by Jenifer Dike…..,
Seplat Petroleum, one of the Nigerian leading independent oil and natural gas producer, quoted in both Nigeria and London Stock Exchange has blamed it’s poor revenue outing in the first quarter of 2020 on stock build at the terminal (underlift) and low oil price occasioned by the coronavirus pandemic.
According to Seplat three months unaudited financial report ended March 31, 2020, the company revenue nose-dived from US$159.5 million same period in 2019 to US$130.5 million this Q1, about 18.5 percent less than the previous year.
The company’s financial report also recorded that impairment provision reversed a profit of the first quarter (Q1) 2020 of $39 million into a loss for the period under review of $107 million. Furthermore, the company noted impairment provision reduced non-current assets from $2.34 million to $2.20 million.
However, Seplat pointed out an Outlook of low cost of production which will enable profitability at levels below current oil price. The company is also expecting 2020 capex reversing upward to $120 million from $100 million, with two additional gas wells and related infrastructure.
The Managing Director of Seplat, Dr. Austin Avuru pointed out that inspite of the twin crises of significantly reduced oil demand and the price war, his company will continue to demonstrate its resilience because of its ongoing philosophy of prudent financial management. “The careful mitigation of risk and a keen focus on managing factors of the business that are within our control” Avuru said.
He noted the benefit of long-term contracted gas revenues that have so far insulated the company from oil market volatility. “We are achieving substantial cost reductions from our suppliers and managing our own costs even more carefully in this unprecedented and challenging period. We are in constant dialogue with partners on monies owed and are pleased to report that our cash flow remains robust and we have significant cash in reserve. This, coupled with the majority of our debt repayment obligations extending beyond 2021, gives us confidence that we can continue to operate comfortably within the covenants on all lines of debt” he said.