Seplat Energy (SEPL) Investor Update summary

Transaction overview and strategic rationale

• Completed acquisition of a 40% working interest in four prolific shallow water offshore blocks, adding 409 million barrels of oil equivalent at a cash consideration of $800 million, with a total deal value of $1.283 billion plus contingent consideration.

• The acquisition of MPNU from ExxonMobil more than doubles production capacity and significantly increases reserves and resources, with 409 MMboe 2P reserves and 670 MMboe 2P+2C reserves/resources.

• The transaction is transformational, scaling up production, reserves, revenue, and cash generation, with production rising to over 120,000 boe/d and reserves per share nearly doubling.

• The acquired assets include integrated infrastructure, over 200 producing wells, and three export terminals, providing a closed-loop system and resilience in operations.

• The deal positions the group as a leading indigenous energy company in Nigeria, with significant organic growth opportunities and a dominant role in the domestic gas market.

Financial impact and funding

• The cash consideration of $800 million is below the 2023 full-year EBITDA of $1.3 billion, reflecting a highly competitive acquisition multiple of $2 per boe.

• Financing included a $300 million advance payment facility, a fully drawn $350 million RCF, and $22 million from cash reserves, with no new equity issued.

• Pro forma net debt to EBITDA remains conservative at 0.7x, well within bond covenants, and the balance sheet is positioned for future growth and refinancing in 2025.

• Deferred payments of $257 million are mainly JV costs, partially offset by government cash calls, with an estimated after-tax impact of $25–35 million.

• The transaction is immediately value-accretive, with revenue, pre-tax cash flow, and adjusted EBITDA expected to triple or quadruple post-acquisition.

Operational plans and growth outlook

• Short-term focus is on restoring production from hundreds of idle wells using rigless, tax-efficient interventions, aiming for rapid production gains in 2025.

• CapEx drilling and field development activities are planned for 2026, with a parallel focus on gas development and monetization.

• Operational control over infrastructure, including the Qua Iboe Terminal, enhances security, storage, and export reliability.

• No job losses are planned; over 900 experienced staff are transitioning, ensuring continuity and technical expertise.

• Immediate focus is on smooth integration of MPNU staff and targeting organic production growth opportunities.