Ziggy Ojiegbe

Seplat Energy has reported a solid financial and operational performance for the first quarter of 2026, posting higher revenue, profit growth and a significant increase in shareholder returns, despite operational challenges during the period.

Ad >>>

The dual-listed energy firm, quoted on the Nigerian Exchange Limited and the London Stock Exchange, announced an unaudited gross revenue of $840.7 million for the three months ended March 31, 2026, representing a 4 percent increase from the $809.3 million recorded in the corresponding period of 2025.

Gross profit for the period rose to $370.5 million, while profit after tax climbed to $37.9 million from $23.3 million year-on-year. Cash generated remained strong at $243.4 million, reflecting improved pricing and operational resilience.

The company realised an average oil price of $86.16 per barrel during the quarter and declared a total dividend of 9.0 US cents per share, comprising a base dividend of 5.0 cents and a special dividend of 4.0 cents. The payout represents a 96 percent increase compared to the first quarter of 2025 and an 8 percent rise quarter-on-quarter, with a total dividend cost estimated at about $54 million.

Operationally, Seplat recorded average production of 129,841 barrels of oil equivalent per day (boepd), a 9 percent increase from the fourth quarter of 2025. The company said crude and condensate liftings benefited from its put-option hedge strategy, which allowed full exposure to price upside and supported strong free cash flow generation.

However, onshore production declined by 10 percent year-on-year to 50,700 boepd, largely due to 38 days of unplanned downtime on the Trans Forcados Pipeline, a third-party operated infrastructure affecting its western assets. The company noted that pipeline operations resumed on March 24, with production levels now normalising.

Offshore operations performed more strongly, with production rising by 5 percent to 79,141 boepd compared to 75,478 boepd in the same period last year. The company also reported strong growth in natural gas liquids output, with working interest production increasing to 9,802 barrels per day from 3,376 barrels per day in the first quarter of 2025.

Seplat highlighted progress in its gas business, noting that first gas was achieved at the ANOH project in January 2026, contributing 17 million standard cubic feet per day, with further ramp-up expected from the second quarter. It added that the Yoho restart project remains on track for the second quarter of 2026, while the Oso-BRT 1 gas expansion is expected to commence in the third quarter.

The company’s idle well restoration programme also continued to deliver results, adding about 10,000 barrels per day of gross joint venture production capacity from eight wells.

Despite the strong revenue performance, unit production operating costs rose to $17.1 per barrel of oil equivalent, above its guidance range of $13.5 to $14.5, due to accelerated maintenance activities at Yoho and lower production volumes during the quarter. This contributed to a 7 percent decline in adjusted EBITDA to $371.3 million, representing a 44 percent margin, compared to $400.6 million in the same period last year.

Cash generated from operations increased by 10 percent to $337.9 million, while capital expenditure rose slightly to $42.6 million. The company said its capital spending is expected to accelerate in subsequent quarters in line with its growth plans.

Seplat maintained a strong balance sheet position, with cash at bank rising to $461.7 million at the end of March, up from $332.3 million at the end of 2025. Net debt reduced significantly to $531.6 million from $673 million, with the net debt-to-EBITDA ratio improving to 0.43 times.

The company also completed the refinancing and upsizing of its revolving credit facility to $400 million, reducing borrowing costs to SOFR plus 4.5 percent, an improvement from previous terms and resulting in overall savings.

On safety performance, Seplat reported over 9.1 million man-hours without a Lost Time Injury, including 3.0 million hours onshore and 6.1 million hours offshore.

Looking ahead, the company reaffirmed its 2026 production guidance of between 135,000 and 155,000 boepd, with expectations of flat crude and condensate output, alongside significant growth in natural gas liquids and gas production. Capital expenditure guidance remains at $360 million to $440 million, while unit operating cost guidance is unchanged.

Commenting on the results, Chief Executive Officer Roger Brown said geopolitical developments, particularly conflict in the Middle East, have reshaped the outlook for the oil and gas sector, creating opportunities for producers with strong asset bases.

He noted that although first-quarter production slightly missed internal expectations due to infrastructure disruptions, performance has improved in April, with output averaging about 153,000 boepd, highlighting the underlying strength of the company’s portfolio.

Brown added that with key projects such as Yoho set to return to production and the ANOH gas project ramping up, the company remains confident in meeting its full-year targets. He said Seplat would continue to pursue its growth-focused work programme in 2026, aimed at improving asset reliability and expanding its portfolio in line with its long-term strategy.

He described the results as a solid start to the year and expressed optimism that performance would strengthen further in the second quarter.