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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Seplat Energy Plc | 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 | |
---|---|---|---|---|---|---|---|---|---|---|
8.75 | 5.83% | 158.75 | 158.00 | 159.50 | 159.50 | 147.50 | 150.50 | 139,640 | 16:35:17 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Oil & Gas Field Services,nec | 696.87B | 54.58B | 92.7479 | 0.02 | 929.74M |
TIDMSEPL
RNS Number : 4186V
Seplat Petroleum Development Co PLC
14 April 2021
14 April 2021
Seplat Petroleum Development Company Plc
2020 Annual Report and Notice of AGM
Seplat Petroleum Development Company Plc ("Seplat" or the "Company") confirms it has today published its Annual Report and Accounts for the year ended 31 December 2020 together with the notice of the Company's eight Annual General Meeting ("AGM") and forms of proxy. The Company will hold its AGM at 11:00am (local time) on Thursday 20 May 2021 at 16a Temple Road (Olu Holloway), Ikoyi, Lagos, Nigeria.
In accordance with Listing Rule 14.3.6 copies of the Company's Annual Report and Accounts for the year ended 31 December 2020, the Notice of AGM and proxy forms have also been submitted to the FCA for publication through the document viewing facility of the National Storage Mechanism and will shortly be available for inspection at http:// www.morningstar.co.uk/uk/NSM
In accordance with Disclosure Guidance and Transparency Rule ("DTR") 6.3.5R(3), copies are available on the Company's website, www.seplatpetroleum.com
The Company's audited financial statements and extracts of the management report, were included in the Company's Final Results announcement on 1 March 2021. That information, together with the Appendices to this announcement, which contains the following additional information that has been extracted from the 2020 Annual Report, constitutes the material required for the purposes of compliance with DTR 6.3.5 only:
-- the Directors' Responsibilities Statement; -- a description of principal risks and uncertainties that the Company faces; and -- related party transactions.
This announcement should be read in conjunction with and is not a substitute for reading the full 2020 Annual Report. Page and note references in the text below refer to page numbers and notes in the 2020 Annual Report and terms defined in that document have the same meanings in these extracts.
Enquiries
Seplat Petroleum Development Company plc Emeka Onwuka, CFO +234 (0) 1 277 0400 Edith Onwuchekwa, Company Secretary/General Counsel Carl Franklin, Head of Investor Relations Ayeesha Aliyu, Investor Relations Chioma Nwachuku, GM - External Affairs and Communications FTI Consulting Ben Brewerton / Sara Powell +44 (0) 203 727 1000 seplat@fticonsulting.com
Notes to editors
Seplat Petroleum Development Company Plc is a leading indigenous Nigerian energy 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/
Appendices
Appendix A: Statement of Directors' responsibilities
The following Statement of Directors' responsibilities is extracted from the 2020 Annual Report and Accounts (page 142).
The Companies and Allied Matters Act, 2020, requires the Directors to prepare financial statements for each financial year that gives a true and fair view of the state of financial affairs of the Group at the end of the year and of its profit or loss. The responsibilities include ensuring that the Group:
1. keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Group and comply with the requirements of the Companies and Allied Matters Act, 2020;
2. establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and
3. prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgements and estimates and are consistently applied.
The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with International Financial Reporting Standards (IFRS), the requirements of the Companies and Allied Matters Act, 2020 and Financial Reporting Council of Nigeria Act, No. 6, 2011.
The Directors are of the opinion that the financial statements gives a true and fair view of the state of the financial affairs of the Group and of its financial performance and cash flows for the year. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.
Nothing has come to the attention of the Directors to indicate that the Group will not remain a going concern for at least 12 months from the date of this statement.
Signed on behalf of the Directors by:
A.B.C Orjiako R.T. Brown
Chairman Chief Executive Officer
FRC/2014/IODN/00000003161 FRC/2014/ ANAN/00000017939 1 March 2021 1 March 2021
Appendix B: Principal risks and uncertainties
The following principal risks and uncertainties table is extracted from the 2020 Annual Report and Accounts (pages 30 to 36).
The implementation of our strategy can be hindered by various risks and uncertainties. The risks that the Board considers most significant are described here.
Operational risks Field operations and Third-party infrastructure HSSE risks project deliverability downtime ------------------------------- ------------------------------ Description Description Description Failure to manage An over-reliance Oil and gas activities operational activities on third-party operated carry significant in line with planned transportation infrastructure levels of HSSE risks expectations can lead can expose the Company if not properly managed. to production misses, to an extended period As activity levels project delays and of production being continue to increase cost overruns, high shut in. there is a strong production costs and focus on preventing earlier than expected major environmental field decommissioning. (including the emerging Risk also expanded climate change - GHG to cover the emerging emissions risk), health OPEC quota restriction or safety incidents. risk on production, resulting in production shut-ins. ------------------------------- ------------------------------ Mitigation Mitigation Mitigation Focus on risk management Work is ongoing to Deployment of an at planning phase secure a second export HSSE Management System and mitigation plans line to complement in line with best activated. Compulsory the Trans Forcados practices. Monitoring 'peer-to-peer' review Pipeline. Continue and reporting of HSSE for high-value projects to explore export performance scorecards and better project via barging as a back-up at management and management techniques. option in extreme Board levels. Our Protracted land acquisition, cases. Have two contingency HSSE systems and process preparation and rig tanks in Amukpe for are subjected to independent startup have been partial storage during review and identified contributory factors shut-in over shorter improvement initiatives which have received periods. More tanks are deployed. Continual focused attention are planned. Additional focus on HSSE training and significant process plans to scope FEED/DED and initiatives on improvements and improved of a new export line incidence prevention. communications with in the coming year Emergency Response JV partner and approving 2021. plan set for any eventuality regulators to mitigate and comprehensive delays. Use of smart/ Incident Review panels intelligent wells to identify and channel to improve recovery lessons learnt to and improved rig performance improvement activities. monitoring and reporting Focus on the delivery to manage NPTs. on projects earmarked to reduce and or eliminate gas flaring as spelt out under the Company's
'gas flares out roadmap'. ------------------------------- ------------------------------ KPI/Performance metric KPI/Performance metric KPI/Performance metric Net working interest Net working interest HSSE scorecards production production LTIF Operating costs per Days downtime TRIR boe EBIT ------------------------------- ------------------------------ Strategic pillars Strategic pillars Strategic pillars 1, 2, 3 2, 3 2, 3, 5 ------------------------------- ------------------------------ Assessment Assessment Assessment Very high Very high High ------------------------------- ------------------------------ Trend Trend Trend Steady. We continue Steady. Remarkably Steady. Though the to refine our project improved uptime of risk is inherent, management approach Forcados export system. we will continue to for improved speed However, risk trend deploy our HSSE risk of delivery and efficiency, is Steady, even though management in line conclude the integration there is no near term with best practices of the newly acquired line of sight for and with strong emphasis Eland Assets into an alternative evacuation on prevention. our business, consolidate line, in the sudden performance across event of prolonged board, maximise production, outage of the TFP. maintain a strong Alternative line (AEP) balance sheet, and is now scheduled for strategically position Q2 2021 delivery. the Company for future growth. ------------------------------- ------------------------------ Operational risks continued Infectious diseases Sustaining E&A programme outbreak in Seplat (e.g. Covid-19) ------------------------------ Description Description Risk of an index Exploration and appraisal case manifesting in activities carry significant Seplat offices or levels of subsurface field locations. This risk. Sustained E&A leads to an unsuccessful drilling failure will initial control of impact the Company's an index case (probably ability to organically resulting in communal replace reserves and spread of the disease production. in the Seplat community as a result of late detection of secondary contact cases which may have had close contacts with index case or close contacts from other external primary sources). Risk also covers supply chain disruptions emanating from the pandemic i.e. the extent to which the disease will have an impact on all key projects of the Company (including ANOH) as designed in the work programme (impacting the supply chain and major contractors scheduled to deliver in a few months). ------------------------------ Mitigation Mitigation Appointment of the Strict compliance COVIMOG (monitoring with reservoir management and response team) guidelines. Building to assess the dynamics internal capacity of the virus and report with skilled sub-surface to leadership weekly. expertise. Drill a Install hand washing minimum of two exploration and sanitiser dispensers wells, as well as across all business continuous M&A work locations. Avoid large to secure available crowd and physical opportunities at the meetings of more than right price. 50 people. Avoid external meetings; encourage online meetings. Encourage staffs and other tenants on the building on washing of hands and use of sanitiser. Suspend all non critical travel plans and in the event of critical travels, put in place mandatory self quarantine and testing. Put in place mandatory PCR testing for all field operations. LT alignment on business scenarios to gain stability post-epidemic. Have a Business Continuity Plan in place to curb post-economic recovery challenges. Run an operations impact assessment and trigger identification of quick remediation strategies/wins across the business. Manage press/publicity and communication to avoid mis-communication/ wrong press. Declare work from home with effective IT support. ------------------------------ KPI/Performance metric KPI/Performance metric HSSE scorecards Reserve replacement LTIF TRIR ------------------------------ Strategic pillars Strategic pillars 1, 2, 3, 4 1, 2, 3, 5 ------------------------------ Assessment Assessment High Very high ------------------------------ Trend Trend Rising. Trend is Steady. High grading rising given the second our exploration portfolio wave of the pandemic through a thorough with its attendant prospect screening contagious spread exercise. In the near and the notable cases term, plan is to commence recorded. The Company exploration drilling will sustain the deployment campaign in the West. of our HSE risk management in line with best practices and with strong emphasis on reducing the impact of this unprecedented pandemic. ------------------------------ External risks Niger Delta stability Stakeholder management Geopolitical risk and security relationships -------------------------------- -------------------------------- Description Description Description The Company operates Failure to manage Nigeria has at times in a region where stakeholders can result in its history faced security incidents in business disruptions political uncertainties such as kidnappings, and interference. and threats such as vandalism and criminal The Company prioritises terrorism aimed at attacks on O&G installations the effective management de-stabilising and can occur. of relationships with undermining the orderly all stakeholders including and effective rule host communities, of central government. JV partners, government, regulatory bodies and shareholders. -------------------------------- -------------------------------- Mitigation Mitigation Mitigation Continuous security Successful operation Scenarios and response monitoring and intelligence of the GMOU agreement options plan set. work. Quick mechanism with host communities, Crisis management for security advisory periodic engagement team in place for to staff and movement and feedback forums. high alert political restriction for high Tailored CSR programmes, periods. Continue alert situations. capacity building to partner/network Active participation and infrastructure with security stakeholders in the industry pressure developments with and share intelligence groups to find lasting the host communities. regarding security. solution. Sustain local content Business continuity development with priority plans actioned in to community contractors. light of current geo-political Organisational focus situation. and clear strategy to deliver shareholder value pursued by the Board and management. Corporate governance, transparency and proactiveness in dealings with regulators and JV partners. -------------------------------- -------------------------------- KPI/Performance metric KPI/Performance metric KPI/Performance metric LTIR Net working interest Be a highly responsible TRIR production corporate citizen
Security incidents LTIR Maximise production Operating cash flow TRIR and cash flows from Host community incidences existing assets Commercialise and produce gas reserves -------------------------------- -------------------------------- Strategic pillars Strategic pillars Strategic pillars 2, 5 2, 3, 5 1, 2, 5 -------------------------------- -------------------------------- Assessment Assessment Assessment Very high High High -------------------------------- -------------------------------- Trend Trend Trend Steady. Efforts by Steady. We continue Steady. the Government and to enjoy good working industry pressure relations with our groups, aimed at enhancing stakeholders. security in the region seems to be paying off as there was a significant drop in targeted oil and gas facilities attacks in the region in year 2020. We will continue our monitoring and vigilance. -------------------------------- -------------------------------- Financial risks Oil price volatility Changes to tax status Availability of capital and legislation ------------------------------- -------------------------------- Description Description Description Oil prices have exhibited If the tax regime/legislation The oil and gas industry a history of volatility under which the Company is highly capital and can fluctuate operates its assets intensive. Significant sharply in line with were to change, profitability amounts of capital external factors. may be impacted. are required to continue development activities and fund M&A. Non funding of cashcalls by JV partners impacts activities and liquidity. ------------------------------- -------------------------------- Mitigation Mitigation Mitigation Hedging continues Perform evaluation Emphasis on compliance to be our price risk of business plan and with requirements management tool. Price performance metrics of the JV operating sensitisation on project exclusive of tax benefits. agreement for effective/strict economics and cost Project economics JV partner concurrence. discipline for capital were determined on Board review and approval projects sanctioning. maximum tax basis of financial strategy Aggressive focus on to mitigate the impact and debt portfolio cost reduction. of the now expired management with strong pioneer tax status. banking relationships. Impact assessment of potential tax legislature monitored at the Board level. ------------------------------- -------------------------------- KPI/Performance metric KPI/Performance metric KPI/Performance metric Realised oil price Effective tax rate JV receivables Operating cash flow Tax status Capex New M&A activities ------------------------------- -------------------------------- Strategic pillars Strategic pillars Strategic pillars 2 2, 3 2, 3, 5 ------------------------------- -------------------------------- Assessment Assessment Assessment High High Very high ------------------------------- -------------------------------- Trend Trend Trend Decreasing. In the Steady. PIB is going Decreasing. JV partners year 2020, we kept through legislative continues to remain focus of our price process. Versions current in paying risk management policy in circulation currently cash calls. to protect the Company's being reviewed to cash flow stream from assess the impact downside scenarios. on Seplat valuation. We will also continue to take hedge positions and apply cost reduction strategies. ------------------------------- -------------------------------- Financial risks continued Cost control risk Liquidity Foreign exchange risk ----------------------------------- --------------------------- Description Description Description Cost reduction remains Liquidity risk is The Company is exposed central to the Company's the risk that the to exchange rate risk current operating Company will not be to the extent that strategy. High operating able to meet its financial balances and transactions cost and ineffective obligations as they are denominated in capital cost control fall due. a currency other than negatively impacts the US Dollar. operating cash flows and profitability. ----------------------------------- --------------------------- Mitigation Mitigation Mitigation Comprehensive budgeting Manage liquidity The Company has options process approved by risk by ensuring that to manage its foreign the joint venture sufficient funds are exchange exposure partner and the Board. available to meet including financial Clear cost management commitments as they hedge instruments targets. Grading of fall due. Uses both such as forward exchange portfolio opportunities long-term and short-term contracts. and project ranking cash flow projections for capital allocation. to monitor funding Focus on reducing requirements for activities drilling costs at and to ensure there well design phase. are sufficient cash Cost monitoring and resources to meet periodic reporting. operational needs. Focus on effective Cash flow projections contracting strategies take into consideration for cost reduction. the Company's debts 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. ----------------------------------- --------------------------- KPI/Performance metric KPI/Performance metric KPI/Performance metric Operating cost per Operating cash flow Operating cash flow boe Capex Capex EBIT Capex Well costs ----------------------------------- --------------------------- Strategic pillars Strategic pillars Strategic pillars 2, 3, 5 2 2, 3 ----------------------------------- --------------------------- Assessment Assessment Assessment High Medium High ----------------------------------- --------------------------- Trend Trend Trend Steady. Cost discipline Steady. Improved Steady. Historically, remains key focus uptime of TFP; improved the Company holds of the business. JV cash call payment; majority of its cash oil price rally; and and cash equivalent strategic debt refinancing in US Dollar. Gas all have greatly improved contracts are indexed
liquidity risk. in US Dollar. ----------------------------------- --------------------------- Strategic risks Portfolio concentration Merger & Acquisition Bribery and corruption risk (M&A) risk risk ------------------------------- ----------------------------- Description Description Description High dependency on Growth through M&A Bribery and corruption a concentrated portfolio activities is part presents a risk throughout of producing blocks of Seplat's strategy the global oil and and limited number to pursue a focused gas industry and represents of wells can leave acquisition and farm-in. an ongoing risk to the Company more susceptible M&A deals and transactions any oil and gas company. to declining long-term come with significant growth and reserves risk including structural, depletion. commercial and integration risks. There is also the risk of non achievement of acquisition targets due to highly competitive landscape. ------------------------------- ----------------------------- Mitigation Mitigation Mitigation Focus on portfolio New business development Extensive training expansion strategy unit is always looking on anti-bribery and from the Board level for the right opportunities corruption. Embedding to diversify current for Seplat. Decision corporate governance portfolio. Integrated review board (DRB) principles with key long-term planning process is in place focus on areas of on crude oil and gas to ensure deals are the business which business. properly vetted and may be more susceptible adequate due diligence to corruption such done on new opportunities. as the contracting The DRB ensures the and procurement process. commercial, structural, Processes exist to KYC and integration guide dealings with risks are fully considered public officials. and addressed with mitigation plan approved and in place prior to deal closing. ------------------------------- ----------------------------- KPI/Performance metric KPI/Performance metric KPI/Performance metric Successful execution Successful execution Whistleblowing reports of new acquisition of new acquisition Number of disciplinary and farm-in opportunities and farm-in opportunities cases ------------------------------- ----------------------------- Strategic pillars Strategic pillars Strategic pillars 2, 3 1, 3, 5 5 ------------------------------- ----------------------------- Assessment Assessment Assessment High Very high Very high ------------------------------- ----------------------------- Trend Trend Trend Steady. The Company Steady. DRB process Decreasing. As geographical is in build/transform in place to vet opportunities location continues phase. and deals. Risk trend to be susceptible steady following ongoing to corruption, risk integration of Eland trend changed from Oil and Gas Plc, as steady to decreasing. well as ongoing strategy to acquire more strategic assets. M&A landscape remains competitive. ------------------------------- ----------------------------- Strategic risks continued Loss of key employees Fraudulent activity Information security risk risk ----------------------------- ------------------------------ Description Description Description The oil and gas industry Fraudulent activity Potential cyber attacks is very specialised presents a risk throughout and information technology in certain areas and the global oil and security breaches there is competition gas industry and represents could result in loss within the industry an ongoing risk to or compromise of sensitive to secure talent and any oil and gas company. proprietary information, highly-skilled and communication and experienced personnel IT business continuity in core areas. disruption across operations. ----------------------------- ------------------------------ Mitigation Mitigation Mitigation Annual benchmark Extensive whistleblowing We monitor and regularly reviews to ensure campaign. Continuous upgrade the Company's competitiveness in monitoring and improvement information technology reward and recruitment. of the system of internal and security systems. Succession planning controls by all lines The Company has a in place as part of of defence with strong clearly defined employee business continuity. internal audit activity. user policy and control Focus on training Automation of processes of access rights. as a key differentiating where possible to Our information security factor in the operating reduce manual intervention. framework and infrastructure environment. have been externally reviewed in line with requirements of ISO 27001. IT business continuity plan is in place for quick deployment. ----------------------------- ------------------------------ KPI/Performance metric KPI/Performance metric KPI/Performance metric Staff turnover Number of reported Information security cases identification and containment reports ----------------------------- ------------------------------ Strategic pillars Strategic pillars Strategic pillars 2, 5 5 2, 5 ----------------------------- ------------------------------ Assessment Assessment Assessment Medium Very high High ----------------------------- ------------------------------ Trend Trend Trend Steady. Risk trend Steady. Risk is kept Rising. While cyber changed to steady at very high and the security continues this period. Company continues to hold international to maintain a zero attention, there has tolerance policy. not been material IT breach on our operations. However, the triggering of the work from home policy has resulted in a rising trend of the risk, given the greater number of employees working externally.
----------------------------- ------------------------------
Appendix C: Related Party Transactions
The following Related party relationships and transactions are extracted from the 2020 Annual Report and Accounts (page 231 )
41. Related party relationships and transactions
The Group is controlled by Seplat Petroleum Development Company Plc (the parent Company). The parent Company is owned 6.43% either directly or by entities controlled by A.B.C. Orjiako (SPDCL(BVI)) and members of his family and 10.21% 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.
The goods and services provided by the related parties are disclosed below. The outstanding balances payable to/receivable from related parties are unsecured and are payable/receivable in cash.
1. Shareholders of the parent Company
Shebah Petroleum Development Company Limited SPDCL (BVI):
The Chairman of Seplat is a director and shareholder of SPDCL (BVI). The Company provided consulting services to Seplat. Services provided to the Group during the period amounted to $900 thousand, 342 million (2019: $1.05 million, 322 million).
2. Entities controlled by key management personnel (Contracts>$1million in 2020)
Cardinal Drilling Services Limited (formerly Caroil Drilling Nigeria Limited):
The Company is owned by common shareholders with the parent Company. The Company provides drilling rigs and drilling services to Seplat. Transactions with this related party amounted to $5.7 million, 2.1 billion (2019: $9.44 million, 2.89 billion). Payables amounted to $591 thousand, 225 million in the current period (Payables in 2019: nil).
3. Entities controlled by key management personnel (Contracts<$1million in 2020)
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. This amounted to $296 thousand, 106 million during the period (2019: $0.93 million, 286 million). Payables amounted to $15,273, 5.8 million (2019: nil).
Stage leasing (Ndosumili Ventures Limited):
A subsidiary of Platform Petroleum Limited (an entity in which Austin Avuru has an equity interest). The Company provides transportation services to Seplat. This amounted to $714 thousand, 257million (2019: $1.45 million, 445 million). Payables amounted to $23,572, 8.9 million (2019: nil).
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