CAPTION: Seplat Petroleum Development Company Plc
The shares of Seplat Petroleum Development Company Plc sustained its rally to lead the price gainers’ chart at the stock market last week. The stock, which has witnessed an unprecedented recovery despite the decline in oil price, rose 12.4 per cent to close at N340 per share last week.
Seplat has jumped by 75 per cent within the last three weeks, rising from N194.25 to N340. While other stocks in the oil and gas subsector have witnessed bear run, Seplat has recorded a rally.
However, market analysts linked the renewed investor demand for the shares of the Seplat to the announcement of the company’s take-over of the operatorship of OMLs 53 & 55.
According to market operators, investors increased their demand for the stock after the Supreme Court ruling in favour of Seplat and Chevron Nigeria Limited in a litigation brought against both parties by Brittania-U Nigeria Limited.
The litigation had prevented the full transfer of a 40 per cent working interest in OML 53 and effective 22.5 per cent working interest in OML 55 (held through 56.25 per cent ownership of the share capital of Belemaoil Producing Limited) that Seplat had acquired from CNL in February 2015.
Reacting to development, Seplat had said: “We are naturally pleased with the ruling, not least because it means we are free to deploy our proven operating expertise and realise the significant reserve, production and value potential these blocks hold.”
According to the Chief Executive Officer of Seplat, Austin Avuru “to give an idea of scale, we estimate these blocks to hold recoverable volumes of around 200 million barrels of oil equivalent net to Seplat, a material volume by any standard and one which has now been unlocked for us.”
He explained that OML 53 fits neatly within their strategy of securing, commercialising and monetising natural gas in the Niger Delta to supply the rapidly growing domestic market and will further reinforce our position as a preeminent supplier of gas in Nigeria.
“OML 55 provides us with a number of attractive opportunities to boost oil and gas output, and is consistent with our strategy of prioritising those that offer near-term production growth, cash-flow and reserve replacement potential in the onshore and shallow water offshore areas of Nigeria,” Avuru said.