Seplat Petroleum reports N12.8bn loss in HY1 2016
By Kayode Ogunwale
Seplat Petroleum Development Company Plc has reported a loss after tax of N12.8 billion for half year 2016.
The group loss after tax for the first six months was N12.8 billion, compared to N8.1 billion a profit in the same period in 2015.

Seplat Petroleum Development Company Plc is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, listed on the main market of the London Stock Exchange (LSE) and the Nigerian Stock Exchange (NSE).

Review of consolidated financial results for the period ended 30 June 2016 released to the Nigerian Stock Exchange, Wednesday in Lagos shows that gross revenue for half year 2016 was N29 billion, a decrease of 42 per cent compared to N48.8 billion of the same period in 2015.

Seplat crude revenue (after stock movements) was N19 billion for the first six months, a 57 per cent decrease from N43.5 billion in the same period of 2015.

Gas revenue for the period was N10 billion, a 78 per cent increase when compared with N5.2 billion of the same period in 2015.
It gross profit for the first six months was N12 billion, a decrease of 45 per cent compared to N21.4 billion of the same period of 2015. The movement is primarily driven by the significantly lower revenues recorded in the period out-weighing a 39 per cent reduction in cost of sales.

Direct operating costs decreased to N8 billion from N12.5 billion in the period of 2015, principally as a result of the shut-down of the Trans Forcados terminal.

Rig related and other field expenses, which form part of direct operating costs increased by 3 per cent compared to the same period in 2015 at N6 billion as a result of higher operation & maintenance costs.

The operating loss of Seplat Petroleum Development Plc’s for the first six months was N10 billion, compared to an operating profit of N13.9 billion in the same period of 2015.

Whilst the company awaits the outcome of a review by the Nigerian Investment Promotion Commission on whether an extension of the pioneer tax incentive will be granted beyond the initial three year period (which concluded at the end of 2015) the company has prepared its financial statements for the first six months excluding the effect of pioneer tax status which correspondingly forms the basis of the current and deferred taxation of N0.7 billion compared to N0.43 billion for the same period in 2015.

Commenting on the result, Seplat’s Chief Executive Officer, Austin Avuru said, “The shut-in and suspension of oil exports at the Forcados terminal since mid-February means we have faced significant challenges in the first half of the year. However, our underlying fundamentals remain strong and we continue to invest to grow our gas business at a rapid rate.”

He explained that, “the first half results have been heavily impacted by events outside of the company’s control at third party operated infrastructure. We expect the second half to see a resumption of exports via the Forcados terminal and concurrently a regular offtake schedule established via the Warri refinery jetty, which in turn will also help ensure gas sales into the domestic market are de- constrained. Meanwhile, Phase II expansion of the Oben gas processing plant remains on track and is set to increase our gross processing capacity from the current 300MMscfd to a minimum of 525MMscfd by year end. Although 2016 to date has proven challenging, we remain committed to our long-term strategy of maximising production and cash flows from our operated blocks to deliver value for our stakeholders.”