…gets shareholders’ approval on name change
…Paid $344 million dividend to shareholders since 2014
Seplat Petroleum Development Company Plc, a leading Nigerian independent energy company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), held its hybrid 8th Annual General Meeting (AGM) with shareholders, auditors, regulators, company directors, and the media, amongst other stakeholders joining physically and virtually.
In his address to shareholders and other stakeholders during the AGM, Dr. ABC Orjiako, the Chairman of Board, Seplat, said the company’s cash position remained strong in the full-year of 2020 and the $318 million of cash it generated from operations was significantly more than the $150 million invested for future growth.
The company’s capital expenditure in the 2020 business year was higher than the $125 million spent in 2019, which demonstrates the company’s commitment to growth; as it voluntarily repaid $100 million of its Revolving Credit Facility and ended the year with $225 million in cash and net debt of $440 million.
The company’s average working interest production was 51,183boepd, including 33,714bopd of liquids and 101MMscfd gas (17,469boepd). He said: “Of this, our Eland assets contributed 8,855bopd, or 26% of total liquid volumes. Our financial performance enabled us to maintain our commitment to paying dividends.
While other companies were cutting back or cancelling payments for the 2019 financial year, because of prevailing uncertainties, we honoured our commitment and paid a final dividend of US$0.05, for a total dividend of US$0.10 for 2019.
“In October 2020, we announced an interim dividend of US$0.05 and the Board has since approved an additional top-up of US$0.05, maintaining our US$0.10 dividend for the 2020 financial year. Since we raised $535 million at our initial public offering in May 2014, we have returned $344 million to shareholders in the form of dividends.
“The strengthening of our Board is part of our ongoing desire to achieve world-class governance of our company. Six of our 13-member Board are independent and we continue to work towards increasing diversity. In addition, as we announced in March, we have taken the bold decision to eliminate all Related-Party Transactions – a move that exceeds the requirements of the UK Code of Corporate Governance.”
According to Dr. Orjiako, it is the responsibility of the Board to plan for the long-term sustainability of the company, as scenario analyses on Seplat’s assets have been conducted under different climate change and demand scenarios, whilst looking towards a future in which Seplat is much more involved in promoting low carbon environment in its operations and the company adopting Seplat Energy as its new name following the passage of the resolution at its AGM.
“Such a transition will involve significant new innovations, technology, skills and relationships, compared to our existing expertise of subsurface exploration, drilling and hydrocarbon processing, but we are determined to be a major part of Nigeria’s future energy mix and help drive the country towards more sustainable energy generation,” the Seplat Chairman emphasized.
He added: “Our ANOH Gas Processing Plant will be a major step forwards in Nigeria’s drive to reduce carbon emissions, replacing potentially millions of small-scale, inefficient, and polluting generators with cleaner utility-scale power generation fired by Nigerian natural gas. In addition, we intend to increase our disclosure of environmental, social and governance (ESG) data, by adopting the recommendations of the Task Force on Climate-related Financial Disclosures and will commit to reporting CO2 emission data to the Carbon Disclosure Project in the near future.
“Helping our communities Part of our ESG commitment is already apparent in the long-term projects we implement in our host communities. As the Covid-19 pandemic struck Nigeria, it was our duty to help our host communities and States in whatever ways we could.”
Also at the AGM, Shareholders unanimously approved the change of name resolution from Seplat Petroleum Development Company Plc to Seplat Energy Plc in line with the company’s transition into a full energy solutions company. The Chairman, said it was the responsibility of the board to plan for the long-term sustainability of the company, as scenario analysis on Seplat’s assets have been conducted under different climate change and demand scenarios. According to him, Seplat looks forward to a future in which it is much more involved in promoting low carbon environment in its operations, hence the adoption of the new name, Seplat Energy, as its new name.
In the same vein, Mr. Roger Brown, Chief Executive Officer, Seplat, said there is pressure to reduce oil extraction and the carbon emissions it creates; but that, he noted, depended on the rest of the world adopting less oil-intensive ways to travel and generate power.
He explained: “Nigeria’s per-capita energy consumption and carbon emissions are actually very low, and its national electricity grid is still very poorly developed. This is why the country is so reliant on small-scale diesel generation to satisfy its energy needs and this is the problem we need to address most urgently.
“It’s important to recognise that Nigeria is a developing country with low access to energy and a rapidly growing young population. Hydrocarbons are the country’s main resource and provide significant help for its economy. The proceeds from the oil industry fund a wide range of Sustainable Development Goals (SDGs) and are crucial to the country’s societal development.
“Nigeria needs to achieve significant growth in its capacity to deliver education and health services, food production and energy security. Without the development of its indigenous oil and gas industry these goals will become very difficult to achieve and so in Nigeria, the industry remains not just relevant but essential.”
According to Mr. Brown “Seplat is embracing climate change opportunities on two fronts. Firstly, we continue to invest heavily in expanding our domestic gas business in line with the Government’s strategy to achieve universal access to electricity, and to make that energy cheaper and cleaner by replacing diesel generation, which is very damaging to the environment and the economy. Gas is clearly the next step for Nigeria, and we have a leading position domestically with the Nigerian Government declaring the ANOH project as one of the seven critical gas development projects for the country.
“Secondly, we have created a New Energy unit to focus on lower carbon to zero carbon fuel sources and the natural extension beyond gas is for Seplat to participate in renewable energy, such as solar power, and in emerging technologies such as carbon capture and storage.”
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