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LONDON (Alliance News) - Seplat Petroleum Development Co PLC Tuesday said its quarterly pretax profit halved from a year earlier on lower oil prices and production, but its gas production rose in the period and benefited from higher prices.
Pretax profit in the first quarter of 2015 totalled USD24.8 million, almost half the USD46.7 million profit reported in the same period a year earlier as revenue fell and costs rose.
The oil and gas exploration and development company operating in Nigeria reported a fall in revenue to USD131 million in the first three months of 2015, compared to USD146 million a year earlier. Of total revenue, oil sales fell 16% to USD120 million due to lower oil prices whilst gas revenue increased to USD11.0 million due to increased production capacity and workovers, it said.
Despite revenue falling, the company's cost of sales rose to USD58.4 million from USD52.9 million and finance costs doubled to USD18.3 million from USD9.6 million, alongside booking a USD2.0 million foreign exchange loss from a USD1.7 million gain a year earlier, partially offset by administrative expenses falling to USD28.7 million from USD38.6 million.
Net production in the quarter averaged 35,811 barrels of oil equivalent per day, up 63% from a year earlier and within the company's guidance of between 32,000 to 36,000 barrels per day, it said.
Average oil prices more than halved in the period to USD52.8 per barrel from USD112.9 per barrel in the first quarter of 2014. But gas prices were boosted to USD2.6 per million standard cubic feet from USD1.41 a year earlier.
"The first quarter has been a busy period for Seplat. Production has been strong, we have delivered material reserves growth when many of our peers have seen reserves decrease, grown our footprint in the Niger Delta to six blocks, re-financed our debt and expanded our gas business to increase domestic supply," said Austin Avuru, Seplat's chief executive officer.
"Whilst we continue to deal with the challenges presented by the lower oil price environment head-on, and have set the 2015 work programme accordingly, we are excited about the numerous growth opportunities available to us in our current portfolio and will remain opportunistic in respect of new business ventures," he added.
Seplat is also expecting further increases to gas production as it brings the 150 million standard cubic feet per day Oben gas plant into production. Commissioning work is completed and pre-start up checks are underway.
Seplat had a cash balance of USD191 million at the end of March.
Seplat shares were trading flat on Tuesday morning at 137.00 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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