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And Nigeria are loosing revs coz deal not done!
https://punchng.com/fg-may-revoke-unused-oil-well-licences-amid-30bn-loss/?utm_source=top-story&utm_medium=web
Trek
I heard rumours that it could have gotten done early last year but management screwed up and refused a compromise deal that was offered which just so happens to be on the same the terms that rumours say they've now accepted. The deal is that seplat will obtain 75% instead of 100% of mpnu and nnpc will get the other 25%, we'll see if this is true.
Deal was signed in Feb 22. Sounds ridiculous when you say it back!!
Https://punchng.com/tinubu-committed-to-conclusion-of-seplat-exxonmobil-deal-lokpobiri/
Hi buzz,
Not xd until 25/4/24. Payment 29/05/24 so should get the currency conversion rate on 26/04/24.
Usual caveats
Trek
Trek, cheers. I still cant see the currency exchange rate into GBP RNS
Hi buzz,
Mine are in an ISA with ii. I get paid in gbp. The divi is 3 cents a share and the currency conversion is announced by the company in advance of payment.
The next divi will be 6c as it includes a 3c special divi.
I am surprised at the pull back here today. Nigeria must be an international oasis and Nigerian HC’s will be in demand.
I get the macro impact from any hostilities and inflation but forecasts of $120 oil and local demand should net out favourably for sepl albeit obviously one would rather have a hassle free $80!
Usual caveats
Trek
Can somebody explain to me the dividend policy here. I can't see any currency conversion RNS for UK £p
Do dividends gate paid in £p to nominee accounts ?
Good news on TNP.
About time for an update on OB3 also , or ?
One thought i have had for the last year is how the Anoh condensate will reach the market without the exportpipeline operational, now that seems to get resolved ahead of Anoh /OB3 start-up.
"In response to recent concerns about a shortfall in our oil production during the first quarter of this year, I want to assure everyone that we're taking decisive measures to address the situation. The reported shortfall was mainly due to issues on the Trans Niger Pipeline and maintenance activities by some oil companies.
I'm pleased to announce that we've resolved these issues, and production is expected to return to previous levels very soon. Our oil production, including condensate, which was at approximately 1.7 million barrels per day, will soon be restored.
We're also actively evolving our policies to maximize the utilization of all available wells in Nigeria. This strategic move will help us increase production, thereby generating crucial revenue to stabilize our foreign exchange reserves and fund essential infrastructure projects outlined in the 2024 budget.
As we navigate through these challenges, I want to assure everyone of renewed hope. Let's all remain committed to ensuring the sustainability and growth of Nigeria's oil sector, which is vital for our economy.
Sen. Heineken Lokpobiri Ph.D."
https://twitter.com/senlokpobiri/status/1778843285944954986/photo/2
Look at Nigeria’s forecast population growth. It is imo an important long term investment factor for SEPL.
https://www.visualcapitalist.com/most-populous-countries-projected-populations-2075/
Usual caveats
Trek
Added 10k at the bell. Run of divi’s coming up is not to be snubbed at. And the last few times it went xd it either recovered like next two days or was divi agnostic!
Nigeria is looking pretty good from a macro perspective. They are everyone’s friend internationally and oil looks like it’s holding up well. Could even go higher. Domestically, economy is not so good atm as growth is constrained but demand is there.
Usual caveats
Trek
Nigeria needs to accept that fuel prices fluctuate; is it such a hard lesson to learn? The beneficiaries of subsidised fuel are black market traders who suck up all the supply and export it.
Reuters exclusive via power up email. Worth signing up for its free.
https://www.reuters.com/business/energy/nigerias-nnpc-faces-3-billion-backlog-petrol-payments-sources-say-2024-04-08/?utm_source=Sailthru&utm_medium=Newsletter&utm_campaign=Power-Up&utm_term=040824&user_email=b2e8c97ccc6ddb76107c5b8c6d401963987d41317d2787d216d506bcf903729b
Trek
I meant to say "insufficient traded liquidity"
Anyway, with the MPNU deal, ANOH, and the resultant the scaling up of the business in US$ revenue and profit terms, we hope more institutionals to be drawn to the stock which will support re-rating and improved liquidity and a virtuous circle in that regard.
I'm repeating myself but the fact the local line of Seplat is at >40% premium to SEPL (see here: https://afx.kwayisi.org/ngx/seplat.html) is so very telling. Presumably the locals see a valid reason for valuing Seplat at circa 210p/share. As I also mentioned before, exchange controls are no longer a factor in this discrepancy since the central bank of Nigeria cleared the FX backlog and basically released the currency to market forces. So this discrepancy is purely a market inefficiency, in my view. The challenge for SEPL has always been sufficient traded liquidity to draw in Institutional investors. But right now, that is a market mispricing opportunity for small investors.
Looks like the POO penny has dropped, I guess that’s a start!
Trek
Back to 150! Should be min. 200p excluding MPNU and 300p. including MPNU.
POO just has to be a factor the market will wake up to soon.
Not just driven by ME tensions but also now Ukraine being able to strike deep into Russia.
Russia don’t have the air defences to cover all their assets. Once some of these targets are taken off line then the pipes freeze and have to be re-drilled. That all takes time esp in Russia.
India and China will have to fill the gaps from elsewhere and OPEC have the taps cracked shut atm!
On a macro basis rates are coming down so economies will turn as USD pulls back.
Short of all out conflict the case for oil is quite bullish atm and SEPl are in a political and geographical sweet spot!
Ironically this narrative is being echoed in the gold price driving to knew highs!
SP here makes no sense atm. It’ll have to correct soon!
Usual caveats
Trek
The final and special dividends for 2023 have an Ex-date of 25 April, USD0.06 in total, or 4.3p in the pocket (net of withholding tax). Then we have the Q1 dividend with Ex-date of around 23 May, minimum USD0.03 or 2.25p in the pocket.
This is 6.45p of dividends (net) to shareholders within the coming 7 weeks - a 4.4% yield, just for sitting on the stock while we await the commercial launch of ANOH and formal sign-off of the MPNU acquisition.
Pretty sweet!
Https://techeconomy.ng/recovery-of-naira-linked-to-7bn-fx-backlog-clearance-bdcs-react/
In case you missed it, the CBN has cleared the forex backlog (first time in around ten years), which has resulted in the Naira appreciating the last two weeks. The Naira has appreciated more than 20%.
The local Naira share is still trading at NGN3370, which is a GBP equivalent of 210p.
That is a 44% PREMIUM to the London share.
I have tried to summarize the public comments about the deal in this sheet (link): https://i.imgur.com/Ct7oPZp.png
From what I can tell, there are no major objections in either 2023 and 2024 against the deal. It was also somewhat of a relief to read the paragraphs of the Exxon/NNPC JOA as it explicitly only states participating interests . Here's a link to that article: https://www.thisdaylive.com/index.php/2022/08/12/exxonmobil-seplat-deal-when-a-regulator-misinterprets-the-law
Friendly reminder that a +10% in Brent increases the profits with approx. $93m i.e. almost +70% YoY, based on 2023 numbers.
Link: https://i.imgur.com/xZ7sHW3.png
This does not included Abiele field, Sibir field, ANOH, MPNU or Sapele that all are coming online late 2024.
Somewhat a relief reading Bloomberg today, that all majors having issues finalizing their deals. Nigerian regulator gave a final assuring comment in the end.
(I would be more worried if it was only Seplat)
Bloomberg:
Oil Majors Frustrated by Slow Progress of Nigerian Asset Sales
Exxon Mobil Corp. agreed to sell its shallow-water oil assets to Seplat Energy Plc almost two years ago, but the transaction has yet to complete amid objections from state-owned Nigerian National Petroleum Co. Eni SpA and Equinor ASA are also waiting for regulatory approval to finalize the sale of Nigerian assets.
There is an “urgent need to conclude these transactions,” Osagie Okunbor, managing director of Shell Nigeria, said at a conference in Abuja this week.
Abdulrazaq Isa, chairman of Waltersmith Petroman Oil Ltd. — which is part of the Renaissance consortium acquiring Shell’s assets — said that approving the deals would help revive Nigeria’s flagging oil industry.
“This remains the most realistic and successful avenue to bolster national crude oil production by the turn of the decade,” said Isa, speaking as head of an association of indigenous oil producers.
Exxon said delays in approving the sale of its assets to London-listed Seplat were causing uncertainty for the communities and contractors that depend on those operations.
“It’s imperative that it’s concluded and that clarity is provided to everyone involved,” Exxon Nigeria Chief Executive Officer Shane Harris said at the same conference. “What’s really important is it helps resolve a significant amount of uncertainty that currently clouds thousands of people.”
Oando Plc’s acquisition of Eni’s Nigerian unit, which has interests in onshore oil and gas blocks and power generation, has been challenged by NNPC over the failure to obtain prior authorization.
“We do need the reviews, consent to come quickly,” said Oando Executive Director Ainojie Alex Irume. “We do need to get on these assets and start working on them.”
The departure of international oil majors from onshore operations in Nigeria has coincided with years of declining investment in the industry. The regulator said there was no lack of urgency on its part in approving deals.
“So let the message be taken home that the regulator is in no way trying to be a show-stopper in this respect,” said Gbenga Kommolafe, CEO of the National Upstream Regulatory Agency.
Ie,who has first refusal on the assets put up for sale.
Agree SeplW,that's why the wait very frustrating .
Although I note in Guyana, Exxon is trying to stop Chevron' s takeover of Hess using the same argument that the Nigerian state oil company used to stop our deal.