An indegenious oil exploration firm, Seplat Petroleum Development Company (SPDC) has planned to step up production from its current level of 3000 to 12000 barrels per day in the second half of this year and is targeting 20,000 barrels by next year.
This was disclosed Chief Executive Officer (CEO) of SPDC, Mr. Austin Avuru and Chief Financial Officer (CFO) Mr. Roger Brown at the presentation of ‘Facts Behind the Figures’ (FBF) to the capital market community on the floor of the Nigerian Stock Exchange (NSE).
Avuru told the investing publics that the firm was positioned for growth between now and 2019, both organic and inorganic. According to him, Seplat would be willing to buy secondary assets if the economics add up. He explained that the financial restructuring it had embarked on, would enable the company have ready funds in the events of any assets being available.
On how he intends to achieve his set goals, the CEO said average working production capacity for first quarter 2018 stood at 53,604 boepd. Crude oil production comprised 27,306bopd. He emphasized that Seplat has a working guidance of 48,000-55,000 boepd from the four oil blocs it has production interest namely OMLs 4, 38, 41 and 53. He also revealed that OMLs 38 and 41 are its biggest assets. And that It has a financial interest in OML 55.
While responding to another question by an investor, Mr. Nona Awoh, Avuru expressed optimism that the Amukpe-Sapele pipeline should be completed within the third quarter of the year, despite experiencing slight delays. Adding Seplat is co-financing the project. Similarly, the CEO
also hinted that SPDC intends to increase gas production from this asset by the year 2020, as it has lots of potentials. Two evacuation routes are planned On completion, that would be the primary means of evacuating crude oil. The Forcados pipeline would be the second option, and the Warri route the third option for evacuating crude oil.
Avuru stated that the company had decided to maintain a core dividend floor and a top up as was discussed during its last Annual General Meeting (AGM). However, in response to a question from Mr. Emeka Okolo of Multi trust securities, he declared that Seplat has no plans to go into refining. But pointed out that the company would, be willing to invest in a refinery close to its area of operation, if it would enhance its evacuation of crude oil.
According to him, the company had some receivables in respect of gas, as the power sector was not liquid enough to provide an immediate settlement. “Gas receipts are in Naira, while bills are in dollars. Seplat was however able to settle some of those bills with its crude oil revenue which is in dollars and Naira it uses for its operations.”He said.
Also, the Sapele gas plant would be upgraded to a higher capacity by next year. The company currently has excess capacity for gas processing, and gas plants are fairly easy to expand. Avuru told the capital market community.
He also disclosed that the company was quite active in terms of Corporate Social Responsibility (CSR). Communities nominate projects to be spent on.Tenders are made in a transparent manner, similar to Seplat’s own operations. Contractors hired from within the community also deliver.In addition, the firm also provides healthcare programmes annually, as well as its scholarship scheme. Militants were being built to being contractors.A fall out of its CSR policy was that the company has had no disruption in its operations since inception.
In response to a question by market analyst,on his outlook for oil and gas prices for the rest of the year,
Avuru noted that it would be difficult to give an outlook, but on a long-term basis, crude oil prices tend to trade within the $60-70$ range.
Capital expenditure and exploration costs could be scaled back if need be, but operation expenditure has some element of fixed costs.
The Facts Behind the Figures programme is a platform of the NSE which provides an avenue for the management of a company to brief the investing public on its activities.