LAGOS (Reuters) – Nigerian oil and gas company Seplat is aiming to cut costs and is looking to buy even after the crash in crude prices eroding its 2020 revenues.
Seplat’s revenue slipped 24% in 2020 to $ 530.5 million, the company said Monday, but CEO Roger Brown said its strong cash generation and focus on gas made it a “strong business. ”
Seplat shares on the London Stock Exchange traded around 2% higher at 82.8 pence at 1100 GMT. It is also listed in Lagos.
COVID-19 will reduce global fuel demand, driving oil prices down to near 20-year levels. Seplat’s average oil price fell 38% last year to $ 39.95 per barrel. Gas sales also fell, due to limited demand due to the pandemic and delays in production. [O/R]
The fall brought annual earnings before tax, depreciation and depreciation down 44.7% to $ 265.8 million. Sep lat also maintained a discount of $ 144.3 million due to the revaluation of assets and financial asset costs amid the price crash.
COVID-19 delay pushed the end of the planned completion of the Assai North-Ohaji South (ANKH) gas processing plant to early 2022, from the fourth quarter of 2021, and delayed progress on the Amukpe pipeline -Escravos, an alternative to the Trans Tornados pipeline that was Sep lat hopes will help it stop the 9.4% of oil it loses as a result of theft.
However, Sep lat cut $ 17 million in costs in 2020, and is aiming for 30% in additional cost cuts in 2021.
Shares in London at Sepal fell as low as 46.10 on March 20 last year with the impact of pandemic markets but since the end of October they have been rising steadily although still well below 128 pence , their rate at the beginning of 2020.
Brown told Reuters in an interview that ended funding for ANKH, a contract to supply oil to Walters modular purists, and rising Nigerian power tariff prices were other positive developments.
Sep lat delivers 30% of the gas to Nigeria’s energy sector.
Brown said Sep lat was expected to eliminate its gas fuel by 2023, and said the relocation of international oil majors would create ample construction opportunities.
“Companies like ours that are well run and well capitalized … we will start to see some great opportunities in the coming years,” he said.
Reciting with Libby George; Edited by Susan Fenton