Seplat Energy Share Discussion Threads

[podgyted] 06/3/2019 10:59

GMP

"Seplat Petroleum (SEPL LN); BUY, £2.70:
4Q18 results – FY18 WI production was 49,867 boe/d (GMP FEe: 51.3 mboe/d)
including 25,669 bbl/d oil production (GMP FEe: 26.1 mbbl/d). This compares with FY18 production guidance of 48-55 mboe/d. Uptime at Forcados was 85% (GMP FEe: 18%) with 8% losses (GMP FEe: 8.2%) over the period.
The company has declared a further US$0.05/sh dividend on top of the previously announced US$0.05 per share dividend.
FID at ANOH has now been taken but the link to Escravos is now anticipated to be completed in 2Q19.
FY19 production guidance has been set at 49-55 mboe/d (GMP FEe: 54.5 mboe/d) including 24-27 mbbl/d of liquid (GMP FEe: 29.8 mbbl/d).
FY18 operating cash flow was US$501.5 mm (GMP FEe: US$438 mm) with cash outflow from investment activities of US$31.2 mm (GMP FE: US$56 mm), resulting in a strong net cash position at YE18 of US$135 mm (GMP FEe: US$87 mm).
YE18 2P reserves were 480.5 mmboe (YE17: 477.3 mmboe).
A conference call is taking place today at 08:30 am UK time (tel: .
Market reaction: positive on strong cashflow and net cash. The FID of ANOH is another positive but was probably largely anticipated.
Seplat continues to be a value name with strong execution capabilities. The dividend yield at the current price is c. 6%. BUY."

[podgyted] 06/3/2019 07:41

Looks good.

EPS of @20p gives a PER of 6.

15c of dividends this year gives a yield of 9% (10c excluding special).

Wish they'd finish that bloody pipeline.

[podgyted] 10/1/2019 21:12

Don't see why not.

[alamaison5] 10/1/2019 15:58

Trading above 120p hey! 140p for sure now, perhaps 150p?

[alamaison5] 10/1/2019 14:39

Thanks for the BBC doc. In for the ride! Also, they did receive an offer a few years back...Can't say more...

[podgyted] 05/1/2019 11:00

Seplat is covered in a video dated 18th October 2018 - "Gearing up to develop Nigeria's gas fields.

[podgyted] 30/10/2018 13:18

GMP First Energy

"Seplat Petroleum (SEPL LN); BUY, £3.25:

3Q18 results – 3Q18 WI production was 50.3 mboe/d (GMP FEe: 54 mboe/d)including 26.5 mbbl/d oil production (GMP FEe: 28.6 mbbl/d). FY18 production guidance of 48-55 mboe/d is reiterated. Uptime at Forcados was 88% (GMP FEe: 85%) with 7% losses (GMP FEe: 10%) over the period.

The company has declared a further US$0.05/sh dividend on top of the previously announced US$0.05 per share dividend.

FID at ANOH and the completion of the connection to the Escravos pipeline continues to be expected in 4Q18.

3Q18 operating cash flow stood at US$141 mm, ahead of our expectations (US$118 mm) with 3Q18 Free Cash Flow of US$121 mm (GMP FEe: US$80 mm). Positive movement of working capital (c+US$20 mm) on further reduction of receivables only partially explains the difference. Net cash at the end of September was US$84 mm (GMP FEe: US$39 mm).

Market reaction: while 3Q18 production is below our expectations, losses were less than we had modelled and the underlying Free Cash Flow generation of the
company continues to significantly beat our expectations. The overall dividend for 2018 is in line with our expectations.

Seplat continues to be a value name with strong execution capabilities. The dividend yield at the current price is 5.6%. BUY."

[smaf] 30/10/2018 11:16

@ ROBIZM
It's a PUT so sunken cost.

[robizm] 30/10/2018 08:03

Oil hedge not the best

[podgyted] 30/10/2018 07:49

Another 5c dividend - seems on track for the year to beat revenue targets.

Pipeline "before year end". I guess that will have to do.

[podgyted] 29/10/2018 12:48

Well presuming Q3 results out tomorrow or very shortly after.

Still looks good value even allowing for Nigerian location. Elevated oil prices should continue to be of benefit and increasing gas production should keep the tax charge under control. If cash generation is continuing as per Q2 I think we'll see a bit of a jump.

Hoping for news on pipeline - they should be able to give a date by now.

[podgyted] 22/9/2018 12:32

hxxps://nigeriaoilgas.com.ng/2018/08/10/gas-as-key-enabler-to-diversify-nigerian-economy-nwosu/

[podgyted] 22/9/2018 12:19

cartonet 18/9/18 - From ELA thread "ELAN back from the depths (again !!)"

Dear Subscriber,

This is a weekly insight of news and events in the Power, Oil and Gas industry in Nigeria and around the world. This roundup is for the week ended August 24, 2018.

If you are an Oil and Gas Investor or stakeholder then this Newsletter is tailor-made for you. You can also subscribe to our other Newsletters and have some of the best insights from the world of investing in Nigeria, straight in your mailbox.

We also love feedback, so, do send us some as we continue to make this Newsletter informative and useful to you our subscribers.



Cloud of darkness on Oil blocks renewal
In an earlier newsletter, we discussed the pending renewal of a number of upstream leases in 2017/2018. The renewal of assets is a risk for oil and gas operators as they could be revoked or approval gets delayed despite the assurances the Petroleum Act offers.

The Petroleum Act describes the conditions to qualify for asset renewal which includes payment of outstanding royalty debts and liabilities to the government.

Recently, the Directorate of Petroleum Resources (DPR), the agency charged with administering licenses and directly under the supervision of the Minister of Petroleum has reported earnings of $1 Billion from the renewal of Oil Mining Leases (OMLs) and Oil Prospecting Licenses (OPLs) in 2017.

The details of the assets renewed, amount received, and owners of the renewed leases are unavailable. The syndicated press release by DPR was decidedly ambiguous and incoherent.

Malfeasance thrives in darkness. Did all the companies meet the prescribed criteria? Were there any change is asset sizes? Were the renewal fees the best the country can get? Many questions, no answers. DPR even brushed away questions from the House of Representatives.

The industry grows with transparency, with public information on renewed assets, businesses, SMEs, financial institutions, NGOs and the public at large can make better decisions, and the industry thrives.

Katsina Refinery: Delay or Denial
A few weeks ago, we outlined our thoughts on the feasibility of the Katsina refinery and Niger pipeline project. Our analysis suggested the project may be feasible given the economics of the upstream company driving the project.

We may have missed a few things there because the company in question, Savannah Petroleum has now signed an ‘early production agreement’ with the Nigerien government to use the Chinese built Soraz refinery. This is only a few weeks after the same Nigerien government signed a Memorandum of Understanding (MoU) with its Nigerian counterpart.

From our analysis, this may be a temporary setback for the Katsina refinery given the limited size of the Soraz refinery, Savannah Petroleum has seen stunning success in its exploration activities in Niger recently prompting the decision to fast-track development. Katsina might work if Soraz cannot handle increased capacity, but then the Chinese might just expand to accommodate increased production capacity. We will be watching developments on this.

Seplat – The Gas and Oil Company
Seplat Petroleum is transforming to a gas company with some oil. Since acquiring Shell’s stake in some Western Niger Delta assets, the company has blossomed from an upstart to a thriving, result-oriented business, continuously delivering value to stakeholders.

Becoming a gas company may have been by circumstance as the assets they have acquired have mostly been gas rich but they have doubled down, developing a reputation for quick project delivery. It’s a peculiarly integrated and diversified indigenous company with a balance of upstream oil, upstream gas and midstream gas portfolios.

The company has moved eastward of its current base as it seeks to develop the Assa North Ohaji (ANOH) gas-rich fields. Assa North is actually owned by Shell/NNPC while Ohaji South is owned by Seplat/NNPC (bought Chevron’s stake).

Before Seplat’s acquisition of Chevron’s stake in Ohaji South, Shell was designated to develop midstream facilities for ANOH but they slept on it. With Seplat, the sprightly and more ambitious company in play, they were better positioned. Now, it’s going to develop ANOH’s 300 mscf/d processing facility with NNPC’s subsidiary, Nigerian Gas Processing and Transportation Company via a wholly midstream vehicle.

Seplat’s midstream strategy is curated to take advantage of tax benefits. With ANOH and potential future expansion, a central processing facility (CPF) is being established in the east, a critical thrust of the 2008 Gas Master Plan.

Location is very ideal too as it is proximous to the 42 inches Oben – Obiafu/Obikrom interconnector pipeline. We assume the completion of the OB-OB3 is a conditions precedent for the ANOH project. Overall, the ANOH project provides a huge benefit to everyone – domestic gas market, Seplat, NNPC, FIRS.

Eland Oil – Rising Star
UK headquartered Eland Oil is top contender for our Independent Oil Company of the year. Its meteoric rise in the last 12 months is unrivalled in the industry. A successful 4 well campaign has given rise to 100% increase in oil production (from 12,000 bopd to 23,000 bopd), alternative evacuation options have been secured, OPEX significantly reduced above peer facility uptime recorded and to top it an 80% increase in share price on the London AIM.

An investment of $1 Million in March 2017 would have yielded $1.8 Million within one year. Exceptional performance, by any standard.

Its future is bright. Improved cashflow has given the company headroom to pursue the development of Ubima field, a farmed-In marginal field owned by All Grace Energy Limited. With Gbetiokun and Ubima fields in the horizon, Eland is positioned to accelerate beyond its peer companies in the nearest future.

NB: Professor Adebulugbe, a former Special Adviser on Energy to President Obasanjo is the public face of All Grace Energy Limited, the owner of the Ubima field.

An Encore on the broken power market

We are publishing again our recent commentary on the current broken power market

Never in our history have we witnessed the current public mudslinging between private operators and government. A frustrated Minister of Power launched a public tirade against the DISCos (Electricity Distribution Companies) perceived inefficiencies and the Discos replied with a very uncomplimentary published statement.

As this newsletter has warned repeatedly in the past, the power market is significantly broken. Broken beyond normal repair, hence the frustration on both sides as solutions seem remote and beyond the parties. Yes, the solution is beyond the Power Minister or the Discos. It’s with the President.

The simple but key reason for the state of the market is lack of enforcement. Seems very simplistic but enforcement of the rules (of law) is the pivot on which economic prosperity or in this case a successful market stands.

The problem of lack of meters, transformers etc. are ‘chicken and egg’ as investments would only follow an orderly and predictable market. Enforcement of contracts: Discos and Customers, Discos and NBET, NBET and GENCOS is the key to repairing the market but it takes a steely will from the top of the hierarchy to address the issue.

Discos have poor revenue collection metrics because of managerial inadequacies and lack of consequence for stealing power or avoiding payments. The enforcement of the contract between the DISCo and customers is an onerous job but very critical to the health of the market.

The President needs to consider this seemingly simple issue as a priority, emphasizing to the nation the importance of payments, rallying round law enforcement and penalties on government-owned agencies and individual customers. What is a market if the rules cannot be enforced? And enforcement is sadly beyond the Minister of Power of Disco’s capabilities.

With enforcement of rules and contracts (fuel contracts, PPAs, Vesting Contracts, Transmission tariffs, MYTO) across the chain, losses will crystallize at the weak nodes. NBET may become insolvent, MYTO reviews may not be totally cost reflective but the process isolates the areas that now need interventions and temporary subsidies.

The current process of throwing subsidies across the power value chain is creating a moral dilemma and perpetuating indiscipline. The World Bank which currently supports the power sector may attach conditionalities that encourage enforcement of rules in its future interventions.
Without the rules, chaos beckons.

[podgyted] 14/8/2018 09:38

GMP First Energy

"Seplat Petroleum (SEPL LN); BUY, £2.60: Positive progress at ANOH – Seplat and NNPC have signed a shareholder and share
subscription agreement so that NNPC will hold 50% of the JV handling the processing of gas produced from OML 53 and OML
21. Market reaction: slightly positive as this is an important step to FID the project. Our Unrisked NAV for ANOH is £0.26 per
share. We currently carry the project at £0.13 per share (50% CoD)"

[podgyted] 13/8/2018 19:34

Further movement on gas expansion:-

[podgyted] 02/8/2018 17:38

Thinking along those lines myself.

[rolo7] 31/7/2018 21:04

cheers not got to bottom of report yet! The oil hedging of 3million@50$ for h2 v 3.5@40$ for h1 will boost revenue so double 6p to get 18p i think!

[podgyted] 31/7/2018 19:08

If you pick-up their interim report from their website it again seems to be in Nigerian whatever, but if you go to page 50 it's then re-done in USD.

The eps is given as 8 cents or 6p by my calculation - doubling that would give 12p and a PER of @12.

That's not cheap but it does seem to me good value as it's growing fast and I'm expecting a better H2 - most interested in the prospects for its gas - captive market and lower tax rate. Its huge cash flow means that when it decides to take off the brakes on Capex it has some very good opportunities.

[rolo7] 31/7/2018 10:48

Currency on balance sheet is nigerian be careful. I made it just 5p eps first half no so cheap?

[rolo7] 30/7/2018 15:29

yep back in last week at 145p

[podgyted] 30/7/2018 13:47

Decided to stick around and added some. Incredible cash flow.

Pipeline completion put back to Q4 2018 but I can live with that based on 100% capability increase at port.

[podgyted] 04/7/2018 18:02

Not convinced thoroughly by SEPL.

Decided to keep until interims at end of July and re-evaluate then. Should do well but it's all about execution and political stability.

[rolo7] 04/7/2018 16:46

Yep got mine today, not holding these at moment, were sepl pipelines of line for a while?

[podgyted] 04/7/2018 14:04

Seems I have finally got my dividend.

"I can now confirm the dividend cheque has finally arrived and will be credited to your ISA account today."

I'll just add 4 weeks to the payment date in future