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Seplat Revenue Declined by 34.2% in H1 2020

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seplate to announce financial results on July 29, 2020

Seplat Petroleum Posts 34.2% Drop in Revenue in H1 2020

Seplat Petroleum Development Company Plc, a leading Nigerian independent energy firm, grew revenue to US$234 million in the first half of the year.

In the unaudited financial statements released through the Nigerian Stock Exchange, the company’s revenue declined by 34.2 percent due to lower oil prices and a drop in global demand for the commodity.

Highlights

Operational

• Working interest production comfortably within guidance at 51,177 boepd despite market volatility
• Eland OML40/Ubima assets produced 10,861 bopd, 32% of Group oil volumes, integration progressing well
• Low unit cost of production at US$7.60/boe, with cost-cutting initiatives ongoing, particularly at OML40/Ubima
• Liquids production of 34,117 bopd, gas production of 99 MMscfd
• ANOH project remains on track for Q4 2021 first gas, financing RFP launched
• Amukpe-Escravos Pipeline delayed due to access to the Escravos terminal, expected operational in H2 2020

Financial

• Cash increased to US$343 million despite lower revenues, US$29 million 2019 dividend, and US$86 million capex
• Net debt steady at US$457 million with most maturities after 2021
• Revenue US$234 million, down 34.2% due to lower oil prices and demand
• IAS 36 impairment provision of US$146 million (non-cash) in line with IAS 36 COVID-19 impact assessment
• Provision reverses operating profit of US$33 million to operating loss of US$113 million

Business continuity

• Business continuity and re-opening plan successfully mitigating the impact of COVID-19 lockdowns
• Oil field operations largely unaffected, 28-day rotations in force

Outlook

• Full-year production guidance reiterated at 47-57 kboepd, subject to market conditions. We expect to narrow
the guidance range in Q3
• Oil hedging: 1.5MMbbl at US$45/bbl Q3 2020, 1.5MMbbl at US$30/bbl Q4 2020, 1.0MMbbl at US$30/bbl Q1 2021
• Full-year capex of US$120 million (US$86m already invested) to include two gas wells and related infrastructure

Commenting on the company’s performance for the period, Austin Avuru, Chief Executive Officer, said “Seplat has delivered a robust performance despite the unprecedented crises we have experienced since March. Our continued resilience is possible as a result of our financial strength, our careful management of risk and our prudent approach to capital allocation. Unlike many in our industry, we were able to protect our 2019 dividend and increase our capital investment to ensure continued growth.

“Our oil hedging strategy and gas revenues continue to protect the business from price volatility, we are achieving substantial cost reductions from our suppliers and are managing our own costs even more carefully in this challenging period. Thanks to the excellent relationships we have with our Government partners and supply chain, our NPDC receivables have fallen and we are managing our payments equitably. The cash position is also robust because our careful management of debt has ensured that the majority of obligations mature in 2022 and 2023. We are operating within our covenants on all our lines of debt.

“As part of our commitment to our host communities, we have provided medical and food assistance where needed and will continue to do whatever we can to support those upon whom we depend for our business. I was heartbroken to learn of the deaths of seven contractors in July at the operations on OML40. Health and safety is a top priority for the Seplat Group; we will learn whatever we can from the ongoing investigation into the matter and will take whatever steps are necessary to ensure such a tragedy is never repeated.

“This is my final set of results as Chief Executive of the Company I helped to found ten years ago. I thank all my staff, past and present, for working to make Seplat a major force in Nigerian energy production. I hand a robust and successful company over to Roger Brown in the confidence that he and everyone at Seplat will make its second decade even more successful than its first.”

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 long experience in the global financial market.

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Finance

Deposit Money Banks Start Debiting Debtors’ Other Bank Accounts

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secured loan

Banks Start Debiting Debtors’ Other Bank Accounts

Deposit Money Banks (DMBs) has commenced the implementation of the new Central Bank of Nigeria’s Global Standing Instruction directive that allows them to recover outstanding debts from debtors’ other bank accounts domiciled with other banks.

The initiative was in a move to reduce the size of the debt in the banking sector, according to Godwin Emefiele, the Governor, Central Bank of Nigeria.

Deposit Money Banks have commenced the implementation on August 1, 2020

Experts have said the implementation would differentiate real wealthy businessmen from debtors parading themselves as wealthy businessmen.

Peter Esele, a former President, Trade Union Congress, stated that the new rule was long overdue, adding that it was better late than never.

He said, “The financial system has been abused and it is baffling that one man would be owing six banks in the same country; it can’t happen anywhere else.

“What the CBN is doing now is that it is sanitising the industry and we now actually know who are the real businessmen and the real big men.

“Some men are wealthy from running banks down because a lot of the big men are running banks down.”

He added the central bank and the deposit money banks should start giving credit score.

Joseph Ajaero, the President, United Labour Congress, said, “Banks that are lending money to people should make sure that they have adequate collateral.

“Ordinarily, banks cannot on their own go to another bank and take the money that was kept in another bank; they are independent and should operate independently.”

He said deposit money banks ran into trouble because they were lending without collateral.

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Ardova Revenue Declines to N35.3bn in Q2 2020

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Ardova

Ardova Posts Lower Profit After Tax in Q2 2020

Ardova Plc’s revenue declined from N40.227 billion filed in the second quarter (Q2) of 2019 to N35.262 billion in the quarter ended June 30, 2020.

In the unaudited financial statements released through the Nigerian Stock Exchange on Friday, the company gross profit expanded slightly from N2.519 billion in Q2, 2019 to N2.559 billion in Q2 2020.

Ardova, formerly known as Forte Oil, reported an operating profit of N787.407 million, up from N246.495 million decline reported in the corresponding period of 2019. While finance income depreciated from N4.254 billion in the Q2 of 2019 to N42.616 million.

Accordingly, profit before income tax dipped from N3.198 billion reported in the same period of 2019 to N591.087 million.

Similarly, profit after tax plunged from N2.126 billion achieved in the corresponding period of 2019 to N514.923 million.

Earnings per share declined from N1.63 to 39 kobo in the second quarter ended June 30, 2020.

The global pandemic that disrupted crude oil market eroded profits of oil companies and weighed on their entire operations, especially during the April-June quarter when oil prices dipped to their lowest on record.

Ardova was one of the numerous oil companies affected by the disruption in global commerce and economic activities.

The company’s total asset contracted from N47.089 billion to N45.341 billion in Q2 2020. While total liabilities declined from N30.856 billion in Q2 2019 to N28.165 billion in Q2 2020.

However, total equity expanded to N17.176 billion, up from N16.163 billion in the second quarter of 2019.

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UBA Denies N41bn Fraud Involving NITEL

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UBA Insider dealings

United Bank for Africa Denies N41bn Fraud Involving NITEL

United Bank for Africa (UBA) on Thursday denied the alleged N41 billion fraud linked to Mr. Tony Elumelu, its Chairman.

In the statement signed by Bili A. Odum, Company Secretary, UBA and released by the bank through the Nigerian Stock Exchange, the lender said the allegation was misleading, untrue and malicious. It, therefore, stated that it would be disregarding the allegation in its entirety.

The statement reads “The attention of United Bank for Africa (UBA) has been drawn to false reports circulating in the media alleging that UBA and some of its principal officers have been indicted in a NGN41 Billion fraud involving NITEL in Liquidation.

“We would like to use this medium to inform the general public that the reports are untrue, misleading, malicious, libellous and should be disregarded in its entirety.”

“UBA has set in motion all appropriate legal actions to ensure that the misleading reports are retracted and the perpetrators held accountable for their actions.

“UBA is a reputable global brand and responsible corporate citizen, operating in multiple jurisdictions, and will continue to conduct its business in line with global best corporate governance practices, extant laws and regulations, as it has done in over 70 years of operations.”

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