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Tyler I think that means local work, services etc paid for in Naira is more expensive to SEPL.
However the majority of services are USD related, so a strong Naira has a small/marginal downside.
A strong Naira will improve the long term stability of the countries economy, which is a positive for everyone.
MEM
The Nigerian Naira has become the world’s best performing currency in recent weeks and may explain the recent price spike. Another tick in the box. Anticipate further analyst upgrades on the back of this and rising oil price.
https://abokifx.com/news/nigeria-s-naira-rebounds-sharply-after-bumper-interest-rate-rises-ft?type=market
Not expecting any significant news on MPNU on Monday but any update would be a bonus. GLA!
OML40: https://www.seplatenergy.com/our-company/our-operations/upstream/oml-40/
Seplat has invested in a professional IR executive, James Thomson, who has already improved communication in terms of written statements with more granular explanation, more video interviews, better format of quarterly results call, and more active direct communication with shareholders and potential shareholders. It takes time to build a following after years of underinvestment in IR.
Most importantly, a clear intention to drive the dividend has been communicated, which comes on the back of several years of dividend consistency - this is very important in raising interest in the stock.
An NYSE listing would not add any value at all, IMO.
More importantly, every step up in the dividend attracts attention and underpins step ups in the share price.
MPNU will be transformational and raise the share price and daily traded liquidity - increased traded liquidity will allow institutions to enter the name, which is key. In short, when daily traded liquidity moves towards $1m/day, there will be a natural upwards re-rate as institutions come in.
In my view, we have a pretty clear roadmap here, and it's all very positive
Hi Trek,
Hi Trek (or anyone else) May I ask what happened re the planned drill of OML 40, I know it should have been drilled but Covid got in the way.
I have just gone through almost 4 years of RNS’s and cannot see any mention of SEPL drilling this area, can you please update me, THANKS
One last question, from a EV standpoint, SEPL seems very undervalued, does the Co have a plan to try and increase our ‘visibility’ maybe a series of road shows, any talk of a NYSE listing ?
Thanks in advance
MEM
With a well covered 25p net divi this share is surely going to reach £2.50+ at that point, a 50% rise from here.
An easy 2 bagger for me at my average, more so after taking account of the divis along the way
In my view, Monday will not herald much of note, other than solid operating performance, although perhaps the board raises the quarterly dividend, which I hope they do. They can move to paying the 15 cents over four quarters, which will be 3.75 cents/quarter, and then raise the dividend significantly from there in Q1 2025, as they have indicated they will do, when either ANOH is operational or MPNU is consummated. Everything we have been told to date suggests, in translation, that the dividend should increase by at least 20 cents (my estimate) when ANOH and MPNU are put to bed. That will make 35 cents of annual dividend. That is 25 pence of dividends annually in the pocket, with plenty of free cash generation left over for expansion projects in gas and recovering production of MPNU.
I was excited to see there was a new RNS this morning, then quickly disappointed when I saw it was about currency exchange rate
Is there a whisper of news to be announced re the MNPU deal, maybe released on Monday ??
The offer price was 148p only a few days ago, then we went XD. And now the offer price is 168p all in the space of a week.
This feels very different !!
MEM
Q1 results will be out Monday 29th April.
Seems like yesterday but it’s a year since the smear campaign court case! A well deserved gong for SEPL pioneering in country governance! Sets the divestment foundations perfectly!
Usual caveats
Trek
Gong!
“ Seplat Energy, which is Nigeria’s leading indigenous energy player, was recognised for its effective corporate governance framework and corporate governance standards.
Seplat Energy also got recognition for its exponential growth for the period, which had translated into the creation of significant shareholder value and national wealth.
Energy Times is a leading weekly newspaper based in Lagos, Nigeria, focusing on oil, gas, power, maritime and renewable energy reportage.“
https://blueprint.ng/seplat-energy-emerges-energy-times-corporate-governance-company-of-the-year/
It’s sure has been a long wait be we have been well paid to wait!
Trek
Happy days Trek, MR Market is finally realising that this is a very attractive income play with step-ups (plural) in income in the near-term, plus various growth avenues once MPNU closes. Frankly, when MPNU is sealed all bets are off regarding where this business could go. We've been invested in this name since 2019/2020 I believe and it's been a long wait but so good to see the stars aligning at last.
I expected 6p off Gav and then a further drop over the next few days. That’s typical of many uk xd stocks atm.
But this today is indeed something special!
SP at 5 year high and heading to the 260 highs of the 2014 IPO ‘bathtub chart’ by looks of it!
That spike up from 148 hasn’t even been threatened.
Volumes are still low and liquidity is poor indicating there is potentially a background buyer for the London stock.
They ain’t having mine!
Nice to have a growth income play of scale!
Usual caveats
Trek
I will give this a final go, to finish my sentence! The other related point I was trying to make refers to Alex's nod to the "integrated" E&P aspect, and MPNU's related opportunity in gas to Europe. Seplat's growing midstream business is a long term contract fixed price business, which deserves a higher valuation, and this business will multiply in scale if SEPL can install infrastructure to process and export MPNU's huge gas reserves to Europe, again under long term contract. All of this comes on top of the core oil business's prolific cash generation. When the MPNU deal is cemented, this "hidden" upside comes into play.
Very welcome. Not bad for ex-div day when a 4p/5p drop might be expected.
Deal news must be soon.
The environment in Nigeria now appears to be conducive for growth. Reading the annual report, it appears that the company is at least thinking, if not planning, further acquisitions and bidding for new offshore licenses. Below are extracts from pages 28 and 29:
“To address the shift of international oil companies (IOCs) from onshore and shallow water investments to deepwater, an important initiative was announced in December 2022. This initiative involves an upcoming bid round for seven new offshore blocks, covering a significant area in water depths ranging from 1,150 to 3,100 meters. It aims to attract experienced local and international offshore exploration and production investors, promote energy security, generate substantial revenue, and foster partnerships within a fair and well-defined legal and regulatory framework”.
“Seplat’s reputation as a reliable partner makes it a preferred choice for incumbent asset owners seeking to engage in various Nigerian oil and gas transactions. Their strategic positioning positions them well to capitalise on future opportunities, including asset divestments from the IOCs, participation in upcoming licensing rounds, and farm-in prospects”.
SeaTank,
I agree with you, it’s undervalued on many fronts, even if we ignore the MPNU acquisition. There’s so much potential ahead for the company. Roger Brown has a number of times made the following statement:
“I think this year will be truly transformational for us, as we bring the ANOH gas project onstream and, I hope, complete the MPNU transaction and develop the four blocks that are in much need of investment to realise their full potential in both liquids and developing a very significant gas resource”.
Roger’s past performance shows he has credibility.
Starting a new chat since the other seems to have a bug. Point being many very low multiple E&Ps deserve to trade at a low multiples as they have short reserve life, some
My post was also cut short! Some tech issue/bug. I was just saying that not all multiples are equal and many very low multiple E&Ps deserve to trade at a low multiples as they have short reserve life, some
Thanks Alex, interested in your further thoughts.
You mentioned that SEPL is one of the cheapest valuation integrated player in the world. I agree and would make two specific points that relate:
1. SEPL's valuation multiple is of course very low indeed, but it is even cheaper than it looks because SEPL has a solid life span of reserves (25 years+), whereas most of the other cheap names in the market have much shorter life reserves, say 10-15 years or even
Yes, please, alex. Would really like to see!!
Alex - it was a great start. A new attempt will be welcome : )
Thanks for attempting to write a long detailed post, i share your frustration
MEM
Wrote a huge post and LSE just cut out 75% of it. What a frustration. Trying again next week.
SeaTank8300,
Thanks for your insights. You're completely on-point that Seplat is perhaps the cheapest integrated (up- & midstream) oil- & gas company that is listed, world wide.
After a meeting with management last month, I'm delighted to share these news on the topic of MPNU:
Royalties for shallow water is 17% i.e. lower than onshore.
Seplat is a huge winner of PIA, when that get implemented the coming years:
- "smaller fields" onshore (
Today is the last chance to get the quarterly and special dividend. Last year the share price took just 8 days to recover the value of the dividend adjustment. Suspect something similar will happen this year too given the stock's positive momentum.