By Udeme Akpan & Ediri Ejoh

There are indications that the recent increase in the profit of Seplat Energy Plc, a leading Nigerian independent energy company listed on both the Nigerian Exchange Limited and the London Stock Exchange, by 58.6 percent to N100.6 billion, from N57.9 billion, year-on-year, was a product of many enabling factors, especially good policies, excellent planning, thorough execution, respect for rules and a committed workforce.

Checks by Vanguard, weekend, indicated that the operations of the company, which gave birth to the impressive results, are strongly governed by good governance policies, including the Nigerian Code of Corporate Governance, Modern Slavery Act Statement, Code of Business Conduct, Investor complaints management, Related party transactions and guidelines, Share dealing, Whistleblowing, Inside information disclosure, Conflict of Interest for Employee and Directors, Anti-bribery and corruption and Asset management.

These and other policies and practices consciously guided the company in acquiring, developing, operating and managing oil and gas assets, targeted at delivering maximum value to its stakeholders, especially shareholders, the government, host communities and employees.

We are committed to highest standards

For instance, in its  Nigerian Code of Corporate Governance policy, obtained by Vanguard, Seplat Energy Plc, which expressed commitment to good corporate governance, stated: “The Nigerian Code of Corporate Governance, 2018 (NCCG 2018) seeks to institutionalize corporate governance best practices in Nigerian companies.

It is also aimed at increasing entities’ levels of transparency, trust and integrity, and creating an environment for sustainable business operations. The Code adopts a principle-based approach in specifying minimum standards of practice that companies should adopt.”

Similarly, in its Conflict of Interest for Employees and  Directors Policy, the company, stated: “SEPLAT is committed to the highest standards of business ethics, honesty, fairness and transparency. Upholding this commitment means that our business decisions cannot be influenced by our private interests or the interests of our immediate family members and close associates.

The existence or perception of a Conflict can harm the reputation of SEPLAT, undermine the trust that the public has in SEPLAT, and affect the ability of SEPLAT to raise funds in the capital market. Our good reputation is one of our greatest assets and must be protected with the highest level of business ethics.”

Also, in its Modern Slavery Act Statement policy, it maintained that, “SEPLAT takes a zero-tolerance approach to Modern Day Slavery and will work to continually assess the extent of this risk and take steps to ensure that forced labour has no place in the business or its supply chain. We rely on local and international suppliers in our operations.

Prior to contract award, we raise awareness among our suppliers of our Code of ethical conduct and require Compliance questionnaires to be completed to ensure compliance with international best practices in labour, manufacturing and procurement activities; including a requirement for our suppliers to comply with all applicable anti-slavery and human trafficking laws.”

Impressive results

Recently, in its unaudited results for the three months ended March 31, 2022, the company recorded a rise in profit before tax by 197.8 percent to N34.7 billion from N10.6 billion year-on-year, adding that cash generated from its operations amounted to N74.4 billion from N1.7 billion year-on-year, rising by 197.8 percent.

According to the company, its gross profit soars to N48.8 billion from N20.1 billion year-on-year, rising by 122.3 percent.

Specifically, the company, which harped on safety, stated: “Seplat Energy demonstrated a strong safety record, which extended to 26.1 million hours without LTI from operated assets (2.0 million hours in Q1 2022). Strong safety record extended to 26.1 million hours without LTI from Seplat Energy operated assets.

“Working interest production averaged 47,603 boepd (liquids 29,079 bopd, gas 18,524 boepd). Full-year guidance remains unchanged at 50-60 kboepd.

“Amukpe-Escravos Pipeline mechanically completed, all commercial terms have been agreed and are moving through counter party approval processes for signature. Expected to be fully operational by end of Q2 2022.

 “Sibiri exploration well drilled and successful, data analysis underway, working with a partner to secure regulatory approval for Extended Well Test. Decision to exit Ubima to focus on more profitable assets; agreement reached to sell Seplat Energy’s share to its JV partner for $55 million.  2P reserves reduce by 2 MMboe from 457mmboe to 455 MMboe.”

 It also added: “Sales & Purchase Agreement signed on 25 February to acquire Exxon’s shallow water operations in Nigeria, Mobil Producing Unlimited, Nigeria (MPNU). The acquisition remains on track and awaiting necessary approvals, expected to complete in H2 2022.”

Roger Brown, CEO, comments

Commenting on the results, Mr. Roger Brown, Chief Executive Officer, Seplat Energy Plc, said: “Seplat Energy delivered a good quarter that benefited from higher oil pricing, which offset lower production owing to continuing problems with the Trans Forcados Pipeline.

However, the alternative Amukpe-Escravos Pipeline is mechanically complete and once we have signed the commercial agreements, we expect Chevron to be lifting our oil through the Escravos Terminal in the third quarter.

“Our proposed acquisition of MPNU remains on course. We are awaiting the necessary approvals from the government and regulators and expect the transaction to complete in the second half of this year. The effective date of 1 January 2021 means we will benefit from higher recent oil prices and as we have previously reported, the addition of MPNU will nearly treble our production and double our reserves on a pro forma 2020 basis.

“The acquisition will reinforce our leadership of Nigeria’s indigenous energy sector and enable us to generate strong future cash flows that will underpin our investment in Nigeria’s energy transition and improve our overall stakeholder returns. It will also bring a significant undeveloped gas resource base which, alongside our ANOH gas project development, will underpin Nigeria’s energy transition and drive domestic and export revenues when developed.

“We announce the decision to divest the Group’s interest in the Ubima marginal field for a consideration of $55million, which marginally reduces the company’s 2P reserves by 2 MMboe to 455 MMboe.

“We have proven we have the financial strength and credibility to attract international finance into Nigeria’s energy sector and this will help us in our aim to deliver energy transition and provide cleaner, more reliable and more affordable energy for Nigeria’s young and growing population.”