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I lack good intel on this currently so I'm estimating a minimum of $50m EBITDA to Seplat, which is around $15/boe (on 10,000 boe/d), and I assume this is at a low oil price, circa $55. I don't know how it will be treated tax or royalty wise, undoubtedly got tax breaks. At $80 oil, I guess EBITDA to Seplat will be double this. Either way it will fund at least another 10c of dividend. Key thing for me is to have it operational, then the dividend will come as it has been management's intention for a long while.

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Depleted the sellers at last have we?

If anyone is interested in an offline information exchange, join a short term group I'll set up on Twitter - send me your @.... name and I'll add you

Does anyone know much about the quality or potential weaknesses of JSE's reservoirs? I'm interested to know more.

I understood it as meaning the special of 5c on top of 10c core is sustainable, subject to nothing left field, so 15c annually, with prospect for progression in time, albeit further out.

My view is 15c divi is a meaningful improvement on 10c and justifies a higher trading range now.

Think about it this way, why would the company bid for and win such a lot of new business that they can't make a proper margin on, especially post profit warnings and covenant breach? They wouldn't would they.

Also heard current dividend is sustainable and a new normal. All very satisfying.

I hear that the company is relaxed about the court fiasco, that none of it has legal basis, and Roger will be back soon. Also that the deal remains very much on the table, that Orjiako is creating a lot of noise but is going nowhere with this.
I'm pleased to have heard this. The fundamentals remain in place from my perspective; can sleep at night.

Further to the announcement made on 31 January 2023, the Group reports that it has been granted a waiver from the requirement to test each of the financial covenants applicable to its £30m revolving credit facility as of 31 March 2023. TPXimpact's lender is currently undertaking a review of the Group's short and medium term cash flow forecasts, the outcome of which will determine the nature and extent of future waivers. A further update will be provided when this review is concluded.

Current trading performance

The Board confirms trading in January and February 2023 was in line with management expectations. In addition, the momentum in new orders has continued in Q4 FY23, with new business wins of over £30m in the quarter.

You misread me. Yes the bank engagement started months ago, but waiver won't be given until the the budgeting and business plan for this coming year is agreed with them. The trading update this or next week requires the new budget too. So the bank waiver or other action will be agreed any time now or already has been, followed by the trading update. My point is, this all takes time and takes us to where we are today.

Hi Dartron, the budgeting exercise and updated business plan for the year to end March 2024 began in February and will have completed very recently with the intention to 1. provide a trading update and outlook statement to the market at year end 2023 (i.e. now) and 2. present their case regarding waiver of their banking covenants to HSBC, which are only broken as at the end March 2023 as per the covenant terms. This is how I see it. It has been in their interest to take their time on this delicate work (i.e. right up to end March) to present the strongest case to HSBC and update the market with maximum visibility possible. That is why this has taken a long time. I don't believe there is any funny business. I expect the CEO and CFO will present a strong case to HSBC (around now) and receive a positive response. That's my analysis of the situation and hope regarding outcome. The waiver isn't the only outcome required; the business must show the market a plan for returning EBITDA margin back to >12%.

https://youtu.be/eC-p0o8VRH0

Great interview with MD of Seplat West

https://twitter.com/PauloMacro/status/1640386061753892864?s=20

this is pretty interesting re net long as % of open interest re oil

Trading update and waiver of covenant imminent, IMO

I don't know which stock exchange but the chap is British so presumably not just the local stock exchange.

It would also solve NNPC's problem of how to become a listed entity, as I know from a friend in corporate finance that they have been studying how to reform themselves sufficiently to list on the stock exchange for at least a couple of years. A take-out would solve both aspirations.

I am also starting to think a take out by NNPC is a possibility. It would solve the issue of competency by internalising competency. Would be a strange outcome nevertheless.

It is indeed a sorry situation, that Seplat has effectively broken ties and burned bridges with it's own two founding shareholders. Not a good outcome at the best of times but this is Nigeria where founding shareholders are big men with access to, and clout with, government officials, which matters. That said, Seplat has placed itself on a governance pedestal and set itself apart from all the corruption and cronyism around it, which will surely have it's benefits too, whether be bidding for assets divested by the majors, dealing with NNPC, or borrowing in the credit markets. The two founders still have very signifciant financial exposure to Seplat, and won't want to stymie the company - in that sense they remain aligned with Seplat. ANOH will be completed in the not too distant future because NNPC has hundreds of millions of dollars in investment and royalties staked on its delivery - it also represents Nigeria's transition to a gas-fuled future energy mix.

And perhaps I am naive to state it, but the MPNL deal is still to play for and hasn't been cancelled by any party. Not that Seplat needs it - it's a profitable and growing business paying circa 12% yield today without it.

Never a dull day with SEPL.

The silver lining is this: the board and executive team are striding every more forthright as a corporate governance icon in Nigeria and won't tolerate any governance nonsense whatsoever. The company has rightly turned on both of its founding shareholders for governance transgressions and is now an exemplar of good governance in Nigeria. In my view SEPL deserves to trade on a governance premium in Nigeria.