The Chief Executive Officer of Seplat Petroleum Development Company Plc, Mr. Austin Avuru has said the lower oil prices and downtime of third party operated infrastructure were responsible for the profit decline reported for 2015 financial year and a loss of N4.48 billion in the first quarter (Q1) of 2016.
Seplat’s profit after tax declined by 67 per cent in 2015 to N12.993 billion, from N40.481 billion in 2014. It posted a loss after tax of N4.48 billion for the Q1 of 2016, as against a PAT of N4.87 billion in 2014.
Addressing stockbrokers and management of the Nigerian Stock Exchange (NSE) yesterday at the company’s “Facts behind the figures” presentation, Avuru said: “Although production was up year-on-year, the significantly lower oil price realisation and downtime of third party operated infrastructure adversely impacted revenue, more than offsetting the increased contribution of the gas business.”
According to him, in 2015 the company delivered on what was in its control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come.
He explained that the company acted quickly and decisively in response to the weak oil price environment, adjusting its work programme and cost structures.
“Against a bleak industry backdrop, we remained profitable with a strong balance sheet underpinning us. Having started the year strongly, our 2016 full year production expectation has been impacted by the current shut-in of the Forcados terminal. However, we are much better positioned to withstand such interruptions than in prior years,” he said.
Avuru disclosed that the company’s gas business takes on additional importance by providing a continuous revenue stream that is de-linked from the oil price.
“Our enlarged portfolio offers us the scope for greater diversification. I would like to re-emphasise that our strong focus remains on protecting the business and managing value through effective cost reductions, optimising operations, deleveraging and strengthening the balance sheet. This will strategically position the company to take advantage of opportunities that will inevitably follow this current downturn,” he said.
The CEO said looking ahead throughout 2016, the company has set full year production guidance at 41,000 to 48,000 boepd and expects its capital expenditures to be around $130 million.