Seplat Energy Plc · LSE:SEPL
Seplat Energy — Seplat Petroleum Development Company — H1 2020 Earnings Presentation
22 slides from Seplat Energy's earnings presentation, Jul 29, 2020
Slide 1: Resilience and Strength: H1 2020 Results
RESILIENCE AND STRENGTH 2020 H1 RESULTS 29 JULY 2020 www.seplatpetroleum.com
Slide 2: Introduction
2 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC INTRODUCTION Austin Avuru Chief Executive Officer www.seplatpetroleum.com
Slide 3: H1 2020 Key Macroeconomic Events
H1 2020 KEY MACROECONOMIC EVENTS An unprecedented period of volatility as twin shocks hit the oil market › Oil price recovering after twin shocks of COVID-19 BRENT FUTURES IN H1 2020 ($) demand drop and KSA-Russia price war 80 › OPEC+ cuts will reduce Seplat’s W.I. quotas in 70 July/August but littl
Slide 4: H1 2020 Highlights
H1 2020 HIGHLIGHTS Seplat delivered production well within guidance and maintained a healthy cash balance despite low oil prices A STRONG PERFORMANCE DESPITE CHALLENGING MARKET KEY FIGURES › 51,177 boepd total › $34.94/bbl realised VOLUMES WITHIN GUIDANCE Production across H1 2020 › Liquids 34,117 b
Slide 5: Operations Update
5 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC OPERATIONS UPDATE Effiong Okon Operations Director www.seplatpetroleum.com
Slide 6: H1 2020 Working Interest Production
H1 2020 WORKING INTEREST PRODUCTION Volumes are well within guidance for 2020 despite severe market challenges in second quarter boepd 60,000 FY 2020 guidance Oil production unchanged at PERFORMANCE 47-57kboepd Gas production 49,867 51,177 › Average W.I. production in H1 2020: 50,000 48,491 51,177 b
Slide 7: Update on Operations in H1 2020
UPDATE ON OPERATIONS IN H1 2020 Focus on well development and reducing costs OIL BUSINESS GAS BUSINESS › OML40 and Ubima production now included, contributing › 99 Mscfd achieved across six-month period was nearly a third of oil production significant increase on 88Mscfd achieved Jan-March › 76% upt
Slide 8: Accident at Benin River Valve Station on OML40
ACCIDENT AT BENIN RIVER VALVE STATION ON OML40 Investigation has commenced into explosion on maintenance barge SUMMARY › Seven fatalities amongst third-party contractors; our thoughts and prayers are with the families and friends of all those who lost their lives › No other casualties reported, no e
Slide 9: Financial Performance
9 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC FINANCIAL PERFORMANCE Roger Brown Chief Financial Officer & CEO Designate www.seplatpetroleum.com
Slide 10: H1 2020 Financial Highlights
H1 2020 FINANCIAL HIGHLIGHTS Cash balance increases, NPDC receivables fall, capex increased and 2019 final dividend paid. REVENUES LOSS BEFORE DEFERRED TAX CASH AT BANK 34% 221% 3% US$234 million US$145 million US$343 million Impact of COVID-19 and oil price fall Loss results from IAS36 impairment C
Slide 11: H1 2020 Financial Results
H1 2020 FINANCIAL RESULTS A profitable business with strong cash flow generation and a robust balance sheet $ million H1 2020 H1 2019 Change Total revenue 233.6 355.1 (34.2%) › H1 2020 results reflect contribution of Eland, acquired at the end of Q4 2019 Cost of sales (195.9) (148.0) 32.9% › Lower o
Slide 12: Cash Generation Strengthens Balance Sheet
CASH GENERATION STRENGTHENS BALANCE SHEET Strong cash generation and diligent management of Group liquidity Hedging strategy of put options to 600 provide cash flow assurance Q3 Q4 Q1 Hedge 2020 2020 2021 10.0 4.7 2.0 1.8 176.2 500 Amount 1.5 MMbbl 1.5 MMbbl 1.0 MMbbl Price $45 $30 $30 -86.0 400 -30
Slide 13: Robust Capital Structure
ROBUST CAPITAL STRUCTURE Seplat is in a position of financial strength to capitalise on profitable opportunities › Capital structure amended following acquisition of Eland Oil & Gas PLC NET DEBT POSITION REFLECTS STRONG CASH BALANCE › $100m Eland reserve-based loan now part of structure. › $300m Sep
Slide 14: Clearly Focused Capital Allocation Priorities
CLEARLY FOCUSED CAPITAL ALLOCATION PRIORITIES We are focused on low-risk strategies to generate and deploying cash to grow the business and improve stakeholder returns GAS BUSINESS › Pay down $350m › Invest in growing the gas business Revolving Credit Facility to fuel Nigeria’s increasing demand LOW
Slide 15: Outlook
15 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC OUTLOOK Austin Avuru Chief Executive Officer www.seplatpetroleum.com
Slide 16: Appointment of Emeka Onwuka as New CFO
APPOINTMENT OF EMEKA ONWUKA AS NEW CFO Brings substantial financial and board-level experience CAREER HIGHLIGHTS › Joins Seplat’s Board as CFO and Executive Director on 3 August 2020 › More than 30 years’ experience in financial services in Africa › Most recently Partner & Head, Private Clients & Fa
Slide 17: Outlook for 2020 and Drivers of Future Value
OUTLOOK FOR 2020 AND DRIVERS OF FUTURE VALUE Short term focus on efficiency, cash generation, longer term significant growth prospects SHORT TERM VALUE DRIVERS (0-2 YEARS) GUIDANCE FOR 2020 1. Increase in production from Eland’s OML40/Ubima fields, with exports not dependent on Seplat’s existing exp
Slide 18: Appendix
18 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC APPENDIX www.seplatpetroleum.com
Slide 19: A Rich Portfolio of Oil & Gas Assets
A RICH PORTFOLIO OF OIL & GAS ASSETS Eight oil and gas blocks in the prolific Niger Delta, ideally located for export or internal demand centres W.I. 2P reserves * W.I. production MMboe H1 2020 boepd OML 38 Block Share Partner Oil Gas Total Oil Gas Total OML 40 OML 4, 38, 41 45% NPDC 164 118 282 19,
Slide 20: Proven Resilience Through Prudent Management
PROVEN RESILIENCE THROUGH PRUDENT MANAGEMENT Financial discipline and a robust business model have protected Seplat through difficult times INCREASING GAS VOLUMES FOR GROWING MARKET NEEDS FOCUSED CASH MANAGEMENT STRATEGY 49,867 $900 50,000 46,498 $900 Gross debt ($m) $259m OML 53 Oil Gas 43,372 acqu
Slide 21: Westport Loan Repayments Underpin Future Cash Flow
WESTPORT LOAN REPAYMENTS UNDERPIN FUTURE CASH FLOW Seplat has acquired the right to be repaid more than $414m between 2021-24 When Seplat paid EV $450m for Eland it acquired: › Eland’s 20.25% share of OML40 › The right to be repaid $410m by Westport Westport repays $414M to Seplat via Eland Owns 100
Slide 22: Head Office, London Office, Investor Relations
Head Office Seplat Plc 16A, Temple Road, Ikoyi, Lagos, Nigeria. +234 (0)1 277 0400 info@seplatpetroleum.com www.seplatpetroleum.com London Office Seplat UK Ltd. 4th Floor, 50 Pall Mall, London SW1Y 5JH +44 (0)20 3725 6500 Investor Relations CFranklin@seplatpetroleum.com AAliyu@seplatpetroleum.com
Seplat Petroleum Development Company — H1 2020 Earnings Presentation on 6ix