Seplat Energy: Reaffirming Commitment To Corporate Governance, Growing Shareholders Wealth

Seplat Energy PLC, Nigeria’s leading indigenous energy company listed on both the Nigerian Exchange Limited (NGX) and the London Stock Exchange (LSE), convened its 11th Annual General Meeting (AGM) virtually, with esteemed shareholders, regulators, company directors, and members of the media joining to engage in strategic discussions and decisions shaping the company’s future.

Seplat Energy’s shareholders also approved the payment of a total dividend of US 15 cents by the Company as recommended by the board. This comprises a special dividend of US 3 cent per share for the 2023 business year aside the core dividend of US 12 cent per share.

In his address to shareholders and other stakeholders during the AGM, Senator Udoma Udo Udoma, Chairman of the Board, Seplat Energy, provided insights into the company’s financial performance for 2023, highlighting Seplat Energy’s robust financial results, including an 11.5 percent increase in total revenue to $1,061.3 million, crossing the $1.0 billion mark for the first time.

Udoma said: “We delivered a strong set of results in 2023, against a weaker oil price environment. Despite the 17.0% decline in average price of Brent crude, we grew our oil and gas revenue by 11.5 per cent to $1.061 billion, crossing the $1.0 billion mark for the first time, supported by improved production and asset availability.

“ We also made significant progress on several of our growth projects, showing a willingness to not just deliver value today but to plan for tomorrow.

“Our average daily production also increased by 8.3 per cent in 2023, to 47,758 boepd (barrels of oil equivalent per day), from 44,104 bopd in 2022, with revenue from oil and gas sales for 2023 rising to 11.5 per cent to $1.061 billion from $952.0 million in 2022. This excludes the reported $98.9 million overlift. We also completed 14 new wells across our operated and non-operated assets.”

While speaking to the company’s strong financial position, Mrs. Eleanor Adaralegbe, Seplat Energy’s CFO-designate, stated that the board recommended a total dividend of US 15 cents per share to be paid to shareholders for the 2023 business year, with a special dividend of US 3 cents per share, aside from the core dividend of US 12 cents per share, up 20 per cent in 2022.

According to her, this payment of the special dividend reflects the Board’s continued confidence in the future of the business and is underpinned by a strong balance sheet, crystallizing Seplat’s commitment to delivering value to its investors.

Mr. Samson Ezugworie, COO of Seplat Energy, provided insights into the company’s operational performance and strategic initiatives, stating that: “Till date, the company has achieved a cumulative 10.6-million-man hours since last LTI recorded on the 13th of October 2022. Safety remains our top priority. Several training sessions on Incident Management, Process Safety Management Training for Operations, Engineering, Maintenance, Wells, and HSE Team members were conducted over the past year to ensure our teams in the various asset locations are updated on the latest procedures on Safety.

“In addition to these, the company is on a path to achieving ISO 45001 and 14001 standards certifications, demonstrating its commitment to top-tier safety and environmental performance. These certifications are globally acknowledged benchmarks for occupational health and safety management systems and environmental management systems, respectively.”

Furthermore, the CEO of Seplat Energy, Mr. Roger Brown, reiterated the Company’s commitment to sustainability and energy transition, outlining Seplat Energy’s initiatives to increase its contribution to Nigeria’s power sector by providing lower carbon and renewable energy solutions.

He said: “As Nigeria’s leading indigenous energy company, we recognise our duty to minimise the impact of our operations on the environment.

“We aim to create increasingly sustainable energy solutions to provide access and meet increasing energy demand, while addressing the critical challenge of climate change for society and our business. We are positioned for decarbonisation through several strategic initiatives and continue in our role in leading Nigeria’s domestic gas supply, which accounts for about 25% of the country’s gas-to-power supply.

“A key focus for us has been the aggressive program to eliminate gas flares by 2025, which is a significant part of our commitment to achieving net zero by 2050.

“We are also exploring using solar power where feasible and have initiated a diesel replacement program to increase the use of gas, a less carbon-intensive fuel, for power generation in our operations. To support these decarbonisation efforts, Seplat Energy has committed substantial financial resources.

“In 2023, we allocated $5.7 million towards projects to end routine flares in operations. This includes installing gas compression facilities and incineration at various flow stations.

“Upon completing these projects, we expect to significantly improve our gas handling capacity and reduce flares, thus monetising flare gas in alignment with our corporate strategy and national initiatives.”

The AGM also celebrated the Presidential commissioning of the ANOH Gas Processing Plant, which took place on May 15, 2024.

The plant, a strategic milestone for Seplat Energy, is poised to enhance the company’s gas production capabilities and support Nigeria’s energy transition efforts.

Shareholders expressed their appreciation over Seplat Energy performance and dividend payout amidst challenging market conditions.

While commending the board and management for their effective leadership and prudent management of the company’s resources, a shareholder activist, Patrick Ajudua remarked: “I want to commend the dividend declaration by Seplat. They have earlier given us a special dividend of US 3 cents also, and this is a reassurance that investors needed to continue to invest in the company.

“ I also want to commend the financial performance which saw the gross earnings grow significantly. I want to state that the company has been doing well. I also commend Seplat on the ANOH project. We pray that the company continues to thrive despite the challenges in the industry.”

Faruk Umar, another shareholder activist, in his comments, said: “I am happy to say that Seplat has been helping the nation in the sense that the tax that we are paying the government is very significant, not to talk of the dividend that we have been getting in dollars, which has never gone down. Also, this is one of the three companies that I have seen in the capital market having many independent directors and this is good for corporate governance. Seplat’s dual listing is accompanied by the highest level of corporate governance adherence and this is good.”