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Another catalyst is FTSE 250 entry - presumably not far off

Today, without Exxon assets:
Sustainable 7% dividend yield
$900m market cap
~$300m net debt
$400m EBITDA at $70 oil from diversified Nigerial oil & gas portfolio
3x EV/EBITDA multiple; going to 2x a year from now when FCF pays down remaining debt
Profitability catalysts in train: Amukpe-Escravos pipeline will increase achieved pricing circa 5%; AHOH additional EBITDA contribution from 2023/2024 (~$50m?)
In the meantime, oil prices are potentially >$100 in 2022, delivering additional $150m+ FCF/year, which alone would be an additional 15% FCF yield

Tomorrow, with Exxon assets?
Cost of $1.6bn after adjustments could be closer to $1.0bn given FCF generation since effective close 1 Jan 2021
Combined EBITDA at $70 oil ~ $1.2bn
Combined EV/EBITDA ~$2.0bn to $2.3bn

But things become really interesting a year down the line as FCF eats away at net debt, possibly down to <$500m, resulting in EV/EBITDA multiple of circa 1x at $70 oil.

At $100 oil, the company's FCF yield could be 100% 12 months from now

Isn't there suppose to be a resource update very soon, and more concrete plans for developing Teren Sai?

Yes damofarl, concur with your observations, there are likely to be several other avenues for value creation here, beyond the headline production and reserve base, for a domestic champion such as Seplat - let's hope no hidden liabilities too.

Has anyone done any estimates of the profitability of these Exxon assets Seplat is acquiring? I'd be interested to hear views. I had a quick look and the numbers look really interesting. Assuming working interest of 90k boed, that equates to $2.3bn of revenues at $70 oil, which assuming an EBITDA margin of $30/boe is almost $1bn of EBITDA. That places the acquisition on an EV/EBITDA multiple of 1.6x, which by no coincidence is the multiple that Seplat was on just prior to the acquisition. These figures suggest a free cash flow yield of 30% to 50% with oil prices at $70 to $100. This sort of cash flow yield is staggering. If oil prices remain above say $80, Seplat will likely pay down the debt taken on the acquisition in <3 years, after which it will be churning out free cash (>$700m?). This is a $900m market cap company with future free cash flow of almost its market cap in about three years time, assuming the Exxon deal completes and assuming oil stays at circa $80 level. The market is clearly either extraordinarily inefficient and mispricing the stock today massively, or very strongly expects the acquisition to be derailed. If this acquisition completes, however, what is the stock worth, conservatively? 30% free cash flow looking out three years? That would be maybe 300p. Anyway, I'm interested in anyone's forecasts here.

Here you go...
Shell Nigeria Oil Field Sale Draws Bids From Four Local Firms https://www.bloomberg.com/news/articles/2022-02-03/shell-nigeria-oil-field-sale-draws-bids-from-four-local-firms

Oh no! It's one of Orjiako's companies. He is already in trouble, this will might tip it into bankruptcy. Potential overhang if he must sell his shares in Seplat, but anyway I'm not selling this at such low valuations with the oil price outlook looking so supportive. I'd like to see more free float anyhow.

The local share price is stable today but volume has risen substantially, to around $1m traded today, based on
the current black market rate of N775 per dollar....a good sign

https://ngxgroup.com/exchange/data/company-profile/?symbol=SEPLAT&directory=companydirectory&tdate=2022-02-02T00:00:00

I dont know anything, it's just quite likely with the locals sending the stock up, although volumes weren't that notable. Perhaps the currency is dropping again. Anyway one piece of news coming soon is confirmation that the Amukpe Escravos Pipeline is fully operational - it should be a noteworthy catalyst for Seplat.

Seplat's Nigeria line limit up +10% today. Notoriously leaky local market - potentially positive news about to hit the wires...

Great to see Seplat moving upwards at last. This stock is dirt cheap for a genuine ESG play on oil & gas in emerging markets with an exciting growth profile plus consolidation opportunities ahead. My price target remains 150p, around 5x EV/EBITDA at circa $60 oil price. A slow grind towards that I reckon.

In part that was me buying. Volumes are pathetic. The price level can't remain so low forever with oil rising like it has been. Q3 results around the corner - should underscore rising profitability and near term catalysts (hedges running off, the new underground pipeline, ANHO, renewable energy opportunities, M&A)

This will take-off shortly

No benefit from recently wild gas prices, as gas contracts are fixed or pegged locally, but when AHOL is up and running, export of gas condensates will be at international prices, I believe. The higher oil price will be helping things along for sure. I still suspect the selling pressure is coming from the NGN FX situation - irritating but transient.

No it's not HFT causing the issue, they prefer liquid instruments. It's because the Naira has taken another plunge over the last few weeks on the grey or unofficial market. When there's pressure on the unofficial rate portfolio investors will get around exchange controls to exit Naira by purchasing Seplat local stock in Naira and then switching it to the London line through their custodian (i.e. no FX transaction), then selling the London line to redeem into GBP. I've mentioned it before - Seplat is one of the few such channels available to use in this way. It's being piggybacked as a conduit for money wanting to escape the country. It's annoying and results in technical not fundamental selling pressure, but that's also why it's an opportunity for the long term investor. When such repatriation pressure disipates the stock bounces back. It's not fundamentals driven at all so you shouldn't worry about it - take the opportunity to stock up on a solid 8% dividend stock in my view. If you're wondering how Seplat can pay dividends to offshore investors with exchange controls, it is because their oil business is ringfenced from capital controls. Conversely, that is a challenge for Savannah Energy in my view, as they are mostly a gas business, which is not ringfenced from capital controls, as far as I understand. It's an important nuance to take into account. Anyway, it's all good, Seplat is doing great at $70 oil and kicking off plenty of cash, which will shine through even more as the hedges roll off into the end of the year.

Sorry what's HFT?

I stand by this - yet oil's now at $70+

Hedges expiring and now throwing off cash.

BARGAIN.

Looks like I called it! My 5 year price target is >800p. I think it's quite easily achievable, based on 25% annual revenue growth including inorganic and re-rating to 5x revenues. That is a 200% return over five years.

Surprised how little interest there is in Panoply on the share discussion boards. Dowgate Capital has conservative forecasts for the year end March 2022, of £72 in revenue and £11.5m in EBITDA, which excludes any inorganic growth between now and then. Similar businesses at a similar stage of growth in the US trade around 5-6x revenues and 25-27x EBITDA, which would suggest a fair EV of £290-360m, against its current £200m, or upside of 50% plus. That said, once acquisitions are taken into account (£100m of revenues forecast over the next 4 years, £50m over the next two years), at multiples of half that level, one could assume at least another £100m of value creation in the next two years, which suggests 100% upside in the next 24 months. For a business in a secular growth industry (few cyclical risks) and technology orientated, 100%+ upside potential is mighty attractive. While the share is volatile due to low liquidity, I just don't see the stock trading lower than where it currently is, almost in any scenario. What a stonking opportunity IMHO.

Yes well spotted, the 25% discount of the London line primarily represents the implied free market NGN to GBP rate (versus the fixed FX rate), but also liquidity compression of the LSE line as Seplat is one of the very few Lagos listed securities that is fully fungible with its foreign line - I.e. it is one of the few legal routes to circumnavigate Nigeria's foreign currency controls: buy Seplat locals with Naira, switch via the custodian to the LSE security, sell the LSE security to settle in GBP. This is one reason for the depressed Seplat LN share price, as there are sellers who only invested to get their cash offshore. But I would point out two things, firstly this has been a reality for ages (years), so nothing new and not a reason not to buy the stock, secondly the share is rising anyway, which is a good sign of building momentum, thirdly, when Nigeria eventually floats its exchange rate, the lid will be removed and the stock should gap up. This is a deep value quality equity story paying a fat dividend - it's basically easy money and anyone looking for income+growth should take a look.