Seplat records loses in Q1’17, ramps up operations in Q2

By Prince Okafor

THE sharp decline in global crude oil prices and export disruptions have left Seplat Petroleum Development Corporation Plc, an indigenous oil and gas company, in a negative top-line and bottomline in the first quarter 2017. But the company is stepping up operations in the second quarter while writing down its huge debt portfolio.

In its 2017 first quarter 2017, (Q1’17), results and Interim Management Statement, IMS, the company’s revenue dropped by 43.3 per cent to $47.3 million as against $83.4 million Q1’16, while gross profit stood at $19.1 million.

The company disclosed that 22 per cent year-on-year reduction in general and administrative expenses, G&A, helped narrow its operating loss to $1.3 million while loss for the period after net finance costs was $18.3 million and loss after tax average $19.1 million.

Seplat pointed out that it has completed upgrades and repairs on one of its two jetties at the Warri refinery and barging operations are being re-established with loading of one 100,000 barrel, bbl, cargo from the upgraded jetty completed on 27 April, 2017.

“Work on the second jetty is progressing well and on-track to be operational during second quarter (Q2). The upgraded jetties will enable sustained exports of 30,000 bopd (gross).”

“Completion of the 160,000 barrel of oil per day, (bopd) Amukpe to Escravos pipeline prioritised by the Nigerian government and anticipated in second half of the year (H2) 2017, as Forcados Terminal remains under force majeure at the date of this announcement,” the report reads.

According to the company’s Chief Executive Officer, Austin Avuru, “The first quarter of 2017 is a transitionary period for Seplat in which our oil sales have been constrained whilst we electively undertook the necessary upgrade and repair work on two jetties at the Warri refinery to give us the future benefit of doubling barging volumes and stabilising exports via that route at a gross rate of 30,000 bopd.

”Alongside this we are collaborating with and supporting government on completion of the Amukpe to Escravos pipeline that will offer a third export route to Seplat and help to significantly de-risk the distribution of our oil production to market.

”These proactive management actions, combined with the consistently strong performance of our gas business and continued strict financial discipline to preserve a liquidity buffer, should lead to a much improved performance outlook over the remainder of 2017 and beyond, with a much greater level of in-built resilience to such external shocks.”

The report further noted the company continued to reduce debt, in other to improve balance sheet and preserve liquidity buffer.

Principal repayments debt made in Q1 stood at $33 million. Gross debt as at 31 March average $643 million (down from $676 million at 31 December 2016) and net debt $487 million (down from $516 million at 31 December 2016).

 

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