Weak oil prices and production outages weighed on reported half-year figures for Seplat Petroleum Development Company (SEPL), with gross profits of $109m (£70m) down 56 per cent on last year. Yet investors in the Nigeria-focused driller will be encouraged by evidence of genuine operational progress.
Seplat's share of daily production came in at 32,580 barrels of oil equivalent (boepd), comprising 23,705 barrels of liquids and 53.3m standard cubic feet of gas - up a fifth on the 2014 half-year. Output was held in check by 52 full and 25 partial days of downtime as a result of third-party infrastructure delays. Discount these outages and production would have been around 41,797 boepd, according to management. And the volume of natural gas that Seplat can sell into domestic markets has increased markedly due to the commissioning of the Oben gas-processing facility.
Although these production numbers bring some cheer, crude prices remain in the doldrums. Seplat's performance was aided by an increase in regional gas prices, but for oil it received an average price of $53.30 a barrel during the period, against $112.40 a year earlier – and there's no respite in the offing yet.
RBC Capital Markets expects full-year EPS of 25¢, against 50¢ in 2014.
| SEPLAT PETROLEUM DEVELOPMENT (SEPL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 96.25p | MARKET VALUE: | £533m | |
| TOUCH: | 96-96.5p | 12-MONTH HIGH: | 248p | LOW: 94p |
| DIVIDEND YIELD: | 6% * | PE RATIO: | 6 | |
| NET ASSET VALUE: | 252¢ | NET DEBT: | 61% | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 388 | 156 | 33.0 | nil |
| 2015 | 248 | 41.3 | 6.0 | nil |
| % change | -36 | -74 | -82 | - |
£1 = $1.55. *Excludes a 6¢ third-quarter payment | ||||
