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Forte Oil’s Profit Rises to N7bn

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Forte Oil

Forte Oil Plc has recorded a profit before tax of N7.01bn in the 2015 full year audited result, representing an increase of 17 per cent over the N6.01bn made in the previous year.

The firm stated that its revenue, however, declined to N124.62bn in the 2015 fiscal period compared to N170.13bn in the same period in 2014.

Profit after income tax also increased by 30 per cent to N5.79bn compared to N4.46bn in the same period in 2014, with earnings per share increasing by 86.8 per cent to N4.11 compared to N2.20 in the previous year.

The firm said in a statement, “The increase in PPE of 19 per cent is attributable to the N9.6bn paid so far for the major overhaul of Forte Oil’s 414MW Geregu power plant aimed at optimising and increasing its generation capacity from 414MW to 435MW, with an estimated completion date for H1, 2016.

“Forte Oil witnessed an increase in capacity utilisation at the Geregu power plant; however, margins reduced from 58 per cent to 42 per cent due to increase in gas costs caused by exchange rate fluctuations.”

According to the firm, Geregu Power Plc has also declared a dividend of N2.50bn to be paid to all shareholders upon ratification of at the company’s Annual General Meeting.

It added that the company’s growth in profit was attributable to the significant increase recorded in the sales of energy in the power generation segment as well as Premium Motor Spirit, Automotive Gas Oil, Aviation Turbine Kerosene and the production of chemicals, lubricants and greases.

The firm said the result was a feat in the history of the Nigerian Stock Exchange, adding that it had also set a precedent by filing approved results 30 days after the year end ahead of the regulatory deadline of 90 days.

“The board of directors has also proposed a cash dividend of N4.50bn, which will be paid to all shareholders upon the ratification of the proposal at its forthcoming Annual General Meeting,” it added.

The Group Executive Director, Finance and Risk Management, Forte Oil Plc, Mr. Julius Omodayo-Owotuga, was quoted as saying that the decline in revenue by 27 per cent was as a result of the reduction in the pump prices for most petroleum products, largely driven by the decline in crude oil prices.

He said, “In addition, the company also decided to manage its foreign exchange and subsidy exposure by reducing the importation of petroleum products for the year 2015.

“Other incomes increased by 190 per cent due to income from investment in securities held to maturity, freight income from the 100 trucks acquired the previous financial year, and sale of investment property. The increase in administrative expenses is a result of our decision to exit dollar-denominated loans and convert the same to naira at the prevailing exchange rates.”

Punch

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

OPEC Agrees to Increase Oil Supply by 500,000 Barrels Per Day Ahead of Surge in Demand

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Nigeria's economic Productivity

OPEC and allies finally agreed to ease their 7.7 million barrels per day production cut by 500,000 barrels per day starting from January 2021.

This will now bring the oil cartel’s total production cuts to 7.2 million barrels per day starting from next year.

Oil prices rose after the news as the market believed the approval of Pfizer COVID-19 in the United Kingdom will kick start a series of approvals and helped restore confidence, increase business activities and demand for the commodity across the globe.

After the outcome of the meeting was made public on Thursday, Brent Crude Oil against which Nigerian oil is priced gained 1.35 percent on Friday after gaining 1.4 percent on Thursday to $49.37 per barrel at 11.35 am Nigerian time on Friday.

The US West Texas Intermediate gained 1.29 percent to $46.23 barrel on Friday.

500,000 bpd from January is not the nightmare scenario that the market feared, but it is not what was really expected weeks ago,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu. “Markets are now reacting positively and prices are recording a small increase as 500,000 of extra supply is not deadly for balances,” she added.

Investors King increased business sentiment in the energy sector to boost investment, increase activity in the sector and most important improve crude oil demand enough to accommodate the 500,000 barrels per day extra that would be hitting the global market starting from January.

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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