Seplat Energy, a leading Nigerian independent energy company listed on both the Nigerian Exchange Limited and the London Stock Exchange, recorded $535 million in revenue in the nine months that ended 30 September 2021.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at $266.4 million while cash realised from operations was $163.8 million, the company stated in its unaudited financial statements for the period.
Total expenditure for the period was $83.9 million. Cash at the bank was estimated at $273.9 million and the energy company posted $479.8 million as net debt. See other details below.
- YTD working-interest production of 47,280 boepd down 6.7% year on year largely as a result of the shut-in of the Forcados Oil Terminal (FOT) in August (Q3: 40,381 boepd)
- Liquids production down 16.6% year on year at 27,804 bopd, recovering to 33kbopd liquids in October
- Gas production up 13% to 113 MMscfd, despite FOT impact on associated gas
- Completed two gas wells and three oil wells in the period, new Gbetiokun wells performing strongly
Financial highlights (9M 2021)
- Revenue after adjusting for an underlift was $535 million
- EBITDA of $266.4 million
- Cash generated from operations $163.8 million
- Cash at bank $273.9 million, net debt of $479.8 million
- Total capital expenditure of $83.9 million
- Interim dividend of 2.5 cents ($0.025)
- Name changed to Seplat Energy Plc to reflect new strategic vision outlined in July; new branding launched in October
- Acquisition of Cardinal Drilling rigs for $36 million and cessation of legal proceedings by Access Bank Outlook for 2021
- Expected production narrowed to 48-50 kboepd for full year, subject to market conditions
- Amukpe-Escravos Pipeline (AEP) commissioning has commenced, oil flow expected in December 2021
- Capex now expected to be $167 million for the full year
- ANOH project remains on track for first gas in H1 2022
Commenting on the financial statements, Roger Brown, Chief Executive Officer, said: “Production has recovered strongly since the outage at Forcados Oil Terminal (FOT) and we have been averaging nearly 33kbopd liquids throughout October. Now that production has normalised, we expect production to be in the range 48-50 kboepd for the year, provided uptime on the Forcados Pipeline and FOT remains above the budgeted 80%. I’m pleased to report that our new wells at Gbetiokun are performing strongly, and we will soon commence drilling the exciting Sibiri prospect on OML40.
“We have taken the difficult, but practical decision to bring an end to the uncertainty of the Access Bank legal dispute regarding Cardinal Drilling Services, which completes the Board-mandated removal of Related Party Transactions.
“Although we maintain our previously stated position that legal action against the Company was wholly without merit, the risk of significant disruption to our operations and other opportunities from a long, drawn-out legal case brought us to a negotiated settlement with Access Bank. We have therefore acquired the four Cardinal rigs and we are now focusing on fast tracking their deployment in future drilling campaigns. `
“Our business model is robust, despite setbacks in the third quarter, thanks to the prudent and flexible approach we have taken to managing the business. With an increased focus on efficiency in our operations, improving uptime by opening up the Amukpe to Escravos Pipeline and driving further cost reduction across our portfolio, this will provide the bedrock allowing us to operate effectively in fluctuating commodity prices and generate returns for shareholders. I am optimistic that the coming year will be much stronger, with many of the problems of the past put behind us.
“After we set out our future strategy in July’s Capital Markets Day and launched our new corporate name of Seplat Energy plc, complete with its new branding, we are now focusing on building out and executing the energy transition that is right for Nigeria. A strong step forward will be when we bring on stream the ANOH project next year delivering more transition gas to an energy poor market, over reliant on expensive, high carbon-emitting electricity generated from small-scale diesel and PMS generators. Our three-pillar strategy is designed to ensure we balance carbon emission reduction with the essential social agenda for undeniably the most under-electrified, youngest and fastest growing population on earth.”
Developing African Petroleum Value Chains
Despite the global shift towards cleaner sources of fuel, the African continent – representing the highest number of people without access to energy globally – still requires fossil fuel development, if it is to meet its developmental goals. Accordingly, oil and gas-producing nations across the continent are ramping up efforts to develop a sustainable, viable and high reward petroleum sector in Africa.
Speaking at an African energy producers’ forum at African Energy Week (AEW) 2021, African oil and gas ministers provided insight into Africa’s oil potential, strategies to expand the energy value chain and opportunities for regional and international cooperation.
Opening the African energy producers’ talk, Irene Etiobhio, Senior Petroleum Industry Analyst at the Organization of Petroleum Exporting Countries (OPEC), emphasized the role of oil in Africa’s energy future. Presenting OPEC’s World Oil Outlook 2021, launched earlier this year, Etiobhio offered key insights into both Africa’s and the world’s oil outlook.
“The OPEC outlook provides an in-depth view and analysis of global oil issues. It is important to restate that the outlook is not about projections, but should be viewed as a helpful and insightful guide. Our data is based on key assumptions,” stated Etiobhio.
Alongside the presentation, African energy ministers elaborated on the role of oil in Africa. Panel participants included H.E Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of Equatorial Guinea and Hon. Dr. Mohammed Amin Adam, Deputy Minister of Energy of Ghana.
Africa’s oil and gas industry is facing a dual challenge: to satisfy growing demand for petroleum products and to outpace the deployment of alternative, non-fossil sources of energy. Taking these two challenges into consideration, the panel participants provided insight into how the sector, and oil and gas companies in particular, plan to increase production while decarbonizing industry activities.
“Oil will play a significant role in the African energy mix and will take the highest share over all forms in the future mix. However, with the demand of over 600 million without access to electricity, Africa must do this in a modern way. We must not solve one problem while creating another. Africa needs to also take care of the environment,” continued Etiobhio. “We must have a clear mandate and one voice on how we are going to meet our emissions targets. China has said that by 2060, it will achieve carbon neutrality. Europe has set its target for 2025. Africa needs to do this, as well.”
Many African countries are looking to significantly enhance production, and are therefore looking to attract investment, as well capacity enhancement, across the entire energy sector value chain. During the panel, speakers discussed how Africa can fast-track the creation of an investor friendly environment, while still increasing local capacity.
“At this stage in Africa, we have come to the realization that someone has to be responsible, and for the first time, we have to take responsibility for the sector,” stated H.E. Minister Lima. “When the lockdown started, flights and movements stopped, and many expats could not fly or work. Could we actually continue operations with just national companies? The answer was yes, and for five months, Equatorial Guinea was operating almost 90% domestically. Our installations were operated by our own people, and so it was thanks to COVID-19 that we realized this.”
“Ghanaians took over the Liquefied Natural Gas processing facility. We have built reasonable local capacity to operate this facility. I am so hopeful that there is potential for Africa to develop, but we have to start doing it. If we make the effort to develop our capacity, then we will be able to do that,” added H.E. Deputy Minister Dr Adam.
Nigerians Abandon Gas Due to Surging Prices, Resort to Firewood and Charcoal
The surge in the price of gas prices has caused many Nigerians to resort to firewood and charcoal to cook, according to an open letter written to the government by retailers of the product.
LPG imports make up about 65% of the entire market, and they are being discouraged by several factors. One of the reasons for the decrease in imports is the lack of foreign exchange. This lack of imports had then led to a large reliance on domestic supplies, according to the Nigerian Association of Liquefied Petroleum Gas Marketers on Monday November 8, 2021.
As at today, Nigerians are now paying up to triple the amounts they paid for gas in January 2021. A 12.5-kilogram cylinder could now cost up to N10,200 ($25) according to the NALPGAM. These fast-rising prices mean that Nigerians are now abandoning LPG to go back to firewood, charcoal and kerosene regardless of the dangerous implications on the environment and one’s health. NALPGAM said this in an open letter to the Minister of State for Petroleum Resources, Timipre Sylva.
Nigeria is Africa’s largest crude oil producer, yet has refused to tap into the huge gas reserves which it possesses. Most of the country’s gas output is wasted due to inadequate infrastructure to properly exploit the resource. According to Nigeria’s official statistics agency in a 2020 report, only about 17% of the entire population make use of gas to cook; the rest make use of firewood or charcoal-fueled stoves.
The Nigerian President, Muhammadu Buhari pleaded for international financing for what he referred to as transition fuels like gas, which will help Nigeria take more steps toward renewable energy in the future. The President said at the COP26 conference in Glasgow on November 2, that gas will be highly important in addressing the clean cooking challenge and also help to reduce deforestation. He also touted that gas will help solve the country’s long-standing problems with electricity.
NALPGAM called on the government to maintain a steady supply of the dollar to LPG importers, urging the government to suspend the planned reintroduction of VAT and Customs duties.
If the gas prices continue to rise at this rate, more Nigerians will continue to abandon gas in favour of the more harmful alternatives, until the dangerous options are recognized as the norm. The government is encouraged to take necessary action in order to prevent possible casualties to human life where possible.
Green Energy Pioneer from Sierra Leone Jeremiah Thoronka Wins Inaugural $100,000 Chegg Global Student Prize
Jeremiah Thoronka, a student from Sierra Leone who invented a device that uses kinetic energy from traffic and pedestrians to generate clean power, has been named the winner of the Chegg.org Global Student Prize 2021. Jeremiah is the first winner of this new $100,000 award, which is given to one exceptional student who has made a real impact on learning, the lives of their peers and on society beyond.
Jeremiah, a 21-year-old student from Freetown, Sierra Leone, was selected from over 3,500 nominations and applications from 94 countries around the world.
The Varkey Foundation launched the Chegg.org Global Student Prize earlier this year, a sister award to its $1 million Global Teacher Prize, to create a powerful new platform that shines a light on the efforts of extraordinary students everywhere who, together, are reshaping our world for the better. The prize is open to all students who are at least 16 years old and enrolled in an academic institution or training and skills program. Part time students as well as students enrolled in online courses are also eligible for the prize. This year also saw US teacher Keishia Thorpe named as the winner of the Global Teacher Prize 2021.
Jeremiah Thoronka was born amid the fighting of the Sierra Leone civil war and grew up with his single mother in a slum camp for displaced people on the outskirts of the capital Freetown, having to burn charcoal and wood for lighting and heating. Jeremiah saw with his own eyes how, in addition to the photochemical smog making respiratory problems commonplace, his young contemporaries fell behind in their schoolwork because of a lack of decent lighting.
Energy poverty is a major issue in Sierra Leonne – with just 26% of the population having access to electricity. In rural parts of the country, only 6% of people have electricity access, with most turning to solar lanterns and dry-cell batteries. As a result, it’s led to the destruction of forests as people chop down trees for firewood, which leaves Sierra Leone highly vulnerable to extreme events like flooding and landslides. Families’ reliance on firewood and cheap kerosene generators also lead to frequent house fires.
These life-threatening disadvantages and hardships fuelled Jeremiah’s passion for renewable energy and climate change advocacy. At 17, when studying at the African Leadership University in Rwanda, he launched a start-up called Optim Energy that transforms vibrations from vehicles and pedestrian footfall on roads into an electric current. It is different from established renewable energy sources including wind or solar because it generates power without relying on changeable weather. At the same time, no battery and no electricity connection to an external power source is needed.
Optim Energy ran a successful pilot program in Jeremiah’s neighbourhoods, Makawo in the northern part of Sierra Leone and Kuntoluh east of Freetown. With just two devices, the start-up provided free electricity to 150 households comprising around 1,500 citizens, as well as 15 schools where more than 9,000 students attend.
Jeremiah is currently developing plans to expand into the healthcare sector, which needs power to chill medicines and vaccines and create sufficient light for treating patients after dark.
Jeremiah is a United Nations Academic Impact Millennium Fellow and Optim Energy was voted the most Innovative Energy Start-up 2020 by United Nations Major Group on Children and Youth (UNMGCY), and the Sustainable Development Goal (SDG) 7 Youth Constituency. Jeremiah is also one of the World Wildlife Fund’s top 100 Young African Conservation Leaders. Should he win the Global Student Prize, Jeremiah will use the prize money to expand Optim Energy to reach 100,000 people by 2030.
The other top 10 finalists for the Global Student Prize 2021 were Amisa Rashid from Kenya, Ana Julia Monteiro de Carvalho from Brazil, Kehkashan Basu from Canada, Lamya Butt from the UAE, Elliott Lancaster from the UK, Matine Khalighi from the US, Mirko Cazzato from Italy, Oluwadamilola Akintewe from Nigeria and Seema Kumari from India.
Actor and humanitarian Hugh Jackman said: “Students everywhere are fighting for their very future. They are part of a generation that are on the frontline of the greatest challenges of our time – from climate change to global inequality. So, we must listen to their voices and shine a light on their stories.
“Congratulations Jeremiah. You have made an enormous difference to your community and far beyond. I am sure that you will now use this incredible platform to make an even bigger impact.”
Chegg.org has partnered with the Varkey Foundation to create the new Global Student Prize. Dan Rosensweig, CEO & President of Chegg, said: “My warmest congratulations to Jeremiah. His inspirational work in pioneering clean, affordable energy makes him a thoroughly deserving winner of the inaugural Chegg.org Global Student Prize. This prize honors students everywhere. While many stakeholders are busy debating, students like Jeremiah are busy doing. They truly are the changemakers our world needs.
Sunny Varkey, Founder of the Varkey Foundation, said: “Congratulations to Jeremiah for becoming the first ever winner of the Chegg.org Global Student Prize and to Keishia for winning the Global Teacher Prize 2021. Their incredible stories show the vital role education plays in tackling the great challenges of today and tomorrow.”
Stefania Giannini, Assistant Director-General for Education at UNESCO, said: “Congratulations to Keishia for winning the Global Teacher Prize 2021 and Jeremiah for winning the Global Student Prize 2021. UNESCO was proud host to this year’s Global Teacher Prize ceremony at our headquarters in Paris. Inspirational teachers and extraordinary students alike deserve recognition for their commitment to education amid the learning crisis we see today. Now more than ever, we must honor and support our teachers and students as they look to rebuild a better world in the wake of COVID.”
Applications and nominations for this year’s Global Student Prize opened on Tuesday 2 February 2021 and closed on Sunday 16 May 2021.
Students who applied for the Global Student Prize were assessed on their academic achievement, impact on their peers, how they make a difference in their community and beyond, how they overcome the odds to achieve, how they demonstrate creativity and innovation, and how they operate as global citizens.
The winner of the Global Student Prize was chosen from the top 10 finalists by the Global Student Prize Academy, made up of prominent individuals who have a history of mentoring students in their studies or careers, having campaigned on behalf of student issues or having expertise in education and young people.
If students were nominated, the person nominating them was asked to write a brief description online explaining why. The student being nominated was then sent an email letting them know they had been nominated and inviting them to apply for the prize. Applicants were able to apply in English, Mandarin, Arabic, French, Spanish, Portuguese and Russian. To join the conversation online follow @TeacherPrize and @cheggdotorg
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