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(Alliance News) - Seplat Petroleum Development Co PLC on Monday expressed optimism despite the weak oil market.
Shares were 17% higher on Monday at midday in London at 54.00 pence each.
The Nigerian oil and gas firm reported a 6.5% fall in 2019 revenue to USD697.8 million due to both lower production and commodity prices.
However, pretax profit increased by 13% to USD270.3 million, with Seplat saying its low-cost production profile meant it can remain profitable even at low oil prices.
Seplat is paying a final dividend of USD0.05 per share for 2019. In 2018, the dividend was USD0.15.
Production in 2019 fell 6.8% to 46,498 barrels of oil equivalent per day, with the average realised oil price down 8.2% at USD64.40 per barrel and the gas price 3.4% lower at USD2.84 per million square feet.
The Covid-19 outbreak has sent oil prices plummeting, heading below the USD30 per barrel mark. Brent was at USD25.96 per barrel Monday at midday.
Looking ahead, Seplat has guided for production between 47,000 barrels and 57,000 barrels of oil equivalent per day.
"The emergence of the Covid-19 pandemic in the first quarter of 2020, as well as pressure on oil prices in March, have placed a premium on solid financial management that focuses upon low-cost production, robust cash management, a strong balance sheet and focused investment in high-return projects for sustainable future growth," said Seplat.
"The business is hedged against low oil prices and a significant proportion of our revenue now come from gas, which offers further protection from oil price volatility. The company has low production costs and can remain profitable even at lower oil prices.
"We have significant cash resources available and will manage our finances prudently in 2020, expecting now to invest just USD100 million of capital expenditure - USD50 million spent in first-quarter 2020 - with a target of three new wells across our portfolio. We will also continue to focus on our investments in gas and the completion of the ANOH project remains a major priority," it continued.
ANOH is a gas processing plant Seplat is building alongside Nigeria's National Gas Co.
By George Collard; georgecollard@alliancenews.com
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