Seplat Petroleum Development Company has closed its 2018 operations with after tax profit down by 45% to N45 billion against a 500% advance in pre-tax profit to over N80 billion. A shift from a huge deferred tax credit in the preceding year to a tax expense in 2018 accounted for the profit drop, obscuring somewhat an exceptional performance the company achieved in the year.
The company accelerated field development activities across its portfolio during the year. The resulting increase in production volume, combined with firm oil prices, powered sales revenue growth. General cost moderation enabled the company to convert a significantly increased share of the earnings into profit.
The group’s full year working interest production for 2018 averaged 49,867 boepd, an increase of 35% year-on-year. Production of liquids rose by 44% and gas production grew by 27%. The average production uptime improved from 50% in 2017 to 85% in 2018.
Seplat’s group chief executive officer, Mr. Austin Avuru , said it was a year of excellent operational and financial performance for the company, providing a solid foundation for future growth. He disclosed his company’s resolve to launch into the next phase of growth for gas business as well as plans for new investments in existing oil assets.
Sales revenue grew by 65% year-on-year to N228.39 billion at the end of the year with gas sales contributing roughly 21% of the earnings. The company has thus sustained sales revenue growth for the second year since 2013 after a turnaround growth of 118% in 2017.
Gains in production volume and improved average prices of oil and gas account for the strong revenue growth. Weighted average oil price rose by 39% year-on-year to $70.1/bbl in 2018.
Sales revenue growth slowed down in the final quarter and the closing figure fell short of the projected figure of N243 billion for the year. Despite the strong growth, turnover still closed below the 2013 peak.
The group closed the 2018 financial year with an after tax profit of N44.87 billion, a drop of 44.7% over the N81.1 billion reported in 2017. This is slightly ahead of the profit projection of N41 billion for the company for the year.
The drop in after tax profit obscures a big event in the year – pre-tax profit multiplied six times to N80.62 billion in 2018. The picture is distorted by a shift from a huge deferred tax credit in the preceding year to a tax […]
