Seplat’s Half-Year performance signals new era of growth for Nigeria’s indigenous energy champion

By Onu Okorie

Seplat Energy has delivered one of the strongest financial performances in its history, posting a 498 per cent surge in profit after tax for the first half of 2026. A statement made available to the media in Lagos explained that higher oil prices, increased production and disciplined financial management combined to strengthen the company’s position as one of Nigeria’s leading independent energy producers.

The company’s unaudited results for the six months ended June 30, 2026, show a business benefiting from favourable global crude prices while also demonstrating operational efficiency, lower debt, stronger cash flows and growing shareholder returns. Beyond the impressive financial numbers, the performance also reflects broader developments in Nigeria’s oil and gas industry, where indigenous operators continue to assume larger roles in upstream production.

Profit after tax climbed to $164 million from just $27 million recorded in the corresponding period of 2025, while revenue increased by 30 per cent to $1.82 billion. Gross profit also jumped by 68 per cent to $815.9 million, underlining the company’s ability to convert higher production and favourable pricing into significantly improved earnings.

The company’s adjusted EBITDA rose to $939 million from $735 million a year earlier, while cash generated from operations reached nearly $986 million, providing management with the financial flexibility to reduce debt, invest in operations and reward shareholders.

Underlying Seplat’s improved earnings was stronger operational performance across both its onshore and offshore assets.

Average production during the first six months stood at 139,509 barrels of oil equivalent per day (boepd), representing a four per cent increase over the same period last year and remaining comfortably within the company’s production guidance of between 135,000 and 155,000 boepd for the year.

Production accelerated further during the second quarter, averaging over 149,000 boepd, reflecting improved output from several producing assets.

Onshore operations contributed more than 60,000 boepd, recording double-digit year-on-year growth, while offshore production remained largely stable despite temporary operational challenges.

One of the major operational successes was Seplat’s idle well restoration programme, which restored 24 previously inactive wells and added approximately 26,000 barrels of gross joint venture production capacity.

Natural gas liquids production also more than doubled compared to the previous year, highlighting the growing contribution of gas assets to the company’s overall portfolio.

A supportive international oil market significantly strengthened Seplat’s earnings during the reporting period.

The company realised an average crude oil price of $94.13 per barrel—approximately $7.47 above the Brent benchmark—allowing higher revenues despite only modest production growth.

Although operating costs increased to $15.8 per barrel of oil equivalent, largely due to restoration work at the Yoho field, management noted that excluding those exceptional costs, operating expenses remained broadly under control.

The higher commodity prices translated into stronger operating margins, enabling the company to generate almost $1 billion in operating cash flow within six months.

One of the standout features of Seplat’s half-year performance was its aggressive debt reduction strategy.

The company repaid and cancelled $200 million under its Advanced Payment Facility, reducing the outstanding balance to $100 million.

Consequently, net debt declined by 45 per cent to $370.7 million compared with the end of 2025, while the company’s leverage ratio improved significantly.

Cash holdings also strengthened, rising to $433.8 million, excluding restricted cash balances.

The stronger balance sheet has also received international recognition, with Standard & Poor’s upgrading Seplat’s credit rating to B+ earlier this year.

Shareholders emerged among the biggest beneficiaries of Seplat’s strong financial performance. The Board declared a quarterly dividend of 12 US cents per share, comprising a five-cent core dividend and a seven-cent special dividend.

Management has also outlined plans for a total dividend of 45 cents per share for the full year based on operational performance.

In addition, subject to regulatory approvals and completion of the planned transaction involving the sale of a 10 per cent interest in the NNPCL-SEPNU Joint Venture to NNPC Limited, shareholders are expected to receive an additional transaction dividend of 23.3 cents per share.

If completed, total dividends for 2026 would reach 68.3 cents per share, representing approximately $410 million in shareholder distributions—about 173 per cent higher than the previous year.

Beyond current financial performance, Seplat is repositioning its portfolio through a strategic agreement with NNPC Limited.

The company has agreed to sell a 10 per cent interest in the NNPCL-SEPNU Joint Venture for approximately $281.6 million.

Management plans to split the proceeds equally between additional shareholder distributions and further debt reduction.

The transaction illustrates how indigenous operators are increasingly restructuring portfolios to optimise capital allocation while maintaining growth.

Despite expanding production, Seplat continued to improve its environmental and safety performance.

Group-operated assets completed 18.8 million man-hours without a lost-time injury, underscoring the company’s commitment to operational safety.

Carbon emissions intensity also fell by 18 per cent year-on-year, while emissions from onshore operations declined by 37 per cent following continued implementation of its End of Routine Flaring programme.

The environmental improvements align with growing global expectations for cleaner hydrocarbon production even as demand for oil and gas remains strong.

The results also mark the closing chapter of Roger Brown’s tenure as Chief Executive Officer. Effective August 1, 2026, Engr. Effiong Okon will assume leadership of the company, while a further governance transition will occur in January 2027 when Mr. Tony O. Elumelu succeeds Senator Udoma Udo Udoma as Chairman of the Board.

Brown described the company as stronger than ever, noting that production is expected to increase further in the second half of the year as temporary operational constraints ease and planned development activities are completed.

Seplat has maintained its production guidance of between 135,000 and 155,000 barrels of oil equivalent per day for 2026 and expects capital expenditure of between $360 million and $440 million, with spending weighted toward the second half of the year.

The company’s strong first-half performance demonstrates how favourable oil prices, disciplined capital management and expanding production can combine to create substantial value. More importantly, it reinforces the growing importance of Nigerian indigenous energy companies in driving production growth, strengthening national energy security and attracting investor confidence in the country’s oil and gas sector.

With stronger cash flows, lower debt, record dividends and an evolving leadership team, Seplat enters the second half of 2026 from a position of considerable financial strength, while its planned partnership restructuring with NNPC could further reshape its long-term growth trajectory.