Interim Management Statement and Q1 2015 Results

RNS Number : 5263L
SEPLAT Petroleum Development Co PLC
28 April 2015
 





 

Seplat Petroleum Development Company Plc

Interim management statement and consolidated interim financial results for the first quarter ended 31 March 2015

Lagos and London, 28 April 2015:  Seplat Petroleum Development Company Plc ("Seplat" or the "Company"), a leading Nigerian indigenous oil and gas company, listed on both the Nigerian Stock Exchange and London Stock Exchange, today announces average working interest production for the first three months of 35,811 boepd, up 63% from the same period last year, and maintains average working interest guidance of 32,000 to 36,000 boepd for the full year. Working interest 2P reserves are up 24% year-on-year at 281 MMboe following an independent assessment completed in the period.

After lifting adjustments, crude revenue was US$120 million, 16% lower than in 2014 while gas revenue increased by 170% year-on-year to US$11 million.  Gross profit stood at US$73 million and net profit US$23 million reflecting the significantly lower realised oil price during the first three months.  Capital investments during the first three months were US$14 million against operating cash flow before working capital of US$62 million.  Statutory reported cash at bank was US$191 million at period end.  The Company successfully completed in January a US$1 billion debt refinancing with a number of local and international banks and in February completed, with an effective date of 1 July 2013, the acquisition of interests in two blocks, OML 53 and OML 55, materially adding to its inventory of reserves and production growth opportunities. Expansion plans for the gas business gathered pace as final commissioning work on the new 150 MMscfd Oben gas processing facility was undertaken that will allow for increased supply to the domestic market in 2015 and beyond.

"The first quarter has been a busy period for Seplat.  Production has been strong, we have delivered material reserves growth when many of our peers have seen reserves decrease, grown our footprint in the Niger Delta to six blocks, re-financed our debt and expanded our gas business to increase domestic supply," said Austin Avuru, Seplat's Chief Executive Officer.  "Whilst we continue to deal with the challenges presented by the lower oil price environment head-on, and have set the 2015 work programme accordingly, we are excited about the numerous growth opportunities available to us in our current portfolio and will remain opportunistic in respect of new business ventures," he added.  Information contained within this release is un-audited and is subject to further review.

Production update

·      Average working interest production during the first quarter of 35,811 boepd (compared to 21,494 boepd in 2014) and comprised 27,935 bopd liquids and 47.3 MMscfd gas

·      Reported production figures reflect 25 days of downtime on the third party operated Trans Forcados System (TFS) in the first three months.  There were no shut-ins recorded at OML 53 and OML 55.  Excluding downtime, average working interest production in the first three months was 41,040 boepd (comprising 33,164 bopd liquids and 47.3 MMscfd gas)

·      Deliveries to the Warri refinery via the Seplat operated alternative export pipeline were 246,702 bbls

·      During the first three months, approximately 95% of liquids production from OMLs 4, 38 and 41 was transported through the TFS.  This volume was subject to an average of 9.67% reconciliation losses for the quarter

·      Average oil price realisation of US$52.8/bbl (2014: US$112.9/bbl), achieving an average US$1.52/bbl premium to Brent, and an average gas price of US$2.6/Mscf (2014: US$1.41/Mscf) 

Working interest production for the first three months of 2015(1)



Gross


Working Interest



Liquids

Gas

Oil equivalent


Liquids

Gas

Oil equivalent


Seplat %

bopd

MMscfd

boepd


bopd

MMscfd

boepd










OMLs 4, 38 & 41

45.0%

53,750

105.0

71,252


24,187

47.3

32,063

OPL 283

40.0%

3,532

-

3,532


1,413

-

1,413

OML 53

40.0%

2,782

-

2,782


1,113

-

1,113

OML 55 (2)

22.5%

5,430

-

5,430


1,222

-

1,222

Total


69,493

105.0

82,995


27,935

47.255

35,811

(1)      Liquid production volumes as measured at the LACT unit for OMLs 4, 38 and 41 and OPL 283 flow station.  Volumes stated are subject to reconciliation and will differ from sales volumes within the period.

(2)     Volumes associated with Seplat's 56.25% in Belemaoil producing Limited, equivalent to an effective 22.5% working interest in OML 55

 

 

 

 

Reserves and resources

·      Independent reserves assessment completed by Degolyer and MacNaughton in the first quarter confirmed working interest 2P reserves of 281 MMboe at 31 December 2014, comprising 139 MMbbls of oil and condensate and 827 Bscf of natural gas, representing an overall increase of 24% year-on-year

-      Key drivers of the upwards revision are the recognition of reserves at Orogho, Sapele Shallow and Okwefe following a review of 2014 well performance data and the conversion from 2C to 2P as a result of 2014 development activities

·      Working interest 2C resources (including management estimates for OML 53 and OML 55) stand at 281 MMboe

-      2P + 2C working interest volumes of 562 MMboe, split evenly between oil and gas

Drilling and capital projects update

·      Commissioning work has been completed for the new 150 MMscfd Oben gas plant, gas has been introduced to the system and final pre-start up audits and checks are underway.  The expansion of processing capacity at Oben is a major step forward for Seplat's gas business and increases gas supply available to the domestic market in Nigeria

·      Work is progressing on the construction of two 50,000 bbl storage tanks at the Amukpe field, with tanks one and two 90% and 74% complete respectively.  Commissioning of the tanks and ancillary plant is expected in Q2

·      Following the installation of three 10 MMscfd compressors, the Oben associated gas compression project is set for commissioning in the second quarter and is designed to eliminate the flaring of gas and process those volumes to sales quality

·      The Ovhor - Amukpe associated gas compressor is fully operational with continual gaslift enhancing production

·      Modification work is ongoing at the liquid treatment facility to address issues with the composition of separated water to enable full continuous injection

·      The Company completed two oil production wells at OML 38, three gas production wells at OMLs 4 and 38 during the first three months and presently has three rigs operating

New ventures

·      Completed the acquisition of a 40.0% working interest in OML 53 and an effective 22.5% working interest in OML 55 from Chevron Nigeria Limited ("CNL") in February with an effective date of 1 July 2013.  Both blocks fit neatly with Seplat's strategy of prioritising opportunities in the onshore and shallow water areas of Nigeria that offer near term production, cash flow and reserve replacement potential.  Seplat has been designated as operator of both blocks

·      The Company estimates net recoverable hydrocarbon volumes attributable to its working 40.0% working interest in OML 53 to be approximately 51 MMbbls of oil and condensate and 611 Bscf of gas (total 151 MMboe).  The Jisike oil field is currently the only producing field on the block.  The block also contains the large undeveloped Ohaji South gas and condensate field, the development of which will be co-ordinated with the SPDC operated Assa North field on adjacent OML 21 with the expectation of further boosting gas supply to the domestic market.  Seplat expects to focus initial work on increasing oil production at the Jisike field as plans to develop Ohaji South are finalised   

·      The Company estimates net recoverable volumes attributable to its effective 22.5% working interest in OML 55 to be approximately 20 MMbbls of oil and condensate and 156 Bscf of gas.  The block contains five producing fields (Robertkiri, Inda, Belema North, Idama and Jokka).  The majority of production on the block is from the Robertkiri, Idama and Inda fields.  All produced liquids from OML 55 are delivered via third party infrastructure to the Bonny terminal for processing and shipping.  Seplat expects to focus initial work on optimising and increasing oil production, taking advantage of the significant infrastructure capacity that already exists on the block

·      In 2014 the Company reported that US$453 million had been allocated as a refundable deposit against a potential investment of which US$408 million is in an escrow account.  The investment was not consummated as expected and the Company has demanded repayment of the full amount of US$453 million with accrued interest. The Company is also pursuing legal remedies to facilitate the repayment of these sums.  As at 31 March 2015 the US$453 million was recognised within the reported balance of trade and other receivables

 

 

Finance update

·      Gross revenue for the first three months was US$131 million (N25.6 billion) (2014: US$146 million (N22.7 billion))

-      Crude revenue (after adjusting for changes in lifting) was US$120 million (N23.4 billion), a 16% decrease from the same period in 2014 (US$142 million (N22.1 billion)) mainly due to the significantly lower realised oil price, partially offset by increased sales volumes  

-      Gas revenue was US$11.0 million (N2.2 billion), a 170% increase from the same period in 2014 mainly due to the increased production capacity resulting from wells and work-overs completed by the Company in the latter parts of 2014 and higher offtake from the gas buyers

·      Working interest sales volumes during the first three months increased to 2.46 MMboe from 1.90 MMboe in 2014.  The total volume of crude lifted in the first three months was 1.76 MMbbls compared to 1.50 MMbbls in 2014.  Total gas volume sold was 0.7 MMboe (2014: 0.5 MMboe)

·      Three month net profit was US$23 million (2014: US$47 million)

-      Decrease year-on-year primarily due to the lower realised oil price, increased cost of sales and finance charges offsetting the higher oil and gas sales volumes

·      Cash at bank US$191 million (N38.5 billion); initiated legal processes to retrieve US$453 million paid as a refundable deposit against potential investment in 2014

·      US$1 billion re-financing and up-sizing of existing debt facilities completed and funds drawn down in January

-      US$700 million seven year secured term facility closed with a consortium of banks in Nigeria comprising First Bank of Nigeria Limited, Stanbic IBTC Bank Plc, United Bank for Africa Plc and Zenith Bank Plc, is repayable quarterly from end June 2015 and has a margin of LIBOR +8.75% per annum.  The facility also includes an option for the Company to upsize the facility by up to an additional US$700 million for qualifying acquisition opportunities

-      US$300 million three year revolving credit facility has been closed with a consortium of eight international banks comprising Bank of America Merrill Lynch, Citibank, JP Morgan Limited, Natixis, Nedbank Limited, Rand Merchant Bank, Standard Bank and Standard Chartered Bank, has a quarterly reduction schedule from end December 2015 and has a margin of LIBOR +6.00% per annum

·      Capital investments of US$14 million in the first nine months funded by net operating cash flow before working capital of US$62 million; full year capex expectation is around US$168 million

·      The outstanding NPDC receivable at 31 March was US$499 million (N100.5 billion), consisting of both current year performances and outstanding payments brought forward from prior period performances

-      US$291 million (N58.6 billion) approved as cash calls

-      US$208 million (N41.9 billion) still undergoing various approval levels within NPDC

-      Total of US$46 million (N9.3 billion) collected by the Company as cash calls from NPDC during the first three months against expenditure of US$82 million

-      Plans are being implemented to ensure timely recovery of outstanding balances

 

 

 

Enquiries:

Seplat Petroleum Development Company Plc


Roger Brown, CFO

+44 203 725 6500

Andrew Dymond, Head of Investor Relations


Chioma Nwachuku, GM - External Affairs and Communications

+234 12 770 400

 

FTI Consulting

Ben Brewerton / Sara Powell / George Parker

seplat@fticonsulting.com

 

+44 203 727 1000

Citigroup Global Markets Limited

Tom Reid / Luke Spells

 

+44 207 986 4000

RBC Europe Limited

Matthew Coakes / Daniel Conti

+44 207 653 4000

 

Notes to editors

Seplat Petroleum Development Company Plc is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, listed on the Main Market of the London Stock Exchange ("LSE") (LSE:SEPL) and Nigerian Stock Exchange ("NSE") (NSE:SEPLAT).

In July 2010, Seplat acquired a 45 percent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil and gas leases in the Niger Delta (OMLs 4, 38 and 41), which includes the producing Oben, Ovhor, Sapele, Okporhuru, Amukpe and Orogho fields.  Since acquisition, Seplat has more than tripled production from these OMLs. 

In June 2013, Newton Energy Limited, a wholly-owned subsidiary of the Company, entered into an agreement with Pillar Oil Limited to acquire a 40 percent participating interest in the Umuseti/Igbuku marginal field area within OPL 283.   In February 2015, Seplat completed the acquisition of a 40 percent operated working interest in OML 53 and a 22.5 percent operated effective working interest in OML 55, Onshore Nigeria.

Seplat is pursuing a Nigeria focused growth strategy and is well-positioned to participate in future divestment programmes by the international oil companies, farm-in opportunities and future licensing rounds.  For further information please refer to the company website, http://seplatpetroleum.com/



 

Directors' interest in shares

At 31 March 2015

Directors' interest in shares

The interests of the Directors (and of persons connected with them) in the share capital of the Company (all of which are beneficial unless otherwise stated) as at 31 March 2015, are as follows:


No. of
Ordinary Shares

As a percentage
of Ordinary
Shares in issue 

Ambrosie Bryant Chukwueloka Orjiako(1)

84,736,913

15.32

Ojunekwu Augustine Avuru(2)

  73,297,011

13.20

William Stuart Connal

14,433

Roger Thompson Brown

1

-

Michel Hochard

-

-

Macaulay Agbada Ofurhie

4,806,373

0.87

Michael Richard Alexander 

-

-

Charles Okeahalam

400,000

0.07

Basil Omiyi

400,000

0.07

Ifueko Omoigui-Okauru 

-

-

Lord Mack Malloch-Brown

-

-

Damian Dinshiya Dodo

-

-




 

Notes:

 (1) 72,136,912 Ordinary Shares are held by Shebah Petroleum Development Company Limited, which is an entity controlled by A.B.C. Orjiako and members of his family and 12,600,000 Ordinary Shares are held directly by Mr. Orjiako's siblings and 1 Ordinary Share held by A.B.C. Orjiako.

(2)   27,217,010 Ordinary Shares are held by Professional Support Limited and 1,920,000 Ordinary Shares are held by Abtrust Integrated Services Limited, each of which is an entity controlled by Austin Avuru. 44,160,000 Ordinary Shares, are held by Platform Petroleum Limited, which is an entity in which Austin Avuru has a 23 per cent equity interest and 1 ordinary share held by Mr Augustine O. Avuru.

 

Substantial interest in shares

The issued and fully paid share capital of the Company As at 31 March 2015 is beneficially owned as follows:

Shareholder

No. of Ordinary Shares

As a percentage of total Ordinary Shares in issue

MPI S.A.

120,400,000

21.76

Shebah Petroleum Development Company Limited

84,736, 913

15.31

Austin Avuru and Platform Petroleum Limited

73,297,011

13.25

Citi Bank Custodian [International Tranche]

68,907,884

12.45

Mercuria Capital Partners Limited

24,722,677

4.47

ZPC/SIBTC RSA FUND - MAIN A/C

21,183,951

3.83

Quantum Power International Holdings Limited

19,600,000

3.54

Quantum Capital Partners Fund I LP

19,996,000

3.61

The Blakeney Group

16,000,000

2.89

Stanbic Nominees Nigeria Ltd/C002 - Main

10,517,238

1.90

CIS Plc Trading

29,288,532

5.29

Others

64,660,107

11.82





553,310,313

100

 



 

Directors' interest in shares continued

At 31 March 2015

Notes:

1.    72,136,912 Ordinary Shares are held by Shebah Petroleum Development Company Limited, which is an entity controlled by A.B.C. Orjiako and members of his family and 12,600,000 Ordinary Shares are held directly by Mr. Orjiako's siblings and 1 Ordinary Share held by A.B.C. Orjiako.

 

(2)   27,217,010 Ordinary Shares are held by Professional Support Limited and 1,920,000 Ordinary Shares are held by Abtrust Integrated Services Limited, each of which is an entity controlled by Austin Avuru. 44,160,000 Ordinary Shares, are held by Platform Petroleum Limited, which is an entity in which Austin Avuru has a 23 per cent equity interest and 1 ordinary share held by Mr Augustine O. Avuru

The directors confirm that to the best of their knowledge:

a)       The condensed set of financial statements have been prepared in accordance with lAS 34 'Interim Financial Report';

b)       The interim management  report  includes  a fair review  of  the information required  by UK DTR 4.2.7R indication  of  important  events during the first  nine  months and  description  of  principal risks and uncertainties for the remaining three months of the year and 

c)       The interim management report includes a fair review of the information required by UK DTR 4.2.8R disclosure of related parties' transactions and changes therein.

 




A. B. C. Orjiako

A. O. Avuru

R.T. Brown 

FRC/2013/IODN/00000003161

FRC/2013/IODN/00000003100

FRC/2014/IODN/00000007983

Chairman

Chief Executive Officer

Chief Financial Officer

28 April 2015

28 April 2015

28 April 2015

 

Disclaimer

Certain statements included in these results contain forward-looking information concerning Seplat's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which Seplat operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within Seplat's control or can be predicted by Seplat. Although Seplat believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Seplat or any other entity, and must not be relied upon in any way in connection with any investment decision. Seplat undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

 

 

 

Independent auditor's report on review of interim financial information to the members of Seplat Petroleum Development Company plc

 

 

Ernst & Young

10th Floor, UBA House

57, Marina

Lagos, Nigeria


Tel: +234 (01) 844 996 2/3

Fax: +234 (01) 463 0481

Email: services@ng.ey.com

www.ey.com

 

 

                                                     

We have reviewed the accompanying consolidated interim financial statements of Seplat Petroleum Development Company Plc and its subsidiaries (the Group), which comprise the consolidated statements of financial position As at 31 March 2015 and profit or loss and other comprehensive income, changes in equity and cash flows for the first quarter then ended, and notes to the consolidated interim financial statements as set out on pages 10 to 16. The company's directors are responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with IAS 34, "Interim Financial Reporting" and in the manner required by the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 and the Financial Reporting Council of Nigeria (FRCN) Act, No. 6, 2011. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements do not present fairly, in all material respects, the financial position of the Group As at 31 March 2015, and of the financial performance and its cash flows for the first quarter  then ended in accordance with IAS 34, "Interim Financial Reporting" and in the manner required by the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 and the Financial Reporting Council of Nigeria Act, No. 6, 2011.

 

 

 

 

Yemi Odutola

For Ernst & Young

Lagos, Nigeria

FRC/2014/ICAN/00000000141

 

28 April 2015

 

 

Statement of profit or loss and other comprehensive income

for the first quarter ended 31 March 2015



3 months  ended
31 Mar 2015

3 months  ended
31 Mar 2014

12 months  ended
31 Dec 2014

3 months  ended
31 Mar 2015

3 months  ended

31 Mar 2014

12 months  ended
31 Dec 2014


Note

$000

$000

 $000

Nmillion

Nmillion

Nmillion

Revenue

3

  131,122

 146,213

775,019

 25,562

 22,722

124,377

Cost of sales

4

 (58,404)

(52,883)

(315,590)

(11,386)

(8,218)

(50,647)

Gross profit


72,718

 93,330

459,429

 14,176

 14,504

 73,730

General and administrative expenses

5

(28,467)

 (38,631)

(151,569)

(5,550)

  (6,003)

(24,324)

Other operating income


-

-

-

-

-

-

Gain/(loss) on foreign exchange


(2,005)

 1,713

  (17,152)

(391)

 266

  (2,753)

Fair value movement in contingent consideration


(313)

(270)

(1,132)

(61)

(42)

(182)

Operating profit


41,933

56,143

289,576

8,174

8,725

46,471

Finance income


1,121

166

11,996

219

26

1,925

Finance charges

6

 (18,297)

(9,642)

 (49,319)

 (3,567)

 (1,498)

(7,915)

Profit before taxation


24,757

46,667

252,253

4,826

7,252

40,481

Taxation


215

   -

-

44

-

-

Profit after taxation


24,972

 46,666

252,253

4,870

7,252

40,481









Other comprehensive income

Foreign translation reserve


 

-

 

-

 

(32)

 

15,976

 

(1,780)

 

35,051









Total comprehensive income for the period / year


24,972

 46,666

252,221

20,846

5,473

75,532









Profit  attributable to non-controlling interest

12

(1,670)

-

-

(326)

-

-









Profit attributable to parent


23,302

46,666

252,221

20,520

5,473

75,532









Earnings per share ($/N)

7

$0.04

$0.12

$0.50

N8.80

N18.80

N79

 



 

Consolidated statement of financial position

for the first quarter ended 31 March 2015



As at 31 Mar

As at 31 Mar

As at 31 Dec 

As at 31 Mar

As at 31 Mar

As at 31 Dec



2015

2014

2014

2015

2014

2014


Note

$000

$000

$000

Nmillion

Nmillion

Nmillion

Assets







Non-current assets







Oil and gas properties

1,394,025

622,772

843,603

237,246

94,472

155,448

Other property, plant and equipment

  13,655

8,720

13,459

2,324

1,323

2,480

Intangible assets

         24

118

48

5

18

9

Goodwill

2,000

-

-

403

-

-

Deferred tax assets

1,021

-

-

206

-

-

Prepayments


39,957

366,084

131,466

8,049

56,835

24,225

Total non-current assets


1,450,682

997,694

988,576

248,233

152,648

182,162

Current assets







Inventories

49,072

56,256

54,416

9,886

8,734

10,027

Trade and other receivables

1,156,508

374,866

1,075,078

232,979

58,198

198,101

Other Current financial assets

891

-

890

179

-

164

Derivatives not designated as hedges

5,432

-

5,432

1,094

-

1,001

Cash and cash at banks


190,922

326,647

285,298

38,461

50,712

52,571

Total current assets


1,402,825

757,769

1,421,114

282,599

117,644

261,864

Total assets


2,853,507

1,755,463

2,409,690

530,832

270,292

444,026

Equity and liabilities







Equity attributable to shareholders







Share capital

    1,798

1,334

1,798

       277

   200

277

Capital contribution

  40,000

40,000

40,000

   5,932

5,932

5,932

Share premium

497,457

-

497,457

 82,080

-

82,080

Retained earnings

893,163

697,474

869,861

140,369

108,113

135,727

Foreign translation reserve

         26

58

26

  15,976

(1,780)

35,642

Non-controlling interest

12 

        3,079

-

-

  544

-

-

Total equity


1,435,523

738,866

1,409,142

245,178

112,465

259,658

Non-current liabilities







Interest bearing loans & borrowings

859,594

524,850

239,767

173,166

81,483

44,181

Deferred tax liabilities

151

-

-

30

-

-

Contingent consideration

28,881

8,514

9,377

5,818

1,322

1,728

Provision for decommissioning


13,138

15,662

12,690

2,647

2,432

2,338

Total non-current liabilities


901,764

549,026

261,834

181,661

85,237

48,247

Current liabilities







Trade and other payables

341,815

232,837

348,389

68,859

36,148

64,196

Current taxation

655

-

-

132

-

-

Short term borrowings

173,750

 234,734

390,325

35,002

36,442

71,924

Total current liabilities


516,220

467,571

738,714

103,993

72,590

136,120

Total liabilities


1,417,984

1,016,597

1,000,548

285,654

157,827

184,368

Total equity and liabilities


2,853,507

1,755,463

2,409,690

530,832

270,292

 

444,026

 

 

 

 

 




A. B. C. Orjiako

A. O. Avuru

R.T. Brown 

FRC/2013/IODN/00000003161

FRC/2013/IODN/00000003100

FRC/2014/IODN/00000007983

Chairman

Chief Executive Officer

Chief Financial Officer

28 April 2015

28 April 2015

28 April 2015



 

Consolidated statement of changes in equity

for the first quarter ended 31 March 2015


Share

Share

Capital

Foreign Translation

Retained

Total

Non-Controlling

Total


Capital

Premium

Contribution

Reserve

Earnings


interest

Equity


$000

$000

$000

$000

$000

$000

$000

$000










At 1 January 2014

1,334

-

40,000

58

690,807

732,199

-

732,199

Profit for the year

-

-

-

-

46,667

46,667

-

46,667

Other comprehensive income

-

-

-

-

-

-

-

-

Dividend to equity holders of the company

-

-

-

-

(40,000)

(40,000)

-

(40,000)

At 31 March 2014

1,334

-

40,000

58

697,474

738,866

-

738,866

Profit for the year

-

-

-

-

205,586

205,586

-

205,586

Other comprehensive income

-

-

-

(32)

-

(32)

-

(32)

Dividend to equity holders of the company

-


-


(33,199)

(33,199)

-

(33,199)

Increase in Shares

464

534,523

-

-

-

534,987

-

534,987

Transaction costs for shares issued


(37,066)



-

(37,066)

-

(37,066)

At 31 December 2014

1,798

497,456

40,000

26

869,862

1,409,142

-

1,409,142

Profit for the year

-

-

-

-

23,302

23,302

1,670

24,972

Other comprehensive income

-

-

-

-

-

-

-

-

Share capital

-

-

-

-

-

-

1,409

1,409

At 31 March 2015

1,798

497,456

40,000

26

893,164

1,432,444

3,079

1,435,523











Nmillion

Nmillion

Nmillion

Nmillion

Nmillion

Nmillion

Nmillion

Nmillion










At 1 January 2014

200

-

5,932

591

106,993

113,716

 -

113,716

Profit for the year

-

-

-

-

7,252

7,252

-

7,252

Other comprehensive income

-

-

-

(2,371)

-

(2,371)

-

(2,371)

Dividend to equity holders of the company

-

-

-

-

(6,132)

(1,955)

-

(1,955)

At 31 March 2014

200

-

5,932

(1,780)

108,113

112,465

-

112,465

Profit for the year

-

-

-


33,229

33,229

-

33,229

Other comprehensive income

-

-

-

37,422

-

37,422

-

37,422

Dividend to equity holders of the company

-

-

-

-

(5,615)

(5,615)

-

(5,615)

Increase in Shares

77

88,196

-

-

-

88,273

-

88,273

Transaction costs for shares issued


(6,116)

-

-

-

(6,116)

-

(6,116)

At 31 December 2014

277

82,080

5,932

35,642

135,727

259,658

-

259,658

Profit for the year

-

-

-

-

4,642

4,642

326

4,968

Other comprehensive income

-

-

-

(19,666)

-

(19,666)


(19,666)

Share capital

-

-

-

-

-

-

218

218

At 31 March 2015

277

82,080

5,932

15,976

140,369

244,634

544

245,178

 

 

 

 

Consolidated statement of cash flow

for the first quarter ended 31 March 2015


3 Months to

31 Mar

3 Months to

31 Mar

12 months to Dec

3 Months to

31 Mar

3 Months to

31 Mar

12 months to Dec


2015

2014

2014

2015

2014

2014


$000

$000

$000

Nmillion

Nmillion

Nmillion

Cash Flows from Operations Activities







Cash generated from operations

(62,261)

4,559

228,171

(12,138)

  708

    36, 607

Income taxes Paid

-

(2,874)

(2,874)

-

(447)

       (530)

Net cash inflows from operating activities

(62,261)

1,685

225,297

(12,138)

  261

 36,077

Cash Flow from Investing Activities







Investment in Oil and gas properties

(381,352)

(44,818)

(303,214)

(74,343)

(6,966)

   (55,872)

Investment in other property, plant and equipment

(196)

(1,167)

(9,870)

(38)

(181)

    (1,819)

Acquisition of goodwill and intangible assets

(2,000)

-

-

(390)

-


Proceeds from sale of asset

-

   -

-

-

-

-

Deposit for Investment

-

(200,000)

(453,190)

-

(31,081)

   (83,508)

Aborted acquisition costs

-

-

(26,056)

-

-

(4,182)

Interest received

1,121

  658

11,996

219

    102

  1,925

Net cash outflows from investing activities

(382,427)

(245,327)

(780,334)

(74,553)

(38,126)

(143,456)

Cash Flows from Financing Activities







Proceeds from issue of shares

-

-

534,987

-

-

    88,273

Issue costs

-

-

(37,066)

-

-

    (6,116)

Proceeds from bank financing

1,000,000

446,000

446,000

194,947

69,312

    71,575

Expenses from bank financing

(32,899)

-

-

(6,413)

-

-

Repayments of bank financing

(598,940)

(39,679)

(119,034)

(116,762)

(6,166)

     (19,103)  

Loan to subsidiary undertaking

-

-

-

-

-


Repayment of shareholder financing

-

-

(48,000)

-

-

    (7,703)

Dividends paid

-

-

(73,199)

-

-

   (11,747)

Interest paid

(17,849)

(5,493)

(32,847)

(3,480)

(854)

    (5,271)

Net cash inflows/(outflows) from financing activities

350,312

(400,828)

670,841

68,292

   (62,292)

109,908

Net increase in cash and cash equivalents

(94,376)

157,186

115,805

(18,398)

  24,428

2,529

Cash and cash equivalents at beginning of period / year

285,298

169,461

169,461

52,571

  26,300

26,300

Net foreign exchange difference

-

-

32

4,288

   (16)

23,742

Cash and cash equivalents at end of period / year

190,922

326,647

285,298

38,461

50,712

52,571

 

 

 

 

 

 

 

Notes to the consolidated financial statements

 

1.    Corporate structure and business

Seplat Petroleum Development Company Plc (''Seplat'' or the ''Company''), the parent of the Group, was incorporated on 17 June 2009 as a private limited liability company and re-registered as a public company on 3 October 2013, under the Company and Allied Matters Act 2004. The Company commenced operations on 1 August 2010. The Company is principally engaged in oil and gas exploration and production.

The Company acquired, pursuant to an agreement for assignment dated 31 January 2010 between the Company, SPDC, TOTAL and AGIP, a 45 per cent participating interest in the following producing assets:

OML 4, OML 38 and OML 41 located in Nigeria. The total purchase price for these assets was $340 million paid at the completion of the acquisition on 31 July 2010 and a contingent payment of $33 million payable 30 days after the second anniversary, 31 July 2012, if the average price per barrel of Brent Crude oil over the period from acquisition up to 31 July 2012 exceeds $80 per barrel. $358.6 million was allocated to the producing assets including $18.6 million as the fair value of the contingent consideration as calculated on acquisition date. The contingent consideration of $33 million was paid on 22 October 2012.

During 2013, Newton Energy Limited (''Newton Energy''), an entity previously beneficially owned by the same shareholders as Seplat, became a subsidiary of the Company. On 1 June 2013, Newton Energy acquired from Pillar Oil Limited (''Pillar Oil'') a 40 per cent. Participant interest in producing assets: the Umuseti/Igbuku marginal field area located within OPL 283 (the ''Umuseti/Igbuku Fields''). The total purchase price for these assets was $50 million paid at the completion of the acquisition in June 2013 and a contingent payment of $10 million payable upon reaching certain production milestones. $57.7 million was allocated to the producing assets including $7.7 million as the fair value of the contingent consideration as calculated on acquisition date.

On February 5, 2015, Seplat announced the completion of the acquisition of a 40% working interest in OML 53 and, onshore north eastern Niger Delta from Chevron Nigeria Limited. The up-front acquisition cost to Seplat, after adjustments, is $259.4 million, of which $69.0 million had previously been paid as a deposit in 2013 and $190.4 million paid at completion.  The adjustments to the up-front acquisition cost include a deferred payment of $18.75 million contingent on oil prices averaging $90/bbl. or above for 12 consecutive months over the next five years.

On February 5, 2015, Seplat announced the conclusion of negotiations to purchase 56.25% of the share capital of Belemaoil, a Nigerian special purpose vehicle that has completed the acquisition of a 40.00% interest in the producing OML 55, located in the swamp to coastal zone of south eastern Niger Delta, from Chevron Nigeria Limited. Seplat's effective working interest in OML55 is 22.5% for a consideration of $132.2 million after adjustments.  The adjustments to the consideration include a deferred payment of $11.6 million net to Seplat contingent on oil prices averaging US$90/bbl. or above for 12 consecutive months over the next five years.  The Company has also advanced certain loans of $80.0 million to the other shareholders of Belemaoil to meet their share of investments and costs associated with Belemaoil.  In addition, discussions are underway to determine repayment terms for the initial deposit against the acquisition of $52.5 million that Belemaoil funded with bank debt.  This amount may subsequently be added to the total amount loaned to Belemaoil by Seplat.  Under the agreed terms Seplat will recover the loaned amounts, together with an uplift premium of up to $20.6 million and annual interest of 10.00%, from 80.00% of the other shareholders oil lifting entitlements.

The Company's registered address is: 25a Lugard Avenue, Ikoyi, Lagos, Nigeria.

The Company together with its subsidiary, Newton Energy, and four wholly owned subsidiaries, namely, Seplat Petroleum Development Company UK Limited (''Seplat UK''), which was incorporated on 21 August 2013, Seplat East Onshore Limited (''Seplat East''), which was   incorporated on 12 December 2013, Seplat East Swamp Company Limited (''Seplat Swamp''), which was incorporated on 12 December 2013, and Seplat Gas Company Limited (''Seplat Gas''),   which was incorporated on 12 December 2013, is referred to as the Group.

 

 

 

 

Notes to the consolidated financial statements

continued

2.    Accounting policies

2.1   Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial information has been prepared under the going concern assumption and historical cost convention, except for contingent consideration, borrowings on initial recognition and financial instruments - derivatives not designated as hedges that have been measured at fair value. The historical financial information is presented in US dollars and all values are rounded to the nearest thousand ($000), except when otherwise indicated.

2.2   Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 March 2015.

This basis is the same adopted for the last audited financials statement as at 31 December 2014.

2.3   Functional and presentation currency

Functional and presentation currency

The Group's financial statements are presented in United States Dollars, which is also the Company's functional currency. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income within the line item gain/(loss) on foreign exchange, net.

Group companies

On consolidation, the assets and liabilities of foreign operations are translated into US$ at the rate of exchange prevailing at the reporting date and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

For statutory reporting purposes, the Naira components of the quarterly consolidated financial statements are derived from the US dollar financial statements translation in which all monetary assets and liabilities are translated at the closing rate, share capital at historical rate while comprehensive income and fixed assets accounts are translated at the average rate for the period. The resulting exchange differences are recognised in other comprehensive income and included as a separate component of equity.

 

 

 

 

Notes to the consolidated financial statements

continued

3.    Revenue


3 months ended    
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

               

$000

$000

Nmillion

Nmillion

Crude oil sales as invoiced

95,407

163,094

18,599

25,346

 

Changes in lifting (in line with participating interests of both parties)

 24,677

(20,977)

4,811

(3,260)


120,084

142,117

 

23,410

22,086

Gas sales

11,038

4,096

2,152

636

Total revenue

131,122

146,213

25,562

22,722

 

The sole off-taker for crude oil is Shell Western Supply and Trading Limited.

 

4.    Cost of sales


3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion

Crude handling fees

5,691

  3,084

1,109

479

Royalties

23,682

30,046

4,617

4,669

Depletion, Depreciation and Amortisation

16,100

  6,265

3,139

974

Niger Delta Development Commission

2,869

  2,322

559

361

Other Rig related Expenses

292

1,134

57

176

Other Field Expenses

9,770

10,032

1,905

1,559


58,404

52,883

11,386

8,218

 

5.    General and administrative expenses


3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion

Depreciation, amortisation and impairment charges

1,286

895

251

139

Employee related cost

5,814

4,653

1,133

723

Professional & Consulting Fees

13,753

18,453

2,681

2,868

Directors Emoluments

770

1,875

150

291

Other General and Admin Expenses

6,844

12,755

1,335

1,982


28,467

38,631

5,550

6,003

 

 

 

 

Notes to the consolidated financial statements

continued

6.    Finance charges


3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion

Bank loan

17,849

9,156

3,480

1,423

Interest on shareholder loan

-

-

-

-

Unwinding of discount on provision for decommissioning 

448

486

87

75


18,297

9,642

3,567

1,498

 

7.    Earnings per share

Basic

Basic earnings per share is calculated on the Company's profit after taxation and on the basis of weighted average of issued and fully paid ordinary shares at the end of the year.


3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion






Profit  for the year attributable to shareholders  ($000)

24,972

46,666

4,870

7,253

Weighted average number of ordinary shares in issue (in 000)

553,310

398,787

553,310

398,787







$

$

N

N

Basic earnings per share (in $)

0.04

0.12

8.80

18.18

Dividend per share (in $ and N)

-

-

-

-






Earnings

$000

$000

Nmillion

Nmillion

 

Profit attributable to equity holders of the Group

24,972

46,666

4,870

7,253











Profit used in determining diluted earnings per share

24,972

46,666

4,870

7,253

 

There were no dilutive instruments for the period ended 31 March 2015.

 

 

 

Notes to the consolidated financial statements

continued

8.    Related party transactions

8a.   Transactions

The following transactions were carried out by related parties on behalf of Seplat:

i)    Purchases of goods and services

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion

Shareholders





MPI SA

            -  

           300

           -  

           -  

Shebah Petroleum Development Company Limited

           379

           250

           74

           59

Platform Petroleum Limited

            22

            33

            4

            3


           401

           583

           78

           62

Entities under common control





Abbey Court Petroleum Company Limited

1,470

1,056

287

228

Abtrust Integrated Services

-

50

-

-

Charismond Nigeria Limited

2

150

-

-

Cardinal Drilling Services Limited

5,884

7,627

1,147

914

Keco Nigeria Enterprises

1,287

833

251

200

Ndosumili Ventures Limited

609

655

119

95

Oriental Catering Services Limited

290

163

57

45

ResourcePro Inter Solutions Limited

510

194

100

79

Berwick Nigeria Limited

-

988

-

-

Montego Upstream Services Limited

3,504

1,537

683

545

Neimeth International Pharmaceutical Plc

-

-

-

-

Nerine Support Services Limited

6,963

6,671

1,357

1,082

Nabila Resources & Investment Ltd

-

298

-

-

D.D Dodo & Co

-

-

-

-

Helko Nigeria Limited

-

828

-

-


20,519

21,050

4,001

3,188

 

ii)   Interest expense

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion

Shareholders





MPI

-

1,694

-

263

 

 

 

 

Notes to the consolidated financial statements

continued

8b.   Balances

The following balances were receivable from or payable to related parties as at 31 March 2015:

i)   Prepayments / receivables

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014

3 months ended
31 Mar 2015

3 months ended
31 Mar 2014


$000

$000

Nmillion

Nmillion

Under common control





SEPCOL

-

-

-

-

Cardinal Drilling Services Limited

10,507

7,799

2,117

1,212

Abbeycourt Petroleum Company Limited

-

-

-

-


-

7,799

-

1,212

 

ii)  Payables





Shareholders -





Loan from MPI

-

47,927

-

7,441

 

9.    Goodwill

Seplat, via a wholly owned subsidiary, entered into a share purchase agreement with First Act, Belema Refinery and Petrochemical Ltd, Mr. Jack Tein and Belemaoil (the four shareholders of Belemaoil) to acquire 56.25% of Belemaoil. This sale and purchase agreement was consummated on 5 February 2015 upon Seplat consortium's acquisition of CNL's 40% interest in OMLs 52, 53 and 55. This results in Seplat having an indirect interest of 22.5% in OML 55.

The acquisition of OML 55 is a business combination through its indirect acquisition of the asset and has been accounted for in accordance with IFRS 3R. The fair value of the purchase consideration and the assets acquired are $139 million and $137 million respectively, giving rise to a goodwill on acquisition of $2million (N403million).

 





$000

Nmillion

Purchase consideration

139,285

28,059

Fair value of Net assets of Belemaoil

(137,285)

(27,656)




Goodwill

2,000

403

 

 

Notes to the consolidated financial statements

continued

10.  Trade and other receivables

 


As at 31 Mar

As at 31 Mar

As at 31 Dec

As at 31 Mar

As at 31 Mar

As at 31 Dec


2015

2014

2014

2015

2014

2014


$000

$000

$000

Nmillion

Nmillion

Nmillion

Trade receivables

140,264

30,786

119,588

28,256

4,780

22,036








Nigerian Petroleum Development







 Company (NPDC) receivables

498,813

290,608

463,118

100,486

45,117

85,337

Intercompany receivables

-

-

-

-

-

-

Deposit for Investments

453,190

-

453,190

91,295

-

83,508

Advances to related parties

10,507

5,534

10,924

2,117

859

2,013

Prepayments

18,999

16,798

14,224

3,827

2,608

2,621

Under lift

17,649

6,853

2,783

3,555

1,064

513

Advances to suppliers

14,142

24,031

10,934

2,849

3,730

2,015

Other receivables

2,944

256

317

594

40

58









1,156,508

374,866

1,075,078

232,979

58,198

198,101

 

 

Deposit for investment:

By a consortium agreement made amongst parties, Newton Energy Limited (a wholly owned subsidiary of Seplat) agreed to make payments of $453 million towards an investment in 2014 of which $408 million was placed into an escrow account. The investment was not consummated as expected, as such and in accordance with agreements signed, Newton has demanded the repayment of the full amount of $453 million with accrued interest. Newton is also pursuing legal remedies to facilitate the repayment of these sums, including the amounts in the escrow account related to this investment.

Trade receivables / NPDC receivables:

Trade receivables are non-interest bearing and are generally on 30-day terms.

The amount due from NPDC includes $291 million (N58.6 billion) that is overdue as at 31 March 2015. The overdue cash calls are not considered impaired based on the credit worthiness of the counterparty and previous experience whereby certain amounts are paid but not in line with the terms as NPDC is required to follow due process.

 

 

Notes to the consolidated financial statements

continued

11.  Share capital

 

11a. 

As at 31 Mar

As at 31 Mar

As at 31 Dec

As at 31 Mar

As at 31 Mar

As at 31 Dec


2015

2014

2014

2015

2014

2014

Value

$000

$000

$000

Nmillion

Nmillion

Nmillion

Authorised ordinary share capital














1,000,000,000 ordinary shares denominated in  Naira of 50 kobo per share

3,335

3,335

3,335

517.8

518

519

Issued and fully paid














553,310,313 issued shares denominated in Naira of 50 kobo per share

1,798

1,334

1,798

277

200

277

 

In 2014, the Group issued and allotted 153,310,313 through an initial public offering, resulting in an increase in number of issued and fully paid ordinary shares of 50k each from 400 million to 553 million shares.

 

11b.  Capital contribution


As at 31 Mar

As at 31 Mar

As at 31 Dec

As at 31 Mar

As at 31 Mar

As at 31 Dec


2015

2014

2014

2015

2014

2014


$000

$000

$000

Nmillion

Nmillion

Nmillion








Additional Contribution

40,000

40,000

40,000

5,932

5,932

5,932


40,000

40,000

40,000

5,932

5,932

5,932

 

This represents M&P additional cash contribution to the Company. In accordance with the Shareholders Agreement, the amount was used by the Company for working capital as was required at the commencement of operations. Subsequently, the interest held by M&P was transferred to MPI. All terms and conditions previously held by M&P were re-assigned to MPI.

11c.  Share Premium


As at 31 Mar

As at 31 Mar

As at 31 Dec

As at 31 Mar

As at 31 Mar

As at 31 Dec


2015

2014

2014

2015

2014

2014


$000

$000

$000

Nmillion

Nmillion

Nmillion

Gross Proceeds

534,987

-

534,987

88,273

-

88,273

Share issue

(464)


(464)

(77)

-

(77)

Share Premium

534,523


534,523

88,196

-

88,196

Issue costs

(37,066)


(37,066)

(6,116)

-

(6,116)








 Issued share capital proceeds

497,456

-

497,457

82,080

-

82,080

 

In 2014, net proceeds of $497.9 million (N82.1 billion) was received during the initial public offering. 153,310,313 shares of 50keach totaling $464,000 (N77million) were transferred to share capital.

Notes to the consolidated financial statements

continued

12.  Non-controlling interest

This represents Seplat's non-controlling interest (ie Belema's share -43.75%) of net profits in OML 55 and share capital as at the end of the quarter. 

13.  Events after the reporting period

At the date of this report there have been no significant events after reporting period, which would have a material effect on the financial statements as presented.



 

General information

 

Company secretary

Mirian Kene Kachikwu


Registered office and business



Address of directors

25a Lugard Avenue

Ikoyi

Lagos

Nigeria


Registered number

RC No. 824838


Registrars

DataMax Registrars Limited

7 Anthony Village Road

Anthony

P.M.B 10014

Shomolu

Lagos, Nigeria


FRC number

FRC/2015/NBA/00000010739


Auditors

Ernst & Young

10th Floor, UBA House

57 Marina

Lagos, Nigeria.


Solicitors

Abhulimen & Co.

Anaka Ezeoke & Co.

D. D. Dodo & Co.

Jakpa, Edoge & Co.

Ogaga Ovrawah & Co.

Streamsowers & Kohn

Thompson Okpoko & Partners

Winston & Strawn London LLP


Bankers

Access Bank Plc

African Export-Import Bank

BNP Paribas Bank

Diamond Bank Plc

First Bank of Nigeria Plc

GT Bank Plc

Skye Bank Plc    

Stanbic IBTC Bank Plc

United Bank for Africa Plc

Zenith Bank Plc

Union Bank of Nigeria Plc

Ecobank Nigeria Plc

Citibank Nigeria Limited

Standard Chartered Bank Nigeria Limited

HSBC Bank


 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
QRFPGUMCCUPAUBR
UK 100

Latest directors dealings