Seplat Energy (SEPL) H2 2023 earnings summary

Executive summary

• Stronger production and gas sales lifted FY 2023 revenue 12% to $1.06bn despite lower oil prices; adjusted EBITDA was $448m and net income $123.9m.

• Working-interest production rose 8.3% to 47,758 boepd, 59% liquids; 2P reserves increased 9% to 478 MMboe, with a 292% reserves replacement ratio.

• Free cash flow reached $261m, net debt fell 16% to $306m, and declared dividends totalled 15 cents per share.

Financial highlights

• Revenue rose 11.5% to $1,061.3m; oil revenue was $937.9m and gas revenue $123.4m. FY revenue included $98.9m of production overlift.

• Adjusted EBITDA increased to $448m from $417m; net income was $123.9m versus $104.7m, while operating profit declined 9.2% to $249.4m.

• Gross profit rose 14.5% to $532.0m; cash generated from operations was $519.9m versus $574.6m, and capital investment was $183.9m.

• Realised oil price fell 18% to $83.39/bbl; realised gas price rose 3% to $2.90/Mscf.

Outlook and guidance

• FY 2024 guidance: production 44–52 kboepd, capex $170–200m, and operating costs $9.5–10.5/boe.

• 2024 drilling plan targets 13 wells, focused on the Western Asset; priorities include maintaining production and completing flaring-reduction work at Oben, Amukpe, Sapele and Jisike.

• ANOH first gas is planned for 3Q 2024; Abiala first oil is planned for 3Q 2024, and the Sapele gas plant upgrade is expected to complete in 2H 2024.

• Priorities include completing the MPNU transaction, maintaining the core dividend at 12 cents/share, targeting G&A costs of ~$6.5/boe and progressing new-energy projects toward FID.