: N22 billion). There are no expiration dates for the tax losses.

Notes to the interim condensed consolidated financial statements continued

14. Loss per share (LPS)

Basic

Basic LPS is calculated on the Group's loss after taxation attributable to the parent entity and on the basis of the weighted average of issued and fully paid ordinary shares at the end of the period.

Diluted

Diluted LPS is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares (arising from outstanding share awards in the share based payment scheme) into ordinary shares.

 
                                                      Half year ended  Half year ended  3 months ended  3 months ended 
                                                         30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                                      ---------------  ---------------  --------------  -------------- 
                                                                   'm               'm              'm              'm 
====================================================  ===============  ===============  ==============  ============== 
 
Loss for the period attributable to equity holders 
 of the parent                                                (8,432)         (13,081)         (2,577)         (9,340) 
====================================================  ===============  ===============  ==============  ============== 
                                                                Share            Share           Share           Share 
                                                                 '000             '000            '000            '000 
====================================================  ===============  ===============  ==============  ============== 
Weighted average number of ordinary shares in issue           563,445          560,576         563,445         560,576 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Share awards                                                    4,943            2,223           4,943           2,223 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Weighted average number of ordinary shares adjusted 
 for the effect of dilution                                   568,388          562,799         568,388         562,799 
====================================================  ===============  ===============  ==============  ============== 
                                                                    N                N               N               N 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Basic loss per share                                          (14.97)          (23.33)          (4.57)         (16.66) 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Diluted loss per share                                        (14.83)          (23.24)          (4.53)         (16.60) 
====================================================  ===============  ===============  ==============  ============== 
                                                                   'm               'm              'm              'm 
====================================================  ===============  ===============  ==============  ============== 
Loss attributable to equity holders of the parent             (8,432)         (13,081)         (2,577)         (9,340) 
====================================================  ===============  ===============  ==============  ============== 
Loss used in determining diluted loss per share               (8,432)         (13,081)         (2,577)         (9,340) 
====================================================  ===============  ===============  ==============  ============== 
 

15. Dividend

 
                                  Half year ended  Half year ended 
                                     30 June 2017     30 June 2016 
                                  ---------------  --------------- 
                                               'm               'm 
================================  ===============  =============== 
Dividend paid during the period                 -            5,118 
================================  ===============  =============== 
 
Dividend per share ($)                          -             9.13 
================================  ===============  =============== 
 

16. Interest bearing loans & borrowings

Below is the net debt reconciliation on interest bearing loans and borrowings.

 
                                           Borrowings 
                                           due within       Borrowings due 
                                               1 year         above 1 year             Total 
                                                   'm                   'm                'm 
=============================  ======================  ===================  ================ 
Balance as at 1 January 
 2017                                          66,489              136,060           202,549 
Effective interest                                  -               11,169            11,169 
-----------------------------  ----------------------  -------------------  ---------------- 
Effect of loan restructuring                  (8,808)                8,808                 - 
-----------------------------  ----------------------  -------------------  ---------------- 
Repayment                                           -             (23,253)          (23,253) 
-----------------------------  ----------------------  -------------------  ---------------- 
Exchange differences                              186                  379               565 
=============================  ======================  ===================  ================ 
Balance as at 30 
 June 2017                                     57,867              133,163           191,030 
=============================  ======================  ===================  ================ 
 

Notes to the interim condensed consolidated financial statements continued

17. Other asset

 
                                             As at 30 June 2017 
                                             ------------------ 
                                                             'm 
===========================================  ================== 
Initial fair value of investment in OML 55               76,277 
-------------------------------------------  ------------------ 
Receipts from crude oil lifted                          (6,914) 
-------------------------------------------  ------------------ 
Fair value adjustment as at 30 June 2017                    463 
-------------------------------------------  ------------------ 
Exchange differences                                        214 
===========================================  ================== 
Fair value as at 30 June 2017                            70,040 
===========================================  ================== 
 

Other asset represents the Group's rights to receive the discharge sum of N94 billion (2016: N100 billion) from the crude oil reserves of OML 55.The asset has been measured at fair value through profit or loss (FVTPL) and receipts from crude oil lifted reduce the value of the asset. At each reporting date, the fair value of the discharge sum is determined using the income approach in line with IFRS 13: Fair Value Measurement. As at 30 June 2017, the fair value of the discharge sum is N70 billion (2016: N76 billion)

18. Trade and other receivables

 
                                         As at 30 June 2017             As at 31 Dec 2016 
 ----------------------------------------------------------  ---------------------------- 
                                                         'm                            'm 
 ==========================================================  ============================ 
Trade receivables                                                        41,100    22,395 
-----------------------------------------------------------  ------------------  -------- 
Nigerian Petroleum Development Company (NPDC) receivables                68,790    72,049 
-----------------------------------------------------------  ------------------  -------- 
National Petroleum Investment Management Services                         1,835     2,511 
-----------------------------------------------------------  ------------------  -------- 
Advances on investment                                                   20,096    20,040 
-----------------------------------------------------------  ------------------  -------- 
Under lift                                                                  748     1,372 
-----------------------------------------------------------  ------------------  -------- 
Advances to suppliers                                                     2,298     2,720 
-----------------------------------------------------------  ------------------  -------- 
Other receivables                                                           791       346 
-----------------------------------------------------------  ------------------  -------- 
                                                                              -         - 
===========================================================  ==================  ======== 
Impairment loss on NPDC receivables                                     (3,138)   (2,273) 
===========================================================  ==================  ======== 
 
                                                                        132,520   119,160 
===========================================================  ==================  ======== 
 
 

18a. Trade receivables:

Included in trade receivables is an amount due from NGC of N27 billion (2016: N20 billion) with respect to the sale of gas.

18b. NPDC receivables:

NPDC receivables represent the outstanding cash calls due to Seplat from its JV partner, Nigerian Petroleum Development Company. The receivables have been discounted to reflect the impact of time value of money, and an impairment loss has been recognized in the financial statements. As at 30 June 2017, the undiscounted value of this receivable is N69 billion (2016: N72 billion).

18c. Advances on investment:

This comprises an advance of N13.8 billion (2016: N13.8 billion) on a potential investment in OML 25 and N6 billion (2016: N6 billion) currently held in an escrow account. Proceedings commenced against Newton Energy Limited, a wholly owned subsidiary of Seplat Plc by Crestar Natural Resources relating to the N6 billion (2016: N6 billion) currently held in an escrow account. The escrow monies relate to the potential acquisition of OML 25 by Crestar which Newton Energy has an option to invest into. These monies were placed in escrow in July 2015 pursuant to an agreement reached with Crestar and the vendor on final terms of the transaction.

Notes to the interim condensed consolidated financial statements continued

19. Share capital

19a. Authorised and issued share capital

 
                                                                                 As at 30 June 2017  As at 31 Dec 2016 
                                                                                 ------------------  ----------------- 
                                                                                                 'm                 'm 
===============================================================================  ==================  ================= 
Authorised ordinary share capital 
-------------------------------------------------------------------------------  ------------------  ----------------- 
 
1,000,000,000 ordinary shares denominated in Naira of 50 kobo per share                         500                500 
===============================================================================  ==================  ================= 
 
Issued and fully paid 
-------------------------------------------------------------------------------  ------------------  ----------------- 
 
563,444,561 (2016: 563,444,561) issued shares denominated in Naira of 50 kobo 
 per share                                                                                      283                283 
===============================================================================  ==================  ================= 
 

19b. Employee share based payment scheme

As at 30 June 2017, the Group had awarded shares of 25,726,262 (2016: 25,448,071 shares) to certain employees and senior executives in line with its share based incentive scheme. During the half year ended 30 June 2017 no shares were vested (31 December 2016: 2,868,460 shares had vested, resulting in an increase in number of issued and fully paid ordinary shares of 50k each from 561 million to 563 million).

20. Trade and other payables

 
                              As at 30 June 2017    As at 31 Dec 2016 
                              ------------------  ------------------- 
                                              'm                   'm 
============================  ==================  =================== 
Trade payables                            32,073             32,983 
----------------------------  ------------------  ----------------- 
Accruals and other payables               27,136             25,574 
----------------------------  ------------------  ----------------- 
NDDC levy                                  1,574                  6 
----------------------------  ------------------  ----------------- 
Deferred revenue                          37,213             10,727 
----------------------------  ------------------  ----------------- 
Royalties                                 11,118             10,476 
============================  ==================  ================= 
                                         109,114             79,766 
============================  ==================  ================= 
 

Included in accruals and other payables are field-related accruals N11 billion (2016: N10.7 billion) and other vendor payables of N16.2 billion (2016: N14.6 billion). Deferred revenue includes advance payments for crude oil sales of N37 billion (2016: N10 billion) and royalties include accruals in respect of gas sales for which payment is outstanding at the end of the period.

Notes to the interim condensed consolidated financial statements continued

21. Computation of cash generated from operations

 
                                                                             Half year ended           Half year ended 
                                                                                30 June 2017              30 June 2016 
                                                                 ---------------------------  ------------------------ 
                                                                                          'm                        'm 
===============================================================  ===========================  ======================== 
Loss before tax                                                                      (8,090)                  (12,193) 
===============================================================  ===========================  ======================== 
Adjusted for: 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Depletion, depreciation and amortisation                                               9,583                     6,328 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Interest on bank loan and other bank charges                                          10,560                     8,298 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Unwinding of discount on provision for decommissioning                                    14                        23 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Interest income                                                                        (270)                   (5,694) 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Fair value loss on contingent consideration                                              274                       510 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Unrealised fair value loss on crude oil hedges                                             -                     4,792 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Fair value gain on other asset                                                         (463)                         - 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Unrealised foreign exchange loss                                                         264                     6,382 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Share based payments expenses                                                            818                       375 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Defined benefit expenses                                                                 341                     (185) 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Loss on disposal of other property, plant and equipment                                   25                         - 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Changes in working capital (excluding the effects of exchange 
differences): 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Trade and other receivables, including prepayments                                   (8,133)                    14,820 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Trade and other payables                                                              26,313                  (10,423) 
---------------------------------------------------------------  ---------------------------  ------------------------ 
Inventories                                                                            1,256                   (4,746) 
===============================================================  ===========================  ======================== 
Net cash from operating activities                                                    32,492                     8,287 
===============================================================  ===========================  ======================== 
 

22. Related party relationships and transactions

The Group is controlled by Seplat Petroleum Development Company Plc (the 'parent Company'). As at 30 June 2017, the parent Company is owned 8.39% either directly or by entities controlled by A.B.C. Orjiako ('SPDCL BVI') and members of his family and 13.15% either directly or by entities controlled by Austin Avuru ('Professional Support Limited' and 'Platform Petroleum Limited'). The remaining shares in the parent company are widely held.

22a. Related party relationships

The services provided by the related parties:

Abbeycourt Trading Company Limited: The Chairman of Seplat is a director and shareholder. The company provides diesel supplies to Seplat in respect of Seplat's rig operations.

Berwick Nigeria Limited: The Chairman of Seplat is a shareholder and director. The company provides construction services to Seplat in relation to a field base station in Sapele.

Cardinal Drilling Services Limited (formerly Caroil Drilling Nigeria Limited): Is owned by common shareholders with the parent Company. The company provides drilling rigs and drilling services to Seplat.

Charismond Nigeria Limited: The sister to the CEO works as a General Manager. The company provides administrative services including stationary and other general supplies to the field locations.

Helko Nigeria Limited: The Chairman of Seplat is shareholder and director. The company owns the lease to Seplat's main office at 25A Lugard Avenue, Lagos, Nigeria.

Keco Nigeria Enterprises: The Chief Executive Officer's sister is shareholder and director. The company provides diesel supplies to Seplat in respect of its rig operations.

Montego Upstream Services Limited: The Chairman's nephew is shareholder and director. The company provides drilling and engineering services to Seplat.

Nabila Resources & Investment Ltd: The Chairman's in-law is a shareholder and director. The company provides lubricant to Seplat.

Ndosumili Ventures Limited: Is a subsidiary of Platform Petroleum Limited. The company provides transportation services to Seplat.

Nerine Support Services Limited: Is owned by common shareholders with the parent Company. Seplat leases a warehouse from Nerine and the company provides agency and contract workers to Seplat.

Oriental Catering Services Limited: The Chief Executive Officer of Seplat's spouse is shareholder and director. The company provides catering services to Seplat at the staff canteen.

ResourcePro Inter Solutions Limited: The Chief Executive Officer of Seplat's in-law is its UK representative. The company supplies furniture to Seplat.

Shebah Petroleum Development Company Limited (BVI): The Chairman of Seplat is a director and shareholder of SPDCL (BVI). SPDCL (BVI) provided consulting services to Seplat.

The following transactions were carried by Seplat with related parties:

22b. Related party relationships

 
i) Purchases of goods and services                 Half year ended  Half year ended 
                                                      30 June 2017     30 June 2016 
                                                   ---------------  --------------- 
                                                                'm               'm 
=================================================  ===============  =============== 
Shareholders of the parent company 
-------------------------------------------------  ---------------  --------------- 
M&P (MPI SA)                                                     -                8 
-------------------------------------------------  ---------------  --------------- 
SPDCL (BVI)                                                    172              115 
=================================================  ===============  =============== 
                                                               172              123 
=================================================  ===============  =============== 
Entities controlled by key management personnel: 
-------------------------------------------------  ---------------  --------------- 
Contracts > $1million in 2017 
-------------------------------------------------  ---------------  --------------- 
Nerine Support Services Limited                                826            1,238 
=================================================  ===============  =============== 
                                                               826            1,238 
=================================================  ===============  =============== 
 
Contracts < $1million in 2017 
-------------------------------------------------  ---------------  --------------- 
Abbey Court trading Company Limited                            107               36 
-------------------------------------------------  ---------------  --------------- 
Charismond Nigeria Limited                                      10                4 
-------------------------------------------------  ---------------  --------------- 
Cardinal Drilling Services Limited                             190            1,122 
-------------------------------------------------  ---------------  --------------- 
Keco Nigeria Enterprises                                        22                5 
-------------------------------------------------  ---------------  --------------- 
Ndosumili Ventures Limited                                     170              206 
-------------------------------------------------  ---------------  --------------- 
Oriental Catering Services Limited                              65               57 
-------------------------------------------------  ---------------  --------------- 
ResourcePro Inter Solutions Limited                              -               15 
-------------------------------------------------  ---------------  --------------- 
Berwick Nigeria Limited                                          -                6 
-------------------------------------------------  ---------------  --------------- 
Montego Upstream Services Limited                                -            2,331 
-------------------------------------------------  ---------------  --------------- 
Nabila Resources & Investment Limited                            -                1 
-------------------------------------------------  ---------------  --------------- 
Helko Nigeria Limited                                                            82 
=================================================  ===============  =============== 
                                                               564            3,865 
=================================================  ===============  =============== 
Total                                                        1,390            5,103 
=================================================  ===============  =============== 
 
 

* Nerine charges an average mark-up of 7.5% on agency and contract workers assigned to Seplat. The amounts shown above are gross i.e. it includes salaries and Nerine's mark-up. Total costs for agency and contracts during the half year ended 30 June 2017 is N795 million.

Notes to the interim condensed consolidated financial statements continued

22c. Balances

The following balances were receivable from or payable to related parties as at 30 June 2017:

 
i) Prepayments / receivables                      As at 30 June 2017  As at 31 Dec 2016 
                                                  ------------------  ----------------- 
                                                                  'm                 'm 
================================================  ==================  ================= 
Entities controlled by key management personnel 
------------------------------------------------  ------------------  ----------------- 
Cardinal Drilling Services Limited                             1,896              1,894 
================================================  ==================  ================= 
                                                               1,896              1,894 
================================================  ==================  ================= 
 
 
ii) Payables                                         As at 30 June 2017  As at 31 Dec 2016 
                                                  ---------------------  ----------------- 
                                                                     'm                 'm 
================================================  =====================  ================= 
Entities controlled by key management personnel 
------------------------------------------------  ---------------------  ----------------- 
Cardinal Drilling Services Limited                                  190                308 
------------------------------------------------  ---------------------  ----------------- 
Abbey Court Petroleum Company Limited                                89                  - 
------------------------------------------------  ---------------------  ----------------- 
Charismond Nigeria Limited                                            6                  - 
------------------------------------------------  ---------------------  ----------------- 
Ndosumili Ventures Limited                                          140                  - 
------------------------------------------------  ---------------------  ----------------- 
ResourcePro Inter Solutions Limited                                   -                  - 
------------------------------------------------  ---------------------  ----------------- 
Nerine Support Services Limited                                     800              3,480 
------------------------------------------------  ---------------------  ----------------- 
Montego Upstream Services Limited                                     -              3,520 
------------------------------------------------  ---------------------  ----------------- 
                                                                  1,225              7,308 
================================================  =====================  ================= 
 

23. Commitments and contingencies

23a. Operating lease commitments - Group as lessee

The Group leases drilling rigs, buildings, land, boats and storage facilities. The lease terms are between 1 and 5 years. The operating lease commitments of the Group as at 30 June 2017 are:

 
Operating lease commitments                             As at 30 June 2017  As at 31 Dec 2016 
                                                        ------------------  ----------------- 
                                                                        'm                 'm 
======================================================  ==================  ================= 
    Not later than one year                                             36                 36 
------------------------------------------------------  ------------------  ----------------- 
    Later than one year and not later than five years                   83                 83 
======================================================  ==================  ================= 
                                                                       119                119 
======================================================  ==================  ================= 
 

23b. Contingent consideration

As part of the purchase agreement of OML 53, a portion of the consideration is contingent on the performance of the producing asset. There will be additional cash payments to the previous owners should the oil price rise above US$90/bbl in the three year period following the acquisition date.

Significant unobservable valuation inputs are shown below:

   Discount rate        15.45% 

A significant increase or decrease in the discount rate would result in a lower/ (higher) fair value of the liability.

The fair value of the contingent consideration determined at 31 December 2016 reflects the current and projected crude oil prices, amongst other factors and a fair value adjustment has been recognised in profit or loss.

A reconciliation of the fair value of the contingent consideration liability is provided below:

 
                                                                                                As at 30 June 2017 
                                                                                                ------------------ 
                                                                                                                'm 
==============================================================================================  ================== 
Initial fair value of the contingent consideration at acquisition date                                       2,073 
----------------------------------------------------------------------------------------------  ------------------ 
Unrealised fair value changes recognised in profit or loss during year ended 31 December 2016                  411 
----------------------------------------------------------------------------------------------  ------------------ 
Exchange difference                                                                                          1,188 
==============================================================================================  ================== 
Financial liability for the contingent consideration as at 31 December 2016                                  3,672 
==============================================================================================  ================== 
Fair value adjustment as at 30 June 2017                                                                       274 
----------------------------------------------------------------------------------------------  ------------------ 
Exchange difference                                                                                             11 
==============================================================================================  ================== 
Contingent consideration as at 30 June 2017                                                                  3,957 
==============================================================================================  ================== 
 

23c. Contingent liabilities

The Group is involved in a number of legal suits as defendant. The estimated value of the contingent liabilities for the period ended 30 June 2017 is N53 billion (2016: N4.7 billion). No provision has been made for this potential liability in these financial statements. Management and the Group's solicitors are of the opinion that the Group will suffer no loss from these claims.

24. Events after the reporting period

There was no significant event after the reporting date which could have a material effect on the state of affairs of the Group as at 30 June 2017 and on the profit or loss for the half year ended on that date, which have not been adequately provided for or disclosed in these financial statements.

25. Compliance with FRC Rule 1

In compliance with the regulatory requirement in Nigeria that the CFO, who signs the Annual Report and Accounts, must be a member of a professional accountancy body recognised by an Act of the National Assembly in Nigeria, the CFO of Seplat, Roger Brown, has been granted a waiver by the Financial Reporting Council of Nigeria to sign the accounts of the Group.

26. Reclassification

Certain comparative figures have been reclassified in line with the current year's presentation.

27. Exchange rates used in translating the accounts to Naira

The table below shows the exchange rates used in translating the accounts into Naira.

 
                                               Basis   30 June 2017 /$  30 June 2016 /$    31 December 2016 /$ 
=============================  =====================  ================  ===============  ===================== 
Fixed assets - opening                Historical rate       Historical       Historical           Historical 
balances 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
Fixed assets - additions                 Average rate           305.86              199                  308 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
Fixed assets - closing 
 balances                                Closing rate           305.85              283                  305 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
Current assets                           Closing rate           305.85              283                  305 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
Current liabilities                      Closing rate           305.85              283                  305 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
Equity                                Historical rate       Historical       Historical           Historical 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
Income and Expenses:             Overall Average rate           305.86              213                  255 
----------------------------  -----------------------  ---------------  ---------------  ------------------- 
 
 

Interim condensed consolidated statement of profit or loss and other comprehensive income

for the half year ended 30 June 2017

 
                                                   Half year ended     Half year ended  3 months ended  3 months ended 
                                                      30 June 2017        30 June 2016    30 June 2017    30 June 2016 
                                                   ---------------  ------------------  --------------  -------------- 
                                                         Unaudited           Unaudited       Unaudited       Unaudited 
                                                   ---------------  ------------------  --------------  -------------- 
                                             Note            $'000               $'000           $'000           $'000 
===========================================  ====  ===============  ==================  ==============  ============== 
Revenue                                         7          131,814             153,022          84,515          69,606 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Cost of sales                                   8         (78,187)            (83,742)        (50,003)        (29,962) 
===========================================  ====  ===============  ==================  ==============  ============== 
Gross profit                                                53,627              69,280          34,512          39,644 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
General and administrative expenses             9         (36,315)            (49,592)        (19,556)        (28,143) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Loss on foreign exchange - net                 10            (866)            (28,330)         (2,596)        (25,889) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Fair value loss                                11          (9,210)            (33,345)         (3,777)        (32,544) 
===========================================  ====  ===============  ==================  ==============  ============== 
Operating profit/(loss)                                      7,236            (41,987)           8,583        (46,932) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Finance income                                 12              883              25,886             673          23,655 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Finance costs                                  12         (34,573)            (41,432)        (17,392)        (19,262) 
===========================================  ====  ===============  ==================  ==============  ============== 
Loss before taxation                                      (26,454)            (57,533)         (8,136)        (42,539) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Taxation                                       13          (1,119)             (3,632)           (300)           3,918 
===========================================  ====  ===============  ==================  ==============  ============== 
Loss for the period                                       (27,573)            (61,165)         (8,436)        (38,621) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
                                                                                                                     - 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Loss attributable to equity holders of 
 parent                                                   (27,573)            (62,506)         (8,436)        (43,677) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Profit attributable to non-controlling 
 interest                                                        -               1,341               -           5,056 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
                                                                                                                     - 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Other comprehensive income/(loss): 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Items that may be reclassified to profit or                                          -                               - 
loss:                                                            - 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Foreign currency translation difference                          -                   -               -               - 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
 
Total comprehensive loss for the period                   (27,573)            (61,165)         (8,436)        (38,621) 
===========================================  ====  ===============  ==================  ==============  ============== 
                                                                 -                                                   - 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Loss attributable to equity holders of 
 parent                                                   (27,573)            (62,506)         (8,436)        (43,677) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Profit attributable to non-controlling 
 interest                                                        -               1,341               -           5,056 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
 
Loss per share ($)                             14           (0.05)              (0.11)          (0.01)          (0.08) 
-------------------------------------------  ----  ---------------  ------------------  --------------  -------------- 
Diluted loss per share($)                      14           (0.05)              (0.11)          (0.01)          (0.08) 
===========================================  ====  ===============  ==================  ==============  ============== 
 

Interim condensed consolidated statement of financial position

As at 30 June 2017

 
                                                   As at 30 June 2017  As at 31 Dec 2016 
                                                   ------------------  ----------------- 
                                                            Unaudited            Audited 
                                                   ------------------  ----------------- 
                                             Note               $'000              $'000 
===========================================  ====  ==================  ================= 
Assets 
-------------------------------------------  ----  ------------------  ----------------- 
Non-current assets 
-------------------------------------------  ----  ------------------  ----------------- 
Oil and gas properties                                      1,206,623          1,224,400 
-------------------------------------------  ----  ------------------  ----------------- 
Other property, plant and equipment                             5,914              7,967 
-------------------------------------------  ----  ------------------  ----------------- 
Other asset                                   17              229,000            250,090 
-------------------------------------------  ----  ------------------  ----------------- 
Prepayments                                                    31,624             33,616 
-------------------------------------------  ----  ------------------  ----------------- 
Total non-current assets                                    1,473,161          1,516,073 
===========================================  ====  ==================  ================= 
Current assets 
-------------------------------------------  ----  ------------------  ----------------- 
Inventories                                                   102,106            106,213 
-------------------------------------------  ----  ------------------  ----------------- 
Trade and other receivables                   18              433,282            390,694 
-------------------------------------------  ----  ------------------  ----------------- 
Prepayments                                                     3,215              6,672 
-------------------------------------------  ----  ------------------  ----------------- 
Cash & cash equivalents                                       201,506            159,621 
===========================================  ====  ==================  ================= 
Total current assets                                          740,109            663,200 
===========================================  ====  ==================  ================= 
Total assets                                                2,213,270          2,179,273 
===========================================  ====  ==================  ================= 
Equity and liabilities 
-------------------------------------------  ----  ------------------  ----------------- 
Equity 
-------------------------------------------  ----  ------------------  ----------------- 
Issued share capital                          19                1,826              1,826 
-------------------------------------------  ----  ------------------  ----------------- 
Share premium                                                 497,457            497,457 
-------------------------------------------  ----  ------------------  ----------------- 
Share based payment reserve                   19               14,808             12,135 
-------------------------------------------  ----  ------------------  ----------------- 
Capital contribution                                           40,000             40,000 
-------------------------------------------  ----  ------------------  ----------------- 
Retained earnings                                             651,349            678,922 
-------------------------------------------  ----  ------------------  ----------------- 
Foreign currency translation reserve                            3,675              3,675 
===========================================  ====  ==================  ================= 
Total equity                                                1,209,115          1,234,015 
===========================================  ====  ==================  ================= 
Non-current liabilities 
-------------------------------------------  ----  ------------------  ----------------- 
Interest bearing loans & borrowings           16              435,386            446,098 
-------------------------------------------  ----  ------------------  ----------------- 
Deferred tax liabilities                                           76                  - 
-------------------------------------------  ----  ------------------  ----------------- 
Contingent consideration                      23               12,937             12,040 
-------------------------------------------  ----  ------------------  ----------------- 
Provision for decommissioning obligation                          644                597 
-------------------------------------------  ----  ------------------  ----------------- 
Defined benefit plan                                            6,228              5,112 
===========================================  ====  ==================  ================= 
Total non-current liabilities                                 455,271            463,847 
===========================================  ====  ==================  ================= 
Current liabilities 
-------------------------------------------  ----  ------------------  ----------------- 
Interest bearing loans and borrowings         16              189,200            217,998 
-------------------------------------------  ----  ------------------  ----------------- 
Trade and other payables                      20              356,756            261,528 
-------------------------------------------  ----  ------------------  ----------------- 
Current taxation                                                2,928              1,885 
-------------------------------------------  ----  ------------------  ----------------- 
Total current liabilities                                     548,884            481,411 
===========================================  ====  ==================  ================= 
Total liabilities                                           1,004,155            945,258 
===========================================  ====  ==================  ================= 
Total shareholders' equity and liabilities                  2,213,270          2,179,273 
===========================================  ====  ==================  ================= 
 

Interim condensed consolidated statement of financial position continued

As at 30 June 2017

The financial statements on pages 34 to 56 were approved and authorised for issue by the board of directors on 20 July 2017 and were signed on its behalf by

 
 
A. B. C. Orjiako           A. O. Avuru                R.T. Brown 
FRC/2013/IODN/00000003161  FRC/2013/IODN/00000003100  FRC/2014/IODN/00000007983 
Chairman                   Chief Executive Officer    Chief Financial 
                                                       Officer 
27 July 2017               27 July 2017               27 July 2017 
 

Interim condensed consolidated statement of changes in equity continued

for the half year ended 30 June 2017

 
for the half year ended 30 
 June 2016 
===============================================  =======  ===========  ========  =========  ===============  ========= 
                                                   Share      Foreign 
                 Issued                            based     currency 
                  share     Share       Capital  payment  translation  Retained             Non-controlling      Total 
                capital   premium  contribution  reserve      reserve  earnings      Total         interest     equity 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
                  $'000     $'000         $'000    $'000        $'000     $'000      $'000            $'000      $'000 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
At 1 January 
 2016             1,821   497,457        40,000    8,734          325   865,485  1,413,822            (745)  1,413,077 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
(Loss)/Profit 
 for the 
 period               -         -             -        -            -  (62,506)   (62,506)            1,341   (61,165) 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Other 
comprehensive 
income                -         -             -        -            -         -          -                -          - 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
Total 
 comprehensive 
 loss for the 
 period               -         -             -        -            -  (62,506)   (62,506)            1,341   (61,165) 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
Transactions 
with owners 
in their 
capacity 
as owners: 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Share based 
 payments             -         -             -    1,650            -         -      1,650                -      1,650 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Dividends             -         -             -        -            -  (22,534)   (22,534)                -   (22,534) 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
Total                 -         -             -    1,650            -  (22,534)   (20,884)                -   (20,884) 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
At 30 June 
 2016 
 (unaudited)      1,821   497,457        40,000   10,384          325   780,445  1,330,432              596  1,331,028 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
 
 
for the half year ended 30 June 2017 
====================================================================================================================== 
                                                   Share      Foreign 
                 Issued                            based     currency 
                  share     Share       Capital  payment  translation  Retained             Non-controlling      Total 
                capital   premium  contribution  reserve      reserve  earnings      Total         interest     equity 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
                  $'000     $'000         $'000    $'000        $'000     $'000      $'000            $'000      $'000 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
At 1 January 
 2017             1,826   497,457        40,000   12,135        3,675   678,922  1,234,015                -  1,234,015 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Loss for the 
 period               -         -             -        -            -  (27,573)   (27,573)                -   (27,573) 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Other 
comprehensive 
income                -         -             -        -            -         -          -                -          - 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
Total 
 comprehensive 
 loss for the 
 period               -         -             -        -            -  (27,573)   (27,573)                -   (27,573) 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
Transactions 
with owners 
in their 
capacity 
as owners: 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Share based 
 payments             -         -             -    2,673            -         -      2,673                -      2,673 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Dividends             -         -             -        -            -         -          -                -          - 
--------------  -------  --------  ------------  -------  -----------  --------  ---------  ---------------  --------- 
Total                 -         -             -    2,673            -         -      2,673                -      2,673 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
At 30 June 
 2017 
 (unaudited)      1,826   497,457        40,000   14,808        3,675   651,349  1,209,115                -  1,209,115 
==============  =======  ========  ============  =======  ===========  ========  =========  ===============  ========= 
 
 

Interim condensed consolidated statement of cash flow

for the half year ended 30 June 2017

 
                                                                                                                                Half year    Half year ended 
                                                                                                                                    ended       30 June 2016 
                                                                                                                                  30 June 
                                                                                                                                     2017 
                                                                                                                                ---------  ----------------- 
                                                                                                                                    $'000              $'000 
                                                                                                                                ---------  ----------------- 
                                                                                                                         Note   Unaudited          Unaudited 
==============================================================================================================================  =========  ================= 
Cash flows from operating activities 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Cash generated from operations 21                                                                                                 106,241             39,907 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Net cash inflows from operating activities                                                                                        106,241             39,907 
==============================================================================================================================  =========  ================= 
Cash flows from investing activities                                                                                                    - 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Acquisition of oil and gas properties                                                                                            (11,202)           (15,519) 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Acquisition of other property, plant and equipment                                                                                  (386)            (1,236) 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Receipts from other asset 17                                                                                                       22,604                  - 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Interest received                                                                                                                     883             25,886 
==============================================================================================================================  =========  ================= 
Net cash inflows from investing activities                                                                                         11,899              9,131 
==============================================================================================================================  =========  ================= 
Cash flows from financing activities 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Repayments of bank financing                                                                                                     (41,500)          (121,509) 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Dividends paid                                                                                                                          -           (22,534) 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Interest paid                                                                                                                    (34,526)           (41,216) 
==============================================================================================================================  =========  ================= 
Net cash outflows from financing activities                                                                                      (76,026)          (185,259) 
==============================================================================================================================  =========  ================= 
Net decrease in cash and cash equivalents                                                                                          42,114          (136,221) 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Cash and cash equivalents at beginning of period                                                                                  159,621            326,029 
------------------------------------------------------------------------------------------------------------------------------  ---------  ----------------- 
Effects of exchange rate changes on cash and cash equivalents                                                                       (229)           (10,008) 
==============================================================================================================================  =========  ================= 
Cash and cash equivalents at end of period                                                                                        201,506            179,800 
==============================================================================================================================  =========  ================= 
 

Notes to the interim condensed consolidated financial statements

   1.    Corporate structure and business 

Seplat Petroleum Development Company Plc ('Seplat' or the 'Company'), the parent of the Group, was incorporated on 17 June 2009 as a private limited liability company and re-registered as a public company on 3 October 2014, under the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004. The Company commenced operations on 1 August 2010. The Company is principally engaged in oil and gas exploration and production.

The Company's registered address is: 25a Lugard Avenue, Ikoyi, Lagos, Nigeria.

The Company acquired, pursuant to an agreement for assignment dated 31 January 2010 between the Company, SPDC,

TOTAL and AGIP, a 45% participating interest in the following producing assets:

OML 4, OML 38 and OML 41 located in Nigeria. The total purchase price for these assets was US$340 million paid at the completion of the acquisition on 31 July 2010 and a contingent payment of US$33 million payable 30 days after the second anniversary, 31 July 2012, if the average price per barrel of Brent Crude oil over the period from acquisition up to 31 July 2012 exceeds US$80 per barrel. US$358.6 million was allocated to the producing assets including US$18.6 million as the fair value of the contingent consideration as calculated on acquisition date. The contingent consideration of US$33 million was paid on 22 October 2012.

In 2013, Newton Energy Limited ("Newton Energy"), an entity previously beneficially owned by the same shareholders as Seplat, became a subsidiary of the Company. On 1 June 2013, Newton Energy acquired from Pillar Oil Limited ("Pillar Oil") a 40 percent Participant interest in producing assets: the Umuseti/Igbuku marginal field area located within OPL 283 (the "Umuseti/Igbuku Fields").

On 27 March 2013, Seplat Energy Limited ("Seplat Energy") was incorporated. The principal activities of the Company is the exploration, development and transportation of petroleum products and Seplat Gas Company Limited ("Seplat Gas") was incorporated on 9 December 2013 as a private limited liability company to engage in oil and gas exploration and production.

In 2015, the Group purchased a 40% participating interest in OML 53, onshore north eastern Niger Delta, from Chevron Nigeria Ltd for $ 259.4 million.

In 2017, the Group incorporated a new subsidiary, ANOH Gas Processing Company Limited. The principal activities of the Company is the processing of gas from OML 53.

The Company together with its subsidiary, Newton Energy, and six wholly owned subsidiaries, namely, Seplat

Petroleum Development Company UK Limited ('Seplat UK'), which was incorporated on 21 August 2014, Seplat East

Onshore Limited ('Seplat East'), which was incorporated on 12 December 2014, Seplat East Swamp Company Limited

('Seplat Swamp'), which was incorporated on 12 December 2014, Seplat Gas Company Limited ('Seplat GAS'), which was incorporated on 12 December 2014, Seplat Energy Limited ('Seplat Energy'), which was incorporated on 27 March 2013 and ANOH Gas Processing Company Limited which was incorporated on 18 January 2017 are collectively referred to as the Group.

 
Subsidiary                             Country of incorporation and 
                                                  place of business  Shareholding %               Principal activities 
=================================  ================================  ==============  ================================= 
Newton Energy Limited                                                                        Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat Petroleum Development UK                                                              Oil & gas exploration and 
                                                     United Kingdom            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat East Onshore Limited                                                                  Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat East Swamp Company Limited                                                            Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat Gas Company                                                                           Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
Seplat Energy Limited                                                                        Oil & gas exploration and 
                                                            Nigeria            100%                         production 
---------------------------------  --------------------------------  --------------  --------------------------------- 
ANOH Gas Processing Company                                 Nigeria            100%                     Gas processing 
Limited 
=================================  ================================  ==============  ================================= 
 

Notes to the interim condensed consolidated financial statements continued

   2.    Significant changes in the current reporting period 

During the reporting period ended 30 June 2017, the Group renegotiated its lending arrangements resulting in a twelve month extension of its revolving credit facility till 31 December 2018. The Group also significantly increased its production volumes as a result of the lift in the force majeure which had in the previous financial year restricted exports from the Forcados terminal. The Group plans to open up other export lines to ensure sustained growth in production volumes.

Resumption of exports via the Forcados terminal, has strengthened the Group's financial performance and position during the period ended 30 June 2017.

   3.    Summary of significant accounting policies 
   3.1   Introduction to summary of significant accounting policies 

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards which are set out below.

   3.2   Basis of preparation 
   i)        Compliance with IFRS 

The interim condensed consolidated financial statements of the Group for the half year reporting period ended 30 June 2017 have been prepared in accordance with accounting standard IAS 34 Interim financial reporting.

   ii)       Historical cost convention 

The financial information has been prepared under the going concern assumption and historical cost convention, except for contingent consideration, other asset and financial instruments on initial recognition measured at fair value. The historical financial information is presented in US Dollars and all values are rounded to the nearest thousand ($000) except when otherwise indicated. The accounting policies are applicable to both the Company and Group.

   iii)      Going concern 

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least twelve months from the date of these financial statements.

   iv)      New and amended standards adopted by the Group 

There were a number of new standards and amendments to standards that are effective for annual periods beginning after 1 January 2017; the Group has adopted these new or amended standards in preparing the interim condensed consolidated financial statements. The nature and impact of the new standards and amendments to the standards are described below.

Other than the changes described below, the accounting policies adopted are consistent with those of the previous financial year.

   a)       Disclosure initiative - Amendments to IAS 7 

The Group is now required to explain changes in their liabilities arising from financing activities. This includes changes arising from cash flows (e.g. drawdowns and repayments of borrowings) and non-cash changes such as acquisitions, disposals, accretion of interest and unrealised exchange differences.

Changes in financial assets are included in this disclosure if the cash flows were, or are, included in cash flows from financing activities. This is the case, for example, for assets that hedge liabilities arising from financing liabilities.

The Group may include changes in other items as part of this disclosure, for example by providing a 'net debt' reconciliation. However, in this case the changes in the other items are disclosed separately from the changes in liabilities arising from financing activities.

Notes to the interim condensed consolidated financial statements continued

The Group discloses this information in tabular format as a reconciliation from opening and closing balances, but may adopt a different format as the standard does not mandate a specific format.

The Group discloses this information in Note 16.

   v)     New standards, amendments and interpretations not yet adopted 

The Group has the following updates to information provided in the last annual financial statements about the standards issued but not yet effective that may have a significant impact on the Group's consolidated financial statements.

   a.      Amendments to IFRS 2 Share-based payments 

In June 2016, the IASB made amendments to IFRS 2 Share-based payments which clarified the effect of vesting conditions on the measurement of cash-settled share-based payment transactions, the classification of share-based payment transactions with net settlement features and the accounting for a modification of the terms and conditions that changes the classification of the transaction from cash-settled to equity-settled.

The amendments are effective for reporting periods beginning on or after 1 January 2018. The Group will adopt the amendments from 1 January 2018.

   b.      IFRS 9 Financial Instruments 

IFRS 9 Financial instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities, the standard introduces new rules for hedge accounting and a new impairment model for financial assets. The Group has decided not to adopt IFRS 9 until it becomes mandatory on 1 January 2018.

The Group is undergoing a detailed assessment of the impact of the new standard on the classification and measurement of its financial assets. From the preliminary results, the Group does not expect the new guidance to have a significant impact on the classification and measurement of its financial assets for the following reason:

-- All of the Group's financial assets are currently classified as loans and receivables and are measured at amortised cost and will satisfy the conditions for classification at amortised cost under IFRS 9.

There will be no impact on the Group's accounting for financial liabilities, as the new requirements only affect accounting for financial liabilities that are designated at fair value through profit or loss and the Group does not have such liabilities. The de-recognition rules have been transferred from IAS 39 Financial Instruments: Recognition and Measurement and have not been changed. The new hedge accounting rules will align the accounting for hedging instruments more closely with the Group's risk management practices. As a general rule, more hedge relationships might be eligible for hedge accounting, as the standard introduces a more principles-based approach. The Group does not expect a significant impact on the accounting for its hedging relationships as a result of the adoption of IFRS 9, as they have not formally elected to apply hedge accounting.

The new impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses as is the case under IAS 39. It applies to financial assets classified at amortised cost, debt instruments measured at fair value through OCI (FVOCI), contract assets under IFRS 15: Revenue from Contracts with Customers and lease receivables. Based on assessments undertaken on the Group's portfolio of NPDC receivables, it estimates that should the new rules had been adopted as at 1 January 2017, there would have been an

increase to its loss allowance for NPDC receivables of approximately $4 million at that date and retained earnings would decrease by the same amount.

The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extent of the Group's disclosures about its financial instruments particularly in the year of the adoption of the new standard.

   c.      IFRS 15 Revenue from contracts with customers 

The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers revenue arising from the sale of goods and the rendering of services and IAS 11 which covers construction contracts.

The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer.

Notes to the interim condensed consolidated financial statements continued

The standard permits either a full retrospective or a modified retrospective approach for the adoption. The new standard is effective for first interim periods within annual reporting periods beginning on or after 1 January 2018. The Group will adopt the new standard from 1 January 2018.

Management identified the following areas that are likely to be affected:

-- Accounting for under lifts and over lifts: IFRS 15 is applicable only if the counterparty to the contract is a customer. The standard defines a customer as a party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities. IFRS 15 makes a distinction between customers and partners or collaborators who share in the risks and benefits that result from the activity or process. If the over-lifter does not meet the definition of a customer or the transaction is a non-monetary exchange, then over lifts and under lifts will not be recognised as revenue from contracts with customers. If the Group were to adopt the new rules as at 1 January 2017, it estimates that revenue would have reduced by $16 million and other operating income would have increased by the same amount.

-- Accounting for consideration payable to the customer: The standard requires that an entity accounts for consideration payable to a customer as a reduction of the transaction price and, therefore, net of revenue unless the payment to the customer is in exchange for a distinct good or service that the customer transfers to the entity. The Group incurs barging costs in the course of the satisfaction of its performance obligations i.e. delivery of crude oil and gas. These costs do not transfer any distinct good or service to Seplat and as such represent consideration payable to customer and will be accounted for as a direct deduction from revenue. If the Group had adopted the new rules as at 1 January 2017, revenue would have reduced by an additional $18 million as a result of barging costs.

-- Presentation of contract assets and contract liabilities in the balance sheet - IFRS 15 requires separate presentation of contract assets and contract liabilities in the balance sheet. This will result in some reclassifications as of 1 January 2018 in relation to advances for future oil sales which are currently included in deferred revenue.

-- Other likely areas of impact are in relation to advances for future oil sales that may have a significant financing component and variable consideration arising from gas pricing based on an index as well as optional pricing on crude oil sold to customers.

   d.      IFRS 16 Leases 

IFRS 16 was issued in January 2016. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change.

The standard will affect primarily the accounting for the Group's operating leases. As at the reporting date, the Group has non-cancellable operating lease commitments of $0.39 million. However, the Group has not yet determined to what extent these commitments will result in the recognition of an asset and a liability for future payments and how this will affect the Group's profit and classification of cash flows.

Some of the commitments may be covered by the exception for short-term leases, while none of the leases will be covered by the exception for low value leases. Some commitments may relate to arrangements that will not qualify as leases under IFRS 16, principally because they are service contracts.

The standard is mandatory for first interim periods within annual reporting periods beginning on or after 1 January 2019. At this stage, the Group does not intend to adopt the standard before its effective date.

   3.3   Basis of consolidation 

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 30 June 2017.

This basis is the same adopted for the last audited financial statements as at 31 December 2016.

   3.4   Functional and presentation currency 

The Group's financial statements are presented in United States Dollars, which is also the Company's functional currency. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Notes to the interim condensed consolidated financial statements continued

   i)        Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other income or other expenses.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

   ii)           Group companies 

The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

-- assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet

-- income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

   --      all resulting exchange differences are recognised in other comprehensive income. 

On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

   4.    Segment reporting 

Segment reporting has not been prepared as the Group operates one segment, being the exploration, development and production of oil and gas related products located in Nigeria. Operations in the different OMLs are integrated due to geographic proximity, the use of shared infrastructure and common operational management.

   5.    Significant accounting judgements, estimates and assumptions 
   5.1    Judgements 

Management's judgements at the end of the half year are consistent with those disclosed in the recent 2016 Annual financial statements. The following are some of the judgements which have the most significant effect on the amounts recognised in this consolidated financial statements.

   i)        OMLs 4, 38 and 41 

OMLs 4, 38, 41 are grouped together as a cash generating unit for the purpose of impairment testing. These three

OMLs are grouped together because they each do not independently generate cash flows. They currently operate as a single block sharing resources for the purpose of generating cash flows. Crude oil and gas sold to third parties from these OMLs are invoiced together.

   ii)       Advances on investment (note 18) 

The Group considers that the advances on investment of US$65.7 million (2016: US$65.7 million) in relation to the acquisition of additional assets is fully recoverable in accordance with the terms of the deposit.

Notes to the interim condensed consolidated financial statements continued

   5.2   Estimates and assumptions 

The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are disclosed in the most recent 2016 annual financial statements.

The following are some of the estimates and assumptions made.

   i)        Impairment of financial assets 

The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Management has made certain assumptions about the recoverability of financial assets exposed to credit risk from NPDC. These are based on management's past experiences with NPDC, current discussions with NPDC and financial capacity of NPDC. However, wherever these assumptions do not hold, it might have a significant impact on the Group's profit or loss in future.

   ii)       Defined benefit plans 

The cost of the defined benefit retirement plan and the present value of the retirement obligation are determined at the end of the financial year using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and changes in inflation rates. Service and interest costs are recognised at each reporting period based on an estimate of the periodic benefit expense for the financial year.

The defined benefit obligation recognised in this period has been based on the same assumptions as in the previous financial year The subsequent financial year end balance was estimated as at 31 December 2016 and has been recognised in this half year period on a pro rata basis. Therefore, no actuarial gains or losses have been recognised given that last year's assumptions have been adopted.

   iii)      Contingent consideration 

The fair value of the contingent consideration arrangement of US$12.9 million was estimated calculating the present value of the future expected cash flows. The estimates are based on a discount rate of 15.45%. Refer to note 23 for further details.

   6.    Financial risk management 
   6.1    Financial risk factors 

The Group's activities expose it to a variety of financial risks such as market risk (including foreign exchange risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The Group's risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

Notes to the interim condensed consolidated financial statements continued

 
Risk          Exposure arising           Measurement            Management 
               from 
------------  -------------------------  ---------------------  -------------------- 
Market risk   Future commercial          Cash flow forecasting  Match and settle 
 - foreign     transactions               Sensitivity            foreign denominated 
 exchange      Recognised financial       analysis               cash inflows 
               assets and liabilities                            with foreign 
               not denominated                                   denominated cash 
               in US dollars.                                    outflows. 
------------  -------------------------  ---------------------  -------------------- 
Market risk   Long term borrowings       Sensitivity            None 
 - interest    at variable rate           analysis 
 rate 
------------  -------------------------  ---------------------  -------------------- 
Market risk   Future sales transactions  Sensitivity            Oil price hedges 
 - commodity                              analysis 
 prices 
------------  -------------------------  ---------------------  -------------------- 
Credit risk   Cash and cash              Aging analysis         Diversification 
               equivalents, trade         Credit ratings         of bank deposits. 
               receivables and 
               derivative financial 
               instruments. 
------------  -------------------------  ---------------------  -------------------- 
Liquidity     Borrowings and             Rolling cash           Availability 
 risk          other liabilities          flow forecasts         of committed 
                                                                 credit lines 
                                                                 and borrowing 
                                                                 facilities 
------------  -------------------------  ---------------------  -------------------- 
 

6.1.1 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group manages liquidity risk by ensuring that sufficient funds are available to meet its commitments as they fall due.

The Group uses both long-term and short-term cash flow projections to monitor funding requirements for activities and to ensure there are sufficient cash resources to meet operational needs. Cash flow projections take into consideration the Group's debt financing plans and covenant compliance. Surplus cash held is transferred to the treasury department which invests in interest bearing current accounts, time deposits and money market deposits.

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed maturity periods. The table has been drawn based on the undiscounted cash flows of the financial liabilities based on the earliest date on which the Group can be required to pay.

Notes to the interim condensed consolidated financial statements continued

 
                        Variable rate   Less than           1 -2           2 - 3           3 - 5     After       Total 
                                           1 year          years           years           years   5 years 
                        =============  ==========  =============  ==============  ==============  ========  ========== 
                                    %      $ '000         $ '000          $ '000          $ '000    $ '000      $ '000 
                        =============  ==========  =============  ==============  ==============  ========  ========== 
30 June 2017 
======================  =============  ==========  =============  ==============  ==============  ========  ========== 
Non - derivatives 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Variable interest rate 
borrowings (bank 
loans): 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Allan Gray                 8.5%+LIBOR       4,328          5,333           4,904           3,038         -      17,603 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Zenith Bank Plc            8.5%+LIBOR      59,315         73,081          67,203          41,636         -     241,235 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
First Bank of Nigeria      8.5%+LIBOR      32,743         40,343          37,098          22,984         -     133,168 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
United Bank of Africa 
 Plc                       8.5%+LIBOR      37,072         45,676          42,002          26,022         -     150,772 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Stanbic IBTC Bank Plc      8.5%+LIBOR       5,556          6,845           6,294           3,900         -      22,595 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
The Standard Bank of 
 South Africa Limited      8.5%+LIBOR       5,556          6,845           6,294           3,900         -      22,595 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Standard Chartered 
 Bank                      6.0%+LIBOR      14,859          9,240               -               -         -      24,099 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Natixis                    6.0%+LIBOR      14,859          9,240               -               -         -      24,099 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Citibank Nigeria 
 Limited and Citibank 
 N.A.                      6.0%+LIBOR      11,557          7,186               -               -         -      18,743 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
First Rand Bank 
 (Merchant Bank 
 Division)                 6.0%+LIBOR       9,906          6,160               -               -         -      16,066 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Nomura International 
 Plc.                      6.0%+LIBOR       9,906          6,160               -               -         -      16,066 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Ned Bank Ltd London 
 Branch                    6.0%+LIBOR       9,906          6,160               -               -         -      16,066 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
The Mauritius 
 Commercial Bank Plc       6.0%+LIBOR       9,906          6,160               -               -         -      16,066 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Stanbic IBTC Bank Plc      6.0%+LIBOR       7,429          4,620                               -         -      12,049 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
The Standard Bank of 
 South Africa Limited      6.0%+LIBOR      10,733          6,674               -               -         -      17,407 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Other non-derivatives 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Trade and other 
 payables                           -     155,304              -               -               -         -     155,304 
----------------------  -------------  ----------  -------------  --------------  --------------  --------  ---------- 
Contingent 
 consideration                      -           -              -          18,500               -         -      18,500 
======================  =============  ==========  =============  ==============  ==============  ========  ========== 
                                          398,935        239,723         182,295         101,480               922,433 
======================  =============  ==========  =============  ==============  ==============  ========  ========== 
 

Notes to the interim condensed consolidated financial statements continued

 
                           Variable     Less       1 -       2 -       3 -     After     Total 
                               rate     than         2         3         5   5 years 
                                      1 year      year     years     years 
                           --------  -------  --------  --------  --------  --------  -------- 
                                  %   $ '000    $ '000    $ '000    $ '000    $ '000    $ '000 
                           ========  =======  ========  ========  ========  ========  ======== 
31 December 2016 
=========================  ========  =======  ========  ========  ========  ========  ======== 
Non - derivatives 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Variable interest 
 rate borrowings 
 (bank loans): 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
                               8.5% 
Zenith Bank Plc             + LIBOR   37,406    76,006    70,109    74,477         -   257,998 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
First Bank of                  8.5% 
 Nigeria Limited            + LIBOR   23,379    47,504    43,818    46,548         -   161,249 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
United Bank for                8.5% 
 Africa Plc                 + LIBOR   23,379    47,504    43,818    46,548         -   161,249 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Stanbic IBTC Bank              8.5% 
 Plc                        + LIBOR    3,504     7,119     6,567     6,976         -    24,166 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
The Standard Bank 
 of South Africa               8.5% 
 Limited                    + LIBOR    3,504     7,119     6,567     6,976         -    24,166 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Standard Chartered             6.0% 
 Bank                       + LIBOR   27,711         -         -         -         -    27,711 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
                               6.0% 
Natixis                     + LIBOR   27,711         -         -         -         -    27,711 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Citibank Nigeria 
 Ltd and Citibank              6.0% 
 NA                         + LIBOR   27,711         -         -         -         -    27,711 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Bank of America 
 Merrill Lynch                 6.0% 
 Int'l Ltd                  + LIBOR   18,474         -         -         -         -    18,474 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
FirstRand Bank 
 Ltd (Rand Merchant            6.0% 
 Bank Division)             + LIBOR   18,474         -         -         -         -    18,474 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
JP Morgan Chase 
 Bank NA, London               6.0% 
 Branch                     + LIBOR   18,474         -         -         -         -    18,474 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
NedBank Ltd, London            6.0% 
 Branch                     + LIBOR   18,474         -         -         -         -    18,474 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Stanbic IBTC Bank              6.0% 
 Plc                        + LIBOR   13,856         -         -         -         -    13,856 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
The Standard Bank 
 of South Africa               6.0% 
 Ltd                        + LIBOR   13,856         -         -         -         -    13,856 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Other non - derivatives 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Trade and other 
 payables                         -  161,773         -         -         -         -   161,773 
-------------------------  --------  -------  --------  --------  --------  --------  -------- 
Contingent consideration          -        -         -         -    18,500         -    18,500 
=========================  ========  =======  ========  ========  ========  ========  ======== 
                                     437,686   185,252   170,879   200,025         -   993,842 
=========================  ========  =======  ========  ========  ========  ========  ======== 
 
   6.2   Fair value measurements 

Financial instruments measured at fair value were based on the same assumptions as determined in the 31 December 2016 financial statements. The judgements and estimates made by the Group in determining the fair values of the financial instruments have remained the same since the last annual financial report. There were no transfers of financial instruments between fair value hierarchy levels during this half year.

Notes to the interim condensed consolidated financial statements continued

   7.    Revenue 
 
                         Half year ended  Half year ended  3 months ended  3 months ended 
                            30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                         ---------------  ---------------  --------------  -------------- 
                                   $'000            $'000           $'000           $'000 
=======================  ===============  ===============  ==============  ============== 
Crude oil sales                  111,183           69,952          81,073          33,457 
-----------------------  ---------------  ---------------  --------------  -------------- 
(Over lift)/under lift          (33,732)           35,930        (25,863)          16,334 
=======================  ===============  ===============  ==============  ============== 
                                  77,451          105,882          55,210          49,791 
-----------------------  ---------------  ---------------  --------------  -------------- 
Gas sales                         54,363           47,140          29,305          19,815 
=======================  ===============  ===============  ==============  ============== 
Revenue                          131,814          153,022          84,515          69,606 
=======================  ===============  ===============  ==============  ============== 
 

The major off-taker for crude oil is Mercuria. The major off-taker for gas is the Nigerian Gas Company.

In the prior period to 30 June 2016, realised fair value losses on crude oil hedges of US$9,999 ('000) were included in Revenue. This is now classified under Fair Value Loss (note 11).

   8.    Cost of sales 
 
                                           Half year ended  Half year ended  3 months ended  3 months ended 
                                              30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                           ---------------  ---------------  --------------  -------------- 
                                                     $'000            $'000           $'000           $'000 
=========================================  ===============  ===============  ==============  ============== 
Crude handling fees                                  5,006           10,833           4,458           1,151 
-----------------------------------------  ---------------  ---------------  --------------  -------------- 
Barging cost                                         6,524                -           4,384               - 
-----------------------------------------  ---------------  ---------------  --------------  -------------- 
Royalties                                           18,753           13,376          13,809           4,568 
-----------------------------------------  ---------------  ---------------  --------------  -------------- 
Depletion, depreciation and amortisation            28,974           28,509          17,619           9,573 
-----------------------------------------  ---------------  ---------------  --------------  -------------- 
Niger Delta Development Commission levy              2,381            2,961           1,240           1,060 
-----------------------------------------  ---------------  ---------------  --------------  -------------- 
Rig related expenses                                 1,630            1,813             630             765 
-----------------------------------------  ---------------  ---------------  --------------  -------------- 
Operations & maintenance expenses                   14,919           26,250           7,863          12,845 
=========================================  ===============  ===============  ==============  ============== 
Cost of sales                                       78,187           83,742          50,003          29,962 
=========================================  ===============  ===============  ==============  ============== 
 
   9.    General and administrative expenses 
 
                                       Half year ended  Half year ended  3 months ended  3 months ended 
                                          30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                       ---------------  ---------------  --------------  -------------- 
                                                 $'000            $'000           $'000           $'000 
=====================================  ===============  ===============  ==============  ============== 
Depreciation                                     2,362            2,744           1,244           1,431 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Employee benefits                               10,776           10,465           4,939           4,252 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Professional and consulting fees                11,276           11,174           6,831           5,525 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Auditor's remuneration                             306               56             156               - 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Directors emoluments (executive)                 1,382            1,613             800             404 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Directors emoluments (non-executive)             1,555            2,395             802           1,480 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Rentals                                            732            1,008             494             418 
-------------------------------------  ---------------  ---------------  --------------  -------------- 
Other general expenses                           7,926           20,137           4,290          14,633 
=====================================  ===============  ===============  ==============  ============== 
General and administrative expenses             36,315           49,592          19,556          28,143 
=====================================  ===============  ===============  ==============  ============== 
 

Directors' emoluments have been split between executive and non-executive directors. There were no non-audit services rendered by the Group's auditors during the period. Other general expenses relate to costs such as office maintenance costs, telecommunication costs, logistics costs and others. Share based payment expenses are included in the employee benefits expense.

Notes to the interim condensed consolidated financial statements continued

10. Loss on foreign exchange - net

 
                Half year ended  Half year ended  3 months ended  3 months ended 
                   30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                ---------------  ---------------  --------------  -------------- 
                          $'000            $'000           $'000           $'000 
==============  ===============  ===============  ==============  ============== 
Exchange loss             (866)         (28,330)         (2,596)        (25,889) 
==============  ===============  ===============  ==============  ============== 
 

This is principally as a result of translation of naira denominated monetary assets and liabilities.

11. Fair value loss

 
                                                   Half year ended  Half year ended  3 months ended  3 months ended 
                                                      30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                                   ---------------  ---------------  --------------  -------------- 
                                                             $'000            $'000           $'000           $'000 
=================================================  ===============  ===============  ==============  ============== 
Realised fair value losses on crude oil hedges             (9,827)          (9,999)         (4,834)         (9,999) 
-------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Unrealised fair value losses on crude oil hedges                 -         (20,787)               -        (20,787) 
-------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Fair value loss on contingent consideration                  (897)          (2,559)           (457)         (1,758) 
-------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Fair value gain on other assets                              1,514                -           1,514               - 
=================================================  ===============  ===============  ==============  ============== 
Fair value loss                                            (9,210)         (33,345)         (3,777)        (32,544) 
=================================================  ===============  ===============  ==============  ============== 
 

Realised fair value losses on crude oil hedges represent the payments for crude oil price options, while unrealised fair value losses represent losses on crude oil price hedges charged to profit or loss. Fair value loss on contingent consideration arises in relation to remeasurement of contingent consideration on the Group's acquisition of participating interest in its OML 53. The contingency criteria are the achievement of certain production milestones. Fair value gain on other assets arises from the fair value remeasurement of the Group's rights to receive the discharge sum of US$308 million.

In the prior period to 30 June 2016, realised fair value losses on crude oil hedges of US$9,999 ('000) were included in Revenue (note 7). This is now classified under Fair Value Loss.

12. Finance income/ (costs)

 
                                                      Half year ended  Half year ended  3 months ended  3 months ended 
                                                         30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                                      ---------------  ---------------  --------------  -------------- 
                                                                $'000            $'000           $'000           $'000 
====================================================  ===============  ===============  ==============  ============== 
Finance income 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Interest income                                                   883           25,886             673          23,655 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Finance costs                                                                                        -               - 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Interest on bank loan and other bank charges                   34,526           41,216          17,368          19,262 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Unwinding of discount on provision for 
 decommissioning                                                   47              216              24               - 
====================================================  ===============  ===============  ==============  ============== 
                                                               34,573           41,432          17,392          19,262 
====================================================  ===============  ===============  ==============  ============== 
Finance (cost)/ income - net                                 (33,690)         (15,546)        (16,719)           4,393 
====================================================  ===============  ===============  ==============  ============== 
 

13. Taxation

Income tax expense is recognised based on management's estimate of the weighted average effective annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the period to 30 June 2017 is 65.75% for crude oil activities and 30% for gas activities. As at 31st December 2016, the tax rates were 65.75% and 30% for crude oil and gas activities respectively.

Deferred income tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred income tax assets of US$235

Notes to the interim condensed consolidated financial statements continued

million (2016: US$192 million) in respect of temporary differences amounting to US$357 million (2016: US$292 million). Out of this, deferred tax asset of $71 million (2016: US$47 million) relates tax losses of US$109 million (2016: US$71 million). There are no expiration dates for the tax losses.

14. Loss per share (LPS)

Basic

Basic LPS is calculated on the Group's loss after taxation attributable to the parent entity and on the basis of the weighted average of issued and fully paid ordinary shares at the end of the period.

Diluted

Diluted LPS is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares (arising from outstanding share awards in the share based payment scheme) into ordinary shares.

 
                                                      Half year ended  Half year ended  3 months ended  3 months ended 
                                                         30 June 2017     30 June 2016    30 June 2017    30 June 2016 
                                                      ---------------  ---------------  --------------  -------------- 
                                                                $'000            $'000           $'000           $'000 
====================================================  ===============  ===============  ==============  ============== 
 
Loss for the period attributable to equity holders 
 of the parent                                               (27,573)         (62,506)         (8,436)        (43,677) 
====================================================  ===============  ===============  ==============  ============== 
                                                                                 Share           Share           Share 
                                                                    -             '000            '000            '000 
====================================================  ===============  ===============  ==============  ============== 
Weighted average number of ordinary shares in issue           563,445          560,576         563,445         560,576 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Share awards                                                    4,943            2,223           4,943           2,223 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Weighted average number of ordinary shares adjusted 
 for the effect of dilution                                   568,388          562,799         568,388         562,799 
====================================================  ===============  ===============  ==============  ============== 
                                                                    $                $               $               $ 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Basic loss per share                                           (0.05)           (0.11)          (0.01)          (0.08) 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
Diluted loss per share                                         (0.05)           (0.11)          (0.01)          (0.08) 
----------------------------------------------------  ---------------  ---------------  --------------  -------------- 
 
                                                                $'000            $'000           $'000           $'000 
====================================================  ===============  ===============  ==============  ============== 
Loss attributable to equity holders of the parent            (27,573)         (62,506)         (8,436)        (43,677) 
====================================================  ===============  ===============  ==============  ============== 
Loss used in determining diluted loss per share              (27,573)         (62,506)         (8,436)        (43,677) 
====================================================  ===============  ===============  ==============  ============== 
 

15. Dividend

 
                                  Half year ended  Half year ended 
                                     30 June 2017     30 June 2016 
                                  ---------------  --------------- 
                                            $'000            $'000 
================================  ===============  =============== 
Dividend paid during the period                 -           22,534 
================================  ===============  =============== 
                                                $                $ 
================================  ===============  =============== 
Dividend per share ($)                          -             0.04 
================================  ===============  =============== 
 

Notes to the interim condensed consolidated financial statements continued

16. Interest bearing loans & borrowings

Below is the net debt reconciliation on interest bearing loans and borrowings.

 
                               Borrowings due  Borrowings due 
                                within 1 year    above 1 year      Total 
                                      US$'000         US$'000    US$'000 
=============================  ==============  ==============  ========= 
Balance as at 1 
 January 2017                         217,998         446,098    664,096 
Effective interest                          -          36,515     36,515 
-----------------------------  --------------  --------------  --------- 
Effect of loan restructuring         (28,798)          28,798          - 
-----------------------------  --------------  --------------  --------- 
Repayment                                   -        (76,025)   (76,025) 
-----------------------------  --------------  --------------  --------- 
Balance as at 30 
 June 2017                            189,200         435,386    624,586 
=============================  ==============  ==============  ========= 
 

17. Other asset

 
                                             As at 30 June 2017 
                                             ------------------ 
                                                          $'000 
===========================================  ================== 
Initial fair value of investment in OML 55              250,090 
-------------------------------------------  ------------------ 
Receipts from crude oil lifted                         (22,604) 
-------------------------------------------  ------------------ 
Fair value adjustment as at 30 June 2017                  1,514 
===========================================  ================== 
Fair value as at 30 June 2017                           229,000 
===========================================  ================== 
 

Other asset represents the Group's rights to receive the discharge sum of US$308 million (2016: US$330 million) from the crude oil reserves of OML 55.The asset is measured at fair value through profit or loss (FVTPL) and receipts from crude oil lifted reduce the value of the asset. At each reporting date, the fair value of the discharge sum is determined using the income approach in line with IFRS 13: Fair Value Measurement. As at 30 June 2017, the fair value of the discharge sum is US$229 million (2016: US$250 million).

18. Trade and other receivables

 
                                                            As at 30 June 2017  As at 31 Dec 2016 
                                                            ------------------  ----------------- 
                                                                         $'000              $'000 
==========================================================  ==================  ================= 
Trade receivables                                                      134,378             73,427 
----------------------------------------------------------  ------------------  ----------------- 
Nigerian Petroleum Development Company (NPDC) receivables              224,915            239,034 
----------------------------------------------------------  ------------------  ----------------- 
National Petroleum Investment Management Services                        6,001              8,233 
----------------------------------------------------------  ------------------  ----------------- 
Advances on investment                                                  65,705             65,705 
----------------------------------------------------------  ------------------  ----------------- 
Under lift                                                               2,445              4,498 
----------------------------------------------------------  ------------------  ----------------- 
Advances to suppliers                                                    7,513              8,921 
----------------------------------------------------------  ------------------  ----------------- 
Other receivables                                                        2,585              1,136 
----------------------------------------------------------  ------------------  ----------------- 
                                                                             - 
==========================================================  ==================  ================= 
Impairment loss on NPDC receivables                                   (10,260)           (10,260) 
==========================================================  ==================  ================= 
 
                                                                       433,282            390,694 
==========================================================  ==================  ================= 
 

18a. Trade receivables:

Included in trade receivables is an amount due from NGC of US$87 million (2016: US$67 million) with respect to the sale of gas.

Notes to the interim condensed consolidated financial statements continued

18b. NPDC receivables:

NPDC receivables represent the outstanding cash calls due to Seplat from its JV partner, Nigerian Petroleum Development Company. The receivables have been discounted to reflect the impact of time value of money, and an impairment loss has been recognized in the financial statements. As at 30 June 2017, the undiscounted value of this receivable is US$225 million (2016: US$239 million).

18c. Advances on investment:

This comprises an advance of US$45million on a potential investment in OML 25 and US$20.5 million currently held in an escrow account. Proceedings commenced against Newton Energy Limited, a wholly owned subsidiary of Seplat Plc by Crestar Natural Resources relating to the US$20.5 million currently held in an escrow account. The escrow monies relate to the potential acquisition of OML 25 by Crestar which Newton Energy has an option to invest into. These monies were placed in escrow in July 2015 pursuant to an agreement reached with Crestar and the vendor on final terms of the transaction.

19. Share capital

19a. Authorised and issued share capital

 
                                                                                 As at 30 June 2017  As at 31 Dec 2016 
                                                                                 ------------------  ----------------- 
                                                                                              $'000              $'000 
===============================================================================  ==================  ================= 
Authorised ordinary share capital 
-------------------------------------------------------------------------------  ------------------  ----------------- 
 
1,000,000,000 ordinary shares denominated in Naira of 50 kobo per share                       3,335              3,335 
===============================================================================  ==================  ================= 
 
Issued and fully paid 
-------------------------------------------------------------------------------  ------------------  ----------------- 
 
563,444,561 (2016: 563,444,561) issued shares denominated in Naira of 50 kobo 
 per share                                                                                    1,826              1,826 
===============================================================================  ==================  ================= 
 

19b. Employee share based payment scheme

As at 30 June 2017, the Group had awarded shares of 25,726,262 (2016: 25,448,071 shares) to certain employees and senior executives in line with its share based incentive scheme. During the half year ended 30 June 2017, no shares were vested (31 December 2016: 2,868,460 shares had vested, resulting in an increase in number of issued and fully paid ordinary shares of 50k each from 561 million to 563 million).

20. Trade and other payables

 
                              As at 30 June 2017  As at 31 Dec 2016 
                              ------------------  ----------------- 
                                           $'000              $'000 
============================  ==================  ================= 
Trade payables                           104,866            108,140 
----------------------------  ------------------  ----------------- 
Accruals and other payables               88,724             83,850 
----------------------------  ------------------  ----------------- 
NDDC levy                                  5,145                 19 
----------------------------  ------------------  ----------------- 
Deferred revenue                         121,671             35,170 
----------------------------  ------------------  ----------------- 
Royalties                                 36,350             34,349 
============================  ==================  ================= 
                                         356,756            261,528 
============================  ==================  ================= 
 
 

Included in accruals and other payables are field-related accruals US$36 million (2016: US$35m) and other vendor payables of US$53m (2016: US$48m). Deferred revenue includes advance payments for crude oil sales of US$120m (2016: US$34m) and royalties include accruals in respect of gas sales for which payment is outstanding at the end of the period.

Notes to the interim condensed consolidated financial statements continued

21. Computation of cash generated from operations

 
                                                                              Half year ended  Half year ended 
                                                                                 30 June 2017     30 June 2016 
                                                                              ---------------  --------------- 
                                                                                        $'000            $'000 
============================================================================  ===============  =============== 
Loss before tax                                                                      (26,454)         (57,533) 
============================================================================  ===============  =============== 
Adjusted for: 
----------------------------------------------------------------------------  ---------------  --------------- 
Depletion, depreciation and amortisation                                               31,336           31,253 
----------------------------------------------------------------------------  ---------------  --------------- 
Interest on bank loan and other bank charges                                           34,526           41,216 
----------------------------------------------------------------------------  ---------------  --------------- 
Unwinding of discount on provision for decommissioning                                     47              216 
----------------------------------------------------------------------------  ---------------  --------------- 
Interest income                                                                         (883)         (25,886) 
----------------------------------------------------------------------------  ---------------  --------------- 
Fair value loss on contingent consideration                                               897            2,559 
----------------------------------------------------------------------------  ---------------  --------------- 
Unrealised fair value loss on crude oil hedges                                              -           20,787 
----------------------------------------------------------------------------  ---------------  --------------- 
Fair value gain on other asset                                                        (1,514)                - 
----------------------------------------------------------------------------  ---------------  --------------- 
Unrealised foreign exchange loss                                                          866           28,330 
----------------------------------------------------------------------------  ---------------  --------------- 
Share based payments expenses                                                           2,673            1,650 
----------------------------------------------------------------------------  ---------------  --------------- 
Defined benefit expenses                                                                1,116            (930) 
----------------------------------------------------------------------------  ---------------  --------------- 
Loss on disposal of other property, plant and equipment                                    82                - 
----------------------------------------------------------------------------  ---------------  --------------- 
Changes in working capital (excluding the effects of exchange differences): 
----------------------------------------------------------------------------  ---------------  --------------- 
Trade and other receivables, including prepayments                                   (26,589)           74,407 
----------------------------------------------------------------------------  ---------------  --------------- 
Trade and other payables                                                               86,031         (52,333) 
----------------------------------------------------------------------------  ---------------  --------------- 
Inventories                                                                             4,107         (23,829) 
============================================================================  ===============  =============== 
Net cash from operating activities                                                    106,241           39,907 
============================================================================  ===============  =============== 
 

22. Related party relationships and transactions

The Group is controlled by Seplat Petroleum Development Company Plc (the 'parent Company'). As at 30 June 2017, the parent Company is owned 8.39% either directly or by entities controlled by A.B.C. Orjiako ('SPDCL BVI') and members of his family and 13.15% either directly or by entities controlled by Austin Avuru ('Professional Support Limited' and 'Platform Petroleum Limited'). The remaining shares in the parent company are widely held.

22a. Related party relationships

The services provided by the related parties:

Abbeycourt Trading Company Limited: The Chairman of Seplat is a director and shareholder. The company provides diesel supplies to Seplat in respect of Seplat's rig operations.

Berwick Nigeria Limited: The Chairman of Seplat is a shareholder and director. The company provides construction services to Seplat in relation to a field base station in Sapele.

Cardinal Drilling Services Limited (formerly Caroil Drilling Nigeria Limited): Is owned by common shareholders with the parent Company. The company provides drilling rigs and drilling services to Seplat.

Charismond Nigeria Limited: The sister to the CEO works as a General Manager. The company provides administrative services including stationary and other general supplies to the field locations.

Helko Nigeria Limited: The Chairman of Seplat is shareholder and director. The company owns the lease to Seplat's main office at 25A Lugard Avenue, Lagos, Nigeria.

Keco Nigeria Enterprises: The Chief Executive Officer's sister is shareholder and director. The company provides diesel supplies to Seplat in respect of its rig operations.

Montego Upstream Services Limited: The Chairman's nephew is shareholder and director. The company provides drilling and engineering services to Seplat.

Nabila Resources & Investment Ltd: The Chairman's in-law is a shareholder and director. The company provides lubricant to Seplat.

Ndosumili Ventures Limited: Is a subsidiary of Platform Petroleum Limited. The company provides transportation services to Seplat.

Nerine Support Services Limited: Is owned by common shareholders with the parent Company. Seplat leases a warehouse from Nerine and the company provides agency and contract workers to Seplat.

Oriental Catering Services Limited: The Chief Executive Officer of Seplat's spouse is shareholder and director. The company provides catering services to Seplat at the staff canteen.

ResourcePro Inter Solutions Limited: The Chief Executive Officer of Seplat's in-law is its UK representative. The company supplies furniture to Seplat.

Shebah Petroleum Development Company Limited (BVI): The Chairman of Seplat is a director and shareholder of SPDCL (BVI). SPDCL (BVI) provided consulting services to Seplat.

The following transactions were carried by Seplat with related parties:

22b. Related party relationships

 
ii) Purchases of goods and services                Half year ended  Half year ended 
                                                      30 June 2017     30 June 2016 
                                                   ---------------  --------------- 
                                                             $'000            $'000 
=================================================  ===============  =============== 
Shareholders of the parent company 
-------------------------------------------------  ---------------  --------------- 
M&P (MPI SA)                                                     -               38 
-------------------------------------------------  ---------------  --------------- 
SPDCL (BVI)                                                    564              576 
=================================================  ===============  =============== 
                                                               564              614 
=================================================  ===============  =============== 
Entities controlled by key management personnel: 
-------------------------------------------------  ---------------  --------------- 
Contracts > $1million in 2017 
-------------------------------------------------  ---------------  --------------- 
Nerine Support Services Limited                              2,700            6,215 
=================================================  ===============  =============== 
                                                             2,700            6,215 
=================================================  ===============  =============== 
 
Contracts < $1million in 2017 
-------------------------------------------------  ---------------  --------------- 
Abbey Court trading Company Limited                            349              183 
-------------------------------------------------  ---------------  --------------- 
Charismond Nigeria Limited                                      31               20 
-------------------------------------------------  ---------------  --------------- 
Cardinal Drilling Services Limited                             621            5,632 
-------------------------------------------------  ---------------  --------------- 
Keco Nigeria Enterprises                                        73               27 
-------------------------------------------------  ---------------  --------------- 
Ndosumili Ventures Limited                                     554            1,036 
-------------------------------------------------  ---------------  --------------- 
Oriental Catering Services Limited                             211              284 
-------------------------------------------------  ---------------  --------------- 
ResourcePro Inter Solutions Limited                              1               77 
-------------------------------------------------  ---------------  --------------- 
Berwick Nigeria Limited                                          -               28 
-------------------------------------------------  ---------------  --------------- 
Montego Upstream Services Limited                                -           11,704 
-------------------------------------------------  ---------------  --------------- 
Nabila Resources & Investment Limited                            -                5 
-------------------------------------------------  ---------------  --------------- 
Helko Nigeria Limited                                            -              411 
=================================================  ===============  =============== 
                                                             1,840           19,407 
=================================================  ===============  =============== 
Total                                                        4,540           25,622 
=================================================  ===============  =============== 
 

* Nerine charges an average mark-up of 7.5% on agency and contract workers assigned to Seplat. The amounts shown above are gross i.e. it includes salaries and Nerine's mark-up. Total costs for agency and contracts during the half year ended 30 June 2017 is US$2.6 million.

Notes to the interim condensed consolidated financial statements continued

22c. Balances

The following balances were receivable from or payable to related parties as at 30 June 2017:

 
Prepayments / receivables                         As at 30 June 2017  As at 31 Dec 2016 
                                                  ------------------  ----------------- 
                                                               $'000              $'000 
================================================  ==================  ================= 
Entities controlled by key management personnel 
------------------------------------------------  ------------------  ----------------- 
Cardinal Drilling Services Limited                             6,200              6,211 
================================================  ==================  ================= 
                                                               6,200              6,211 
================================================  ==================  ================= 
 
 
Payables                                          As at 30 June 2017  As at 31 Dec 2016 
                                                  ------------------  ----------------- 
                                                               $'000              $'000 
================================================  ==================  ================= 
Entities controlled by key management personnel 
------------------------------------------------  ------------------  ----------------- 
Cardinal Drilling Services Limited                               621              1,009 
------------------------------------------------  ------------------  ----------------- 
Abbey Court Petroleum Company Limited                            291                  - 
------------------------------------------------  ------------------  ----------------- 
Charismond Nigeria Limited                                        21                  - 
------------------------------------------------  ------------------  ----------------- 
Ndosumili Ventures Limited                                       457                  - 
------------------------------------------------  ------------------  ----------------- 
ResourcePro Inter Solutions Limited                                1                  - 
------------------------------------------------  ------------------  ----------------- 
Nerine Support Services Limited                                2,616             11,411 
------------------------------------------------  ------------------  ----------------- 
Montego Upstream Services Limited                                  -             11,540 
================================================  ==================  ================= 
                                                               4,007             23,960 
================================================  ==================  ================= 
 

23. Commitments and contingencies

23a. Operating lease commitments - Group as lessee

The Group leases drilling rigs, buildings, land, boats and storage facilities. The lease terms are between 1 and 5 years. The operating lease commitments of the Group as at 30 June 2017 are:

 
Operating lease commitments                         As at 30 June 2017  As at 31 Dec 2016 
                                                    ------------------  ----------------- 
                                                                 $'000              $'000 
==================================================  ==================  ================= 
Not later than one year                                            119                119 
--------------------------------------------------  ------------------  ----------------- 
Later than one year and not later than five years                  271                271 
==================================================  ==================  ================= 
                                                                   390                390 
==================================================  ==================  ================= 
 

23b. Contingent consideration

As part of the purchase agreement of OML 53, a portion of the consideration is contingent on the performance of the producing asset. There will be additional cash payments to the previous owners should the oil price rise above US$90/bbl in the three year period following the acquisition date.

Significant unobservable valuation inputs are shown below:

   Discount rate        15.45% 

A significant increase or decrease in the discount rate would result in a lower/ (higher) fair value of the liability.

The fair value of the contingent consideration determined at 31 December 2016 reflects the current and projected crude oil prices, amongst other factors and a fair value adjustment has been recognised in profit or loss.

A reconciliation of the fair value of the contingent consideration liability is provided below:

 
                                                                                                As at 30 June 2017 
                                                                                                ------------------ 
                                                                                                             $'000 
==============================================================================================  ================== 
Initial fair value of the contingent consideration at acquisition date                                      10,427 
----------------------------------------------------------------------------------------------  ------------------ 
Unrealised fair value changes recognised in profit or loss during year ended 31 December 2016                1,613 
==============================================================================================  ================== 
Financial liability for the contingent consideration as at 31 December 2016                                 12,040 
==============================================================================================  ================== 
Fair value adjustment as at 30 June 2017                                                                       897 
==============================================================================================  ================== 
Contingent consideration as at 30 June 2017                                                                 12,937 
==============================================================================================  ================== 
 

23c. Contingent liabilities

The Group is involved in a number of legal suits as defendant. The estimated value of the contingent liabilities for the period ended 30 June 2017 is US$ 174 million (2016: US$15.5 million). No provision has been made for this potential liability in these financial statements. Management and the Group's solicitors are of the opinion that the Group will suffer no loss from these claims.

24. Events after the reporting period

There was no significant event after the reporting date which could have a material effect on the state of affairs of the Group as at 30 June 2017 and on the profit or loss for the half year ended on that date, which have not been adequately provided for or disclosed in these financial statements.

25. Compliance with FRC Rule 1

In compliance with the regulatory requirement in Nigeria that the CFO, who signs the Annual Report and Accounts, must be a member of a professional accountancy body recognised by an Act of the National Assembly in Nigeria, the CFO of Seplat, Roger Brown, has been granted a waiver by the Financial Reporting Council of Nigeria to sign the accounts of the Group.

26. Reclassification

Certain comparative figures have been reclassified in line with the current year's presentation.

General information

 
Company secretary               Mirian Kachikwu 
------------------------------ 
Registered office and business 
Address of directors            25a Lugard Avenue 
                                 Ikoyi 
                                 Lagos 
                                 Nigeria 
Registered number               RC No. 824838 
FRC number                      FRC/2015/NBA/00000010739 
Auditors                        Ernst & Young 
                                 10(th) & 13th Floor, UBA House 
                                 57 Marina Lagos. 
Registrars                      DataMax Registrars Limited 
                                 7 Anthony Village Road 
                                 Anthony 
                                 P.M.B 10014 
                                 Shomolu 
                                 Lagos, Nigeria 
Solicitors                      Abraham Uhunmwagho & Co 
                                 Adepetun Caxton-Martins Agbor & Segun ('ACAS-Law') 
                                 Austin and Berns Solicitors 
                                 Chief J.A. Ororho & Co. 
                                 Consolex LP 
                                 Freshfields Bruckhaus Deringer LLP 
                                 G.C. Arubayi & Co. 
                                 Herbert Smith Freehills LLP 
                                 J.E. Okodaso & Company 
                                 Norton Rose Fulbright LLP 
                                 Ogaga Ovrawah & Co. 
                                 Olaniwun Ajayi LP 
                                 O. Obrik. Uloho and Co. 
                                 Streamsowers & Kohn 
                                 Thompson Okpoko & Partners 
                                 V.E. Akpoguma & Co. 
                                 Winston & Strawn London LLP 
Bankers                         Citibank Nigeria Limited 
                                 First Bank of Nigeria Limited 
                                 HSBC Bank 
                                 Skye Bank Plc 
                                 Stanbic IBTC Bank Plc 
                                 Standard Chartered Bank 
                                 United Bank for Africa Plc 
                                 Zenith Bank Plc 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR OKADDDBKBKOB

(END) Dow Jones Newswires

July 27, 2017 02:02 ET (06:02 GMT)

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