Seplat Energy to Sell 10% JV Stake to NNPC for $281.6 Million, Plans Special Dividend

Seplat Energy Plc has signed a binding agreement to sell a 10 percent working interest in its joint venture with the Nigerian National Petroleum Company Limited (NNPC Limited) for approximately $281.6 million, a transaction that will strengthen its balance sheet, reduce debt and support enhanced shareholder returns.

The agreement, executed through Seplat Energy Offshore Limited (SEOL) and Seplat Energy Producing Nigeria Unlimited (SEPNU), will increase NNPC Limited’s participating interest in the NNPCL/SEPNU Joint Venture from 60 percent to 70 percent, while SEPNU will retain a 30 percent working interest and continue as operator of the assets.

The transaction remains subject to regulatory approvals and customary closing conditions, with completion expected in the second half of 2026. The effective date has been set as April 1, 2026.

Under its capital allocation framework, Seplat Energy said it intends to split the transaction proceeds equally between debt reduction and shareholder distributions.

Subject to completion of the deal, the company plans to distribute approximately $140 million, equivalent to 23.3 U.S. cents per share, as a special cash dividend in addition to its regular dividend linked to underlying business performance.

The company also plans to reduce gross debt by up to $300 million. According to Seplat Energy, $200 million under its Advanced Payment Facility had already been repaid during the second quarter of 2026, while the remaining $100 million will be settled after the transaction is completed.

Despite the divestment, Seplat Energy said its 2026 production guidance will remain unchanged until the transaction closes.

SEPNU currently contributes around 80,000 barrels of oil equivalent per day (kboepd) at the midpoint of the company’s production guidance of 135,000 to 155,000 kboepd. Following completion, that contribution is expected to reduce to approximately 65,000 kboepd, reflecting the lower working interest.

Looking further ahead, the company expects the proceeds from the disposal, combined with lower capital expenditure obligations associated with the reduced working interest, to substantially offset the cash flow impact of the transaction through 2030.

While its long-term production target will be revised from 200,000 kboepd to 170,000 kboepd (net working interest), Seplat reaffirmed its commitment to distributing 40 to 50 percent of free cash flow between 2026 and 2030, maintaining its target of returning at least $1 billion to shareholders over the period.

The transaction will also reduce the group’s proved and probable (2P) reserves by approximately 13 percent to 872.9 million barrels of oil equivalent, with an updated reserve statement to be released after completion.

Commenting on the agreement, Seplat Energy Chief Executive Officer Roger Brown described the NNPCL/SEPNU Joint Venture as one of Nigeria’s most strategically important oil and gas assets.

He said the company and NNPC remain closely aligned on development plans and expect to unlock additional production growth over the coming years.

Brown added that Seplat’s strong financial position allows it to use proceeds from the transaction to strengthen shareholder distributions while further reducing leverage, creating greater financial flexibility for future growth.