Earnings Release • Jul 25, 2014
Earnings Release
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SEPLAT Petroleum Development Co PLC
25 July 2014
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC ANNOUNCES CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2014 AND UPDATES OPERATIONS
25 July 2014 - Seplat Petroleum Development Company Plc ("Seplat" or the "Company"), a leading Nigerian indigenous oil and gas company listed on both the Nigerian Stock Exchange and London Stock Exchange, today announces its interim financial results for the half year ended 30 June 2014 and provides an update on its operations.
Results summary
· Successful IPO on Nigerian Stock Exchange and main market of the London Stock Exchange on 14 April raising gross proceeds of US$535 million (NGN 88 billion) at NGN 576 per share (£2.10)
· First half average working interest production(1) 27,375 boepd (compared to 27,183 boepd in the first half of 2013)
o Excluding unplanned downtime in the period of 28 days (out of 45 days in total) average working interest production was 32,388 boepd
o Alternative oil evacuation route via the Warri refinery completed and tested, with first deliveries made in March; this should reduce the impact of future third party infrastructure downtime
· Full year average working interest production expected to be 23,000 - 25,000 bopd and 38 - 45 mmscfd; (29,000 - 33,000 boepd); on target to achieve OMLs 4, 38, 41 liquids exit rate of 72,500 bopd gross
· 15-year gas sales agreement concluded with Azura Edo IPP, to supply 116 mmscfd gross at US$3/mscf commencing in 2017
· First half profit before tax of US$156 million on revenues of US$388 million (normalised profit before tax adjusting for one off G&A costs was US$200 million vs. $210 million in first half of 2013)
· Capital investments of US$116 million in the first half funded by net operating cash flow before working capital of US$180 million; capex in the full year expected to be around $250 million
· Strong financial position - cash at bank US$580 million, net debt US$48 million
· Active new ventures pipeline - material opportunities currently being pursued
Financial Highlights
| June 2014 US$ million |
June 2013 US$ million |
June 2014 N billion |
June 2013 N billion |
Y-o-Y change | |
| Revenue | 388 | 419 | 60 | 65 | -7% |
| Gross profit | 247 | 250 | 38 | 39 | -1% |
| Operating profit | 173 | 220 | 27 | 34 | -22% |
| Profit before tax | 156 | 210 | 24 | 33 | -26% |
| Operating cash flow | 265 | 11 | 41 | 2 | nm |
| WI production (boepd)(1) | 27,375 | 27,183 | - | - | +1% |
| Realised oil price (US$/N per bbl) | 110 | 109 | 17,085 | 16,931 | - |
| Realised gas price (US$/N per mcf) | 1.60 | 1.43 | 248 | 222 | +12% |
(1)Liquid production volumes as measured at the LACT unit for OMLs 4, 38 and 41 and OPL 283 flow station. Volumes stated are subject to reconciliation and will differ from sales volumes within the period.
"Seplat performed well during the first half of 2014. Although production in the period was impacted by the shutdown of third party infrastructure, we continue to drive growth - excluding the shut-in days, our gross daily average production from OMLs 4, 38 and 41 was over 60,000 barrels. We plan to have up to seven drilling rigs actively engaged, and are progressing plans at a fast pace to develop our oil and gas reserves and increase production, aiming to build momentum through the second half and into 2015.
The completion of our new pipeline to the Warri refinery provides us with an alternative export option and reduces our exposure to any future downtime of the Trans Forcados system, as well as the reconciliation losses imposed on producers using that system.
In our gas business, the signing of a 15 year gas supply agreement to supply the Azura-Edo IPP is further evidence of our commitment to remain at the forefront of assisting Nigeria to realise its vast natural gas potential.
Seplat is in a strong financial position. Our profitable production base and conservative capital structure give us the necessary financial resources and flexibility to actively pursue a range of attractive, material new business opportunities."
Webcast and conference call:
At 09:00 am (Lagos and UK time) on 25 July, Austin Avuru, CEO, and Roger Brown, CFO, will host a webcast to present the Company's results. The webcast can be accessed by using the following link:
https://webconnect.webex.com/webconnect/onstage/g.php?t=a&d=668671884
To listen to the audio commentary only, participants can use the following telephone number:
Conference call: + 44 (0) 207 192 8000
Conference ID (to be quoted): SEPLAT CONFERENCE CALL
The presentation slides will also be available on the Company's website www.seplatpetroleum.com
| # Enquiries: Seplat Petroleum Development Company plc Roger Brown, CFO Andrew Dymond / David Boyd, Investor Relations Chioma Nwachuku, GM - Corporate Affairs & Business Development |
+44 203 725 6500 +234 12 770 400 |
| FTI Consulting Ben Brewerton / Sara Powell / George Parker [email protected] |
+44 203 727 1000 |
| Citigroup Global Markets Limited Tom Reid |
+44 207 986 4000 |
| RBC Europe Limited Stephen Foss / Matthew Coakes |
+44 207 653 4000 |
Seplat Petroleum Development Company Plc is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, listed on the Main Market of the London Stock Exchange ("LSE") (LSE:SEPL) and Nigerian Stock Exchange ("NSE") (NSE:SEPLAT).
In July 2010, SEPLAT acquired a 45 per cent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil and gas leases in the Niger Delta (OMLs 4, 38 and 41), which includes the producing Oben, Ovhor, Sapele, Okporhuru, Amukpe and Orogho fields. Since acquisition, Seplat has more than tripled production from these OMLs. In June 2013, Newton Energy Limited, a wholly-owned subsidiary of the Company, entered into an agreement with Pillar Oil Limited to acquire a 40 per cent participating interest in the Umuseti/Igbuku marginal field area within OPL 283. Seplat is pursuing a Nigeria focused growth strategy and is well-positioned to participate in future divestment programmes by the international oil companies, farm-in opportunities and future licensing rounds.
For further information please refer to the company website, http://seplatpetroleum.com/
| Gross | Working interest | ||||||
| Liquids | Gas | Liquids | Gas | Oil equivalent | |||
| Seplat % | bopd | mmcfd | bopd | mmcfd | boepd | ||
| OMLs 4, 38, 41 | 45% | 46,579 | 78.4 | 20,961 | 35.3 | 26,842 | |
| OPL 283 | 40% | 1,333 | - | 533 | - | 533 | |
| Total | 47,912 | 78.4 | 21,494 | 35.3 | 27,375 | ||
Note: Liquid production volumes as measured at the LACT unit for OMLs 4, 38 and 41 and OPL 283 flow station. Volumes stated are subject to reconciliation and will differ from sales volumes within the period.
During the first half 98.7% of OML 4, 38, 41 production was transported through the Trans Forcados system. This volume was subject to 10.8% reconciliation losses.
During the first half three heavy land rigs, one light rig and one swamp rig were in continuous operation, completing eight new wells. All of these rigs are intended to remain fully active through the second half of 2014.
The opportunity arose to contract a second swamp rig for a six-month period from April, and this completed a ninth new well in the first half and will drill a further well in the second half of the year.
To deliver its full year production target the Company is in the process of acquiring an additional rig which is planned to commence operations this year. Eleven new wells in total are planned to be completed by the year-end, taking the total of completed new wells in the year to 20.
Following completion of these new wells, which are mainly oil producers, the focus of the drilling campaign at the end of the second half will switch to gas production, with three new gas wells planned to be spudded in the fourth quarter and completed in 2015.
An exploration well was drilled on the Ogegere prospect in OML 38 and oil bearing sands were encountered. The well was suspended for further evaluation, including assessment of a potential new play at depths greater than the original target. Due to the emphasis on recovery of deferred production and acceleration of gas development in the second half, the Company plans to spud its next exploration well in the first half of 2015.
A key strategic focus of the Company is to increase gas production to meet the growing domestic demand, in particular for use in gas-to-power projects. Seplat is currently investing to increase gas processing capacity by 150 mmscfd, to 300 mmscfd in 2015. This represents the first phase of a programme to expand gas processing to at least 450 mmscfd by 2017. A new unit, with a capacity to process 150 mmscfd, is currently being shipped to the Company's Oben facility, where civil works are at an advanced stage. Installation of the new plant remains on target for completion by the end of this year.
Seplat's new 12" x 7 km pipeline to the Warri refinery was completed and tested in March. The pipeline has a capacity of 100,000 bopd and Seplat also has access to storage capacity at the refinery. The Company now plans to install a LACT unit on this pipeline, for which land has been acquired and civil works are well advanced.
The new facility has been commissioned and a quantity of dry crude was delivered to the Warri refinery in March. Further process modification work is continuing, to address issues around the composition of the separated water, and enable full continuous re-injection to commence in the second half of the year.
Work is well advanced on construction of two 50,000 bbl storage tanks at Amukpe, and these are expected to be completed early in 2015.
The project will provide artificial lift in the Ovhor field for improved oil recovery, by re-injecting associated gas produced at Amukpe. The project is well advanced, with pipeline installation near completion and processing and compression equipment delivered to site. Completion and commissioning is scheduled by the end of the year.
In May the Company announced that its bid for OMLs 29 and 24 was not the highest price offer, and therefore did not lead to the selection of Seplat as preferred bidder. In line with its strategy, which is to maintain price discipline and prioritise opportunities in the onshore and shallow waters offshore Nigeria that offer near-term production, cash-flow and reserve replacement potential, the Company is actively pursuing a number of other acquisition and farm-in opportunities. These include one such opportunity that may become available for which the Company has placed $453 million as a refundable deposit against the potential investment. There is no commitment on Seplat to proceed and no certainty that an investment will be made until all definitive agreements have been concluded and conditions required by Seplat have been satisfied fully.
The Company's extensive HSSE campaigns have proved effective with a reduction in work place incidents compared to the same period in 2013. No oil spills were recorded and almost two million man-hours were worked without a recorded LTI.
The Company continued to implement sustainable development programs in the host and impact communities, focusing on skills acquisition, capacity building, health care delivery and community infrastructure. Notable projects include the "Eye Can See" health care programme in March, which impacted over 7,000 people, and the first phase of the third annual ''Seplat Pearls Quiz'' for students in Delta and Edo states. In addition, a scholarship programme was launched nationwide in June. In terms of infrastructural development, twelve community projects were completed, including water scheme, housing, and town hall projects.
Gross revenue for H1 2014 is $388.2million (N60.3 billion) (H1 2013, $419.4million - N65.1 billion) which is 7% lower than the comparative period in prior year. Crude revenue (after adjusting for changes in lifting) were US$ 378.6 million (N58.8 billion) for the H1 2014, an 8% decrease from the H1 2013 US$ 413.1 million (N64.2 billion) mainly due to 45 days downtime in H1 2014. Gas revenue for the period was US$9.6 million (N1.5 billion), a 54% increase from the equivalent period in 2013 mainly due to increased production from work-over wells and finalisation of the upgrade works on the Oben gas plant and higher offtake from the Sapele gas plant.
Working interest sales volume for the period increased to 4.7 mmboepd from 3.9 mmboepd in H1 2013, mainly due to the shut in of production as a result of the shutdown of the TFP for repairs for 45 days in 2014.
As at the end of H1 2014, the Group realised an average oil price of US$110/bbl (H1 2013: US$109/bbl.), and an average gas price of US$1.6/mscf (H1 2013: US$1.4/mscf), against an average price for Brent in the period of US$110.3/bbl (H1 2013: US$113.86/bbl). Total gas volume sold was 6,144,750 scf (H1 2013: 5,307,810 scf), while total volume of crude lifted as at H1 2014 was 3.6 mmbbls (H1 2013: 3.0 mmbbls).
Gross profit for the H1 2014 was US$247.2 million (N38.4 billion), which represents a 1% decrease over H1 2013 US$250.3 million (N38.9 billion). Variance is mainly driven by lower revenue in H1 2014 due to lifting adjustments over working interest of 302 mbbls. This was partly offset by lower costs of sales as a result of the reduction in crude handling fees by 25% and royalties by 19%. The work-over costs on the existing wells as at H1 2014 were US$12.7 million (N2.0 billion), this represents a decrease of 56% compared to H1 2013. This decrease was due to a switch from work-overs to development drilling program.
Profit after tax for the H1 2014 was US$156.0 million (N24.3 billion) (H1 2013: US$303.3 million, N47.1 billion), a 94% decrease over the comparative period in 2013, mainly attributed to deferred tax liabilities of US$92.7m (N14.4billion) released in H1 2013 as a result of pioneer status granted to the group, and lower revenue due to downtime on the TFP for 45 days. This was partly offset by a reduction in work-overs (US$16.4 million, N2.5 billion) and DDA costs (US$2.8 million, N435 million), royalties (US$18.3 million, N2.8 billion) and Crude handling (US$4.5 million, N699.0 million).
General and administration expenses increased by US$54.6 million (N8.5 billion) as at the end of H1 2014 compared to H1 2013, this is mainly due to commitment and arrangement fees paid to banks for the new loan facility - US$12 million (N1.8 billion), higher staff costs due to increase in head count (included in this amount is a onetime payment of IPO bonus to staff, in line with the Prospectus of US$5.0 million), US$12 million, regulatory payment of US$14 million (N2.5 billion), which is also a onetime cost that will not re-occur in future periods, costs for the accounting and procurement system change US$7 million (N1.0 billion) and new business development costs for evaluation of prospect for new ventures.
Profit for the period
Finance costs as at end of H1 2014 were US$21.6 million, (N3.4 billion) (H1 2013: $10.7 million, N1.7 billion). The increase in finance costs in H1 2014 is due to higher outstanding debts due to draw down of the balance of US$215 million (N33.4 billion) on the US$550 million (N85.4 billion) loan and additional new loan of US$200 million (N31.0 billion) compared to the same period in 2013.
There is no income tax expense in the H1 2014 as well as H1 2013 as a result of the pioneer status granted to the Group in 2013.
Financing the Company's activities
Cash generated from operating activities after movements in working capital as at end of H1 2014 was US$265.1 million, N41.1 billion (H1 2013: US$10.9 million, N1.7 billion), after providing cash of US$12.7 million (N1.9 billion) to fund the Group's investments in work-overs and US$116.4 million (N18.0 billion) for other CAPEX cost.
Loan repayments as at the end of H1 2014 were US$79.4 million, (N12.3 billion) (H1 2013: US$13.6 million, N2.1billion).
Cash in bank and hand as at 30 June 2014 was US$580.9 million (N90.1 billion). The movement up until 30 June 2014 reflects net revenue received IPO proceeds; draw down of both existing and new loans. This is partially offset by movements on the Group's loan facilities, payments for capital expenditure and operating expenses. In line with what was contained in our Prospectus relating the use of the IPO proceeds, the Group has paid the shareholders loan of $48 million (N 7.5 billion) and will use the balance for new ventures, including $453 million set aside as a refundable cash deposit in relation to an opportunity that may potentially become available.
The outstanding NPDC receivable was $292 million (N 45.5 billion). This is mainly outstanding payments brought forward from prior period performances. A total of $148.0million (N 23.0billion) from the total outstanding have been approved as cash calls for 2014 and actual payment is currently awaited while a total of $144million (N22.5billion) is still undergoing various approval levels within NPDC. Plans are already under way to recover these costs. A total of $220 million (N 33.9 billion) was collected as cash call from NPDC during the period while $229 million (N 35.5 billion) was added to performance.
Related party transactions
Related party transactions are described in Note 8 of the condensed financial statement. There have been no material changes in these relationships in the six month period to 30 June 2014.
Principal risks and uncertainties to 2014 performance
The Directors do not consider that the principal risks and uncertainties of the Group have changed since the recently presented consolidated financial statements for the year ended 31 December 2013. The principal risks faced by SEPLAT relate to: operational risks involving field delivery risks, exploration failure, environmental and safety incidents, unfulfilled work and / or JV obligations and detrimental changes to the conditions of our licences; external risks including geo-political risks, security incidents, host community action and oil price volatility; and financial risk including changes to tax regimes and other legislation, and treasury management.
The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, being a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the consolidated financial statements.
Our financial strategy continues to be to maintain the flexibility required to support the significant appraisal and development activities in Nigeria. In addition to the significantly cash generative nature of our growing production base, we have maintained our relationships with the lending banks.
The interests of the Directors (and of persons connected with them) in the share capital of the Company (all of which are beneficial unless otherwise stated) as at 30 June 2014, are as follows:
| Name | No.of Ordinary Shares |
As a percentage of total Ordinary Shares in issue |
| A.B.C. Orjiako(1) | 84,736,913 | 15.31 |
| Ojunekwu Augustine Avuru(2) | 73,297,011 | 13.25 |
| William Stuart Connal(4) | 1 | - |
| Roger Thompson Brown(4) | 1 | - |
| Michel Hochard | - | - |
| Macaulay Agbada Ofurhie(3) | 4,806,373 | 0.87 |
| Michael Richard Alexander | - | - |
| Charles Okeahalam(4) | 400,000 | - |
| Basil Omiyi(4) | 400,000 | - |
| Lord Mark Malloch‑Brown | - | - |
| Ifueko Omoigui‑Okauru | - | - |
| Damien Dodo | - | - |
Notes:
1. 72,036,912 Ordinary Shares are held by Shebah Petroleum Development Company Limited, which is an entity controlled by A.B.C. Orjiako and members of his family, and 12,700,001 Ordinary Shares are held directly by Mr. Orjiako's siblings. In addition, 13,506,800 Ordinary Shares, representing approximately 3.38 per cent. of the Ordinary Shares (as at the Latest Practicable Date), are held by Vazon Investments Limited (7,366,800 Ordinary Shares) and Hautguard Limited (6,140,000 Ordinary Shares). Both Vazon Investments Limited and Hautguard Limited are controlled by individuals who are also shareholders in Shebah Exploration and Production Company Limited, an entity controlled by A.B.C. Orjiako.
2. 19,200,000 Ordinary Shares are held by Professional Support Limited and 1,920,000 Ordinary Shares are held by Abtrust Integrated Services Limited, each of which is an entity controlled by Austin Avuru. 44,160,000 Ordinary Shares are held by Platform Petroleum Limited, an entity in which Austin Avuru holds 23.28 per cent. of the issued share capital.
3. Macaulay Agbada Ofurhie also owns 7.28 per cent. of Platform Petroleum Limited, an entity which holds 44,160,000 Ordinary Shares (approximately 11.04 per cent.).
4. Denotes a shareholding of less than 0.10 per cent.
SUBSTANTIAL INTEREST IN SHARES
The issued and fully paid share capital of the Company as at 30 June 2014 is beneficially owned as follows:
| Name | No. of Ordinary Shares |
As a percentage of total Ordinary Shares in issue |
| A.B.C. Orjiako(1) | 84,736,913 | 15.31 |
| Austin Avuru and Platform Petroleum Limited(2) | 73,297,011 | 13.25 |
| MPI S.A. | 120,400,000 | 21.76 |
| Citibank Custodian | 68,907,884 | 12.45 |
| Mercuria Capital Partners Limited | 24,000,000 | 4.34 |
| Quantum Power International Holdings Limited | 19,600,000 | 3.54 |
| Quantum Capital Partners Fund I LP | 19,996,000 | 3.61 |
| The Blakeney Group | 16,000,000 | 2.89 |
| Others | 126,372,505 | 22.83 |
Notes:
(1) 72,036,912 Ordinary Shares are held by Shebah Petroleum Development Company Limited, which is an entity controlled by A.B.C. Orjiako and members of his family, and 12,700,000 Ordinary Shares are held directly by Mr. Orjiako's siblings. In addition, 13,506,800 Ordinary Shares, representing approximately 3.38 per cent. of the Ordinary Shares (as at the Latest Practicable Date), are held by Vazon Investments Limited (7,366,800 Ordinary Shares) and Hautguard Limited (6,140,000 Ordinary Shares). Both Vazon Investments Limited and Hautguard Limited are controlled by individuals who are also shareholders in Shebah Exploration and Production Company Limited, an entity controlled by A.B.C. Orjiako.
(2) 19,200,000 Ordinary Shares are held by Professional Support Limited and 1,920,000 Ordinary Shares are held by Abtrust Integrated Services Limited, each of which is an entity controlled by Austin Avuru. 44,160,000 Ordinary Shares, are held by Platform Petroleum Limited, which is an entity in which Austin Avuru holds 23.28 per cent. of the issued share capital.
DIRECTORS' RESPONSIBILITY STATEMENT
The directors confirm that to the best of their knowledge:
a) The condensed set of financial statements have been prepared in accordance with lAS 34 'Interim Financial reporting';
b) the interim management report includes a fair review of the information required by UK DTR 4.2.7R indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year and
c) The interim management report includes a fair review of the information required by UK DTR 4.2.8Rdisclosure of related parties' transactions and changes therein.
By order of the Board,
| A.B.C Orjiako | A.O. Avuru | R.T. Brown |
| FRC/2013/IODN/00000003161 | FRC/2013/IODN/00000003100 | FRC/2014/IODN/00000007983 |
| Chairman | Group Managing Director/ Chief Executive Officer | Group Chief Financial Controller |
| 25 July 2014 | 25 July 2014 | 25 July 2014 |
Certain statements included in these results contain forward-looking information concerning Seplat's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which Seplat operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within Seplat's control or can be predicted by Seplat. Although Seplat believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. Actual results and market conditions could differ materially from those set out in the forward-looking statements. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Seplat or any other entity, and must not be relied upon in any way in connection with any investment decision. Seplat undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
| Ernst & Young 10th Floor, UBA House 57, Marina Lagos, Nigeria |
Tel: +234 (01) 844 996 2/3 Fax: +234 (01) 463 0481 Email: [email protected] www.ey.com |
INDEPENDENT AUDITOR'S REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION TO THE MEMBERS OF SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC
We have reviewed the accompanying consolidated interim financial statements of Seplat Petroleum Development Company Plc and its subsidiaries (the Group), which comprise the consolidated statements of financial position as at 30 June 2014 and profit or loss and other comprehensive income, changes in equity and cash flows for the half year then ended, and notes to the consolidated interim financial statements as set out on pages 14 to 26. The company's directors are responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with IAS 34, "Interim Financial Reporting" and in the manner required by the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 and the Financial Reporting Council (FRC) Act of Nigeria. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements do not present fairly, in all material respects, the financial position of the Group as at 30 June 2014, and of the financial performance and its cash flows for the half year then ended in accordance with IAS 34, "Interim Financial Reporting" and in the manner required by the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria and the Financial Reporting Council (FRC) Act of Nigeria.
Yemi Odutola, FCA
FRC/2012/ICAN/00000000141
For: Ernst & Young
Lagos, Nigeria
25 July 2014
A member firm of Ernst & Young Global Limited.
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR HALF YEAR ENDED 30 JUNE 2014
| Note | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 12 months ended 31 Dec 2013 | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 12 months ended 31 December 2013 | ||
| $000 | $000 | $000 | Nmillion | Nmillion | Nmillion | |||
| Revenue | 3 | 388,185 | 419,363 | 880,227 | 60,294 | 65,142 | 137,060 | |
| Cost of sales | 4 | (141,019) | (169,067) | (330,943) | (21,904) | (26,262) | (51,531) | |
| ----------- | ---------- | ----------- | ---------- | --------- | ----------- | |||
| Gross profit | 247,166 | 250,296 | 549,284 | 38,390 | 38,880 | 85,529 | ||
| General and administrative expenses | 5 | (83,426) | (28,872) | (71,977) | (12,958) | (4,485) | (11,208) | |
| Other operating income | - | - | 404 | - | - | 63 | ||
| (Loss)/gain on foreign exchange | 9,706 | (1,246) | 1,473 | 1,508 | (194) | 229 | ||
| Fair value movement in contingent consideration | - | - | (514) | - | - | (80) | ||
| Operating profit | 173,446 | 220,178 | 478,670 | 26,940 | 34,201 | 74,533 | ||
| Finance income | 4,165 | 1,071 | 658 | 647 | 166 | 102 | ||
| Finance charges | 6 | (21,643) | (10,715) | (21,805) | (3,362) | (1,664) | (3,395) | |
| Profit before taxation | 155,968 | 210,534 | 457,523 | 24,225 | 32,703 | 71,240 | ||
| Taxation | 11 | - | 92,737 | 92,745 | - | 14,397 | 14,441 | |
| ----------- | ----------- | ---------- | ----------- | ---------- | --------- | |||
| Profit after taxation | 155,968 | 303,271 | 550,268 | 24,225 | 47,100 | 85,681 | ||
| Other comprehensive income Foreign translation reserve |
- | - | 58 | (2,061) | (2,032) | (1,955) | ||
| Total comprehensive income for the period / year | 155,968 | 303,271 | 550,326 | 22,164 | 45,068 | 83,726 | ||
| \===== | \===== | \====== | \====== | \====== | \===== | |||
| Earnings per share | 7 | 0.33 | 0.65 | 1.38 | 0.05 | 0.10 | 0.21 | |
| \=== | \=== | \=== | \=== | \==== | \=== | |||
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
| Assets | Note | As at 30 June | As at 30 June | As at 31 December | As at 30 June | As at 30 June | As at 31 December |
| 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | ||
| $000 | $000 | $000 | Nmillion | Nmillion | Nmillion | ||
| Non-current assets | |||||||
| Oil and gas properties | 674,160 | 494,397 | 577,954 | 102,388 | 74,473 | 87,442 | |
| Other property, plant and equipment | 10,181 | 6,459 | 7,553 | 1,581 | 1,003 | 1,176 | |
| Intangible assets | 94 | 189 | 141 | 15 | 29 | 22 | |
| Deferred tax assets | 11 | - | - | - | - | - | - |
| Prepayments | 108,957 | 23,394 | 108,910 | 16,916 | 3,632 | 16,958 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total non-current assets | 793,392 | 524,439 | 694,558 | 120,900 | 79,137 | 105,598 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Current assets | |||||||
| Inventories | 64,439 | 24,106 | 43,112 | 10,004 | 3,742 | 6,713 | |
| Trade and other receivables | 386,208 | 527,385 | 410,430 | 59,959 | 81,877 | 63,908 | |
| Deposit for Investments | 453,190 | - | - | 70,358 | - | - | |
| Other Current financial assets | 12 | 379 | - | - | 59 | - | - |
| Cash and cash at banks | 580,496 | 29,274 | 169,461 | 90,122 | 4,545 | 26,387 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total current assets | 1,484,712 | 580,765 | 623,003 | 230,502 | 90,164 | 97,008 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total assets | 2,278,104 | 1,105,204 | 1,317,561 | 351,402 | 169,301 | 202,606 | |
| \======= | \====== | \======= | \====== | \===== | \====== | ||
| Equity and liabilities | |||||||
| Equity attributable to shareholders | |||||||
| Share capital | 13a | 1,798 | 690 | 1,334 | 277 | 105 | 205 |
| Capital contribution | 13b | 40,000 | 40,000 | 40,000 | 6,218 | 6,218 | 6,218 |
| Share premium | 13c | 497,456 | - | - | 77,267 | - | - |
| Retained earnings | 806,776 | 444,455 | 690,807 | 125,005 | 68,746 | 106,993 | |
| Foreign translation reserve | 58 | - | 58 | (2,061) | (2,032) | (1,955) | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total equity | 1,346,088 | 485,145 | 732,199 | 206,706 | 73,037 | 111,461 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Non-current liabilities | |||||||
| Interest bearing loans & borrowings | 348,517 | 178,923 | 120,850 | 54,107 | 27,778 | 18,818 | |
| Deferred tax liabilities | 11 | - | - | - | - | - | - |
| Contingent consideration | 8,793 | 7,731 | 8,245 | 1,365 | 1,200 | 1,284 | |
| Provision for decommissioning | 16,147 | 14,204 | 15,176 | 2,507 | 2,205 | 2,363 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total non-current liabilities | 373,457 | 200,858 | 144,271 | 57,979 | 31,183 | 22,465 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Current liabilities | |||||||
| Trade and other payables | 275,823 | 231,964 | 251,338 | 42,822 | 36,012 | 39,135 | |
| Short term borrowings | 279,934 | 120,715 | 189,753 | 43,460 | 18,741 | 29,546 | |
| Other Current financial liabilities | 12 | 2,802 | - | - | 435 | - | - |
| Current taxation | - | 66,522 | - | - | 10,328 | - | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total current liabilities | 558,559 | 419,201 | 441,091 | 86,717 | 65,081 | 68,681 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total liabilities | 932,016 | 620,059 | 585,362 | 144,696 | 96,264 | 91,146 | |
| ------------ | --------- | --------- | -------- | -------- | ----------- | ||
| Total equity and liabilities | 2,278,104 | 1,105,204 | 1,317,561 | 351,402 | 169,301 | 202,606 | |
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR HALF YEAR ENDED 30 JUNE 2014
| Share | Share | Capital | Foreign Translation | Retained | Total | |
| Capital | Premium | Contribution | Reserve | Earnings | Equity | |
| $000 | $000 | $000 | $000 | $000 | ||
| At 1 January 2013 | 690 | - | 40,000 | - | 141,183 | 181,873 |
| Bonus issues | 644 | (644) | - | |||
| Total comprehensive income for the year | - | - | 550,268 | 550,268 | ||
| Other comprehensive income | - | - | 58 | 58 | ||
| --------- | ---------- | ----------- | ------- | ----------- | ----------- | |
| At 31 December 2013 | 1,334 | - | 40,000 | 58 | 690,807 | 732,199 |
| \===== | \===== | \===== | \==== | \======= | \====== | |
| At 1 January 2014 | 1,334 | 40,000 | 58 | 690,807 | 732,199 | |
| Additional issued share (Note 12) | 464 | 497,456 | - | 497,920 | ||
| Dividend (Note 10) | (40,000) | (40,000) | ||||
| Total comprehensive income for the period | 155,968 | 155,968 | ||||
| ------------ | ------------ | ----------- | ------ | ------------ | -------------- | |
| At 30 June 2014 | 1,798 | 497,456 | 40,000 | 58 | 806,775 | 1,346,087 |
| \====== | \======= | \====== | \=== | \======= | \======== | |
| Nmillion | Nmillion | Nmillion | Nmillion | Nmillion | Nmillion | |
| At 1 January 2013 | 105 | - | 6,218 | 21,662 | 27,985 | |
| Bonus issues | 100 | (100) | - | |||
| Total comprehensive income for the year | - | - | 85, 431 | 85, 431 | ||
| Other comprehensive income | - | - | (1,955) | (1,955) | ||
| --------- | ---------- | ----------- | ------- | ----------- | ----------- | |
| At 31 December 2013 | 205 | - | 6,218 | (1,955) | 106,993 | 111,461 |
| \===== | \===== | \===== | \==== | \======= | \====== | |
| At 1 January 2014 | 205 | - | 6,218 | (1,955) | 106,993 | 111,461 |
| Additional issued share (Note 12) | 72 | 77,267 | - | - | 77,339 | |
| Dividend (Note 10) | - | - | (6,213) | (6,213) | ||
| Total comprehensive income for the period | - | - | 24,225 | 24,225 | ||
| Other comprehensive income | - | (106) | - | (106) | ||
| --------- | ---------- | ----------- | ------- | ----------- | ----------- | |
| At 30 June 2014 | 277 | 77,267 | 6,218 | (2,061) | 125,005 | 206,705 |
| \===== | \===== | \===== | \==== | \======= | \====== |
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC
CONSOLIDATED STATEMENT OF CASH FLOW
FOR HALF YEAR ENDED 30 JUNE 2014
| 6 Months to 30 June |
6 Months to 30 June |
12 months to December | 6 Months to 30 June |
6 Months to 30 June |
12 months to December | |
| 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | |
| $000 | $000 | $000 | Nmillion | Nmillion | Nmillion | |
| Cash Flows from Operations Activities | ||||||
| Cash generated from operations | 268,204 | 33,781 | 397,793 | 41,639 | 5,245 | 61,940 |
| Income taxes Paid | (3,153) | (22,813) | (106,584) | (490) | (3,542) | (16,596) |
| ----------- | --------- | ----------- | --------- | ---------- | ---------- | |
| Net cash flows from operating activities | 265,051 | 10,968 | 291,209 | 41,149 | 1,703 | 45,344 |
| ----------- | --------- | ----------- | --------- | ---------- | ---------- | |
| Cash Flow from Investing Activities | ||||||
| Investment in Oil and gas properties | (112,111) | (79,813) | (216,200) | (17,405) | (12,391) | (33,665) |
| Investment in other property, plant and equipment | (4,280) | (1,510) | (4,503) | (664) | (234) | (701) |
| Proceeds from sale of asset | - | - | 85 | - | - | 13 |
| Deposit for Investment | (453,190) | - | - | (70,358) | - | - |
| Interest received | 1,432 | 1,072 | 658 | 222 | 166 | 102 |
| ----------- | --------- | ----------- | --------- | ---------- | ---------- | |
| Net cash flows from investing activities | (568,149) | (80,251) | (219,960) | (88,205) | (12,459) | (34,251) |
| ----------- | --------- | ----------- | --------- | ---------- | ---------- | |
| Cash Flows from Financing Activities | ||||||
| Proceeds from issue of shares | 497,921 | - | - | 77,302 | - | - |
| Issue costs | (45,806) | - | - | (7,111) | - | - |
| Proceeds from bank financing | 446,000 | 60,000 | 129,000 | 69,242 | 9,315 | 20,087 |
| Repayments of shareholder financing | (48,000) | - | - | (7,452) | - | - |
| Repayments of bank financing | (79,356) | (13,563) | (68,096) | (12,320) | (2,106) | (10,603) |
| Dividends paid | (40,000) | - | - | (6,210) | - | - |
| Interest paid | (16,627) | (4,183) | (18,776) | (2,581) | (649) | (2,924) |
| ----------- | --------- | ----------- | --------- | ---------- | ---------- | |
| Net cash flows from financing activities | 714,133 | 42,254 | 42,128 | 110,870 | 6,560 | 6,560 |
| ----------- | --------- | ----------- | --------- | ---------- | ---------- | |
| Net increase/(decrease) in cash and cash equivalents | 411,035 | (27,029) | 113,377 | 63,813 | (4,196) | 17,654 |
| Cash and cash equivalents at beginning of period / year | 169,461 | 56,332 | 56,332 | 26,309 | 8,746 | 8,771 |
| Net foreign exchange difference | - | (29) | (248) | - | (5) | (39) |
| \====== | \===== | \===== | \===== | \===== | \==== | |
| Cash and cash equivalents at end of period / year | 580,496 | 29,274 | 169,461 | 90,122 | 4,545 | 26,387 |
| \====== | \===== | \===== | \===== | \===== | \==== |
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR HALF YEAR ENDED 30 JUNE 2014
1. CORPORATE STRUCTURE AND BUSINESS
Seplat Petroleum Development Company Plc ("the Company''), the parent of the group was incorporated on 17 June 2009 as a private limited liability company, under the Company and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004, and commenced operations on 1 August 2010. The Company was re-registered as a public limited company on 3rd October, 2013. The company successfully listed on both the London and Nigeria Stock Exchanges on 14 April 2014. The Company is principally engaged in oil and gas exploration and production.
GROUP STRUCTURE AND COMPOSITION
During 2013, the Company incorporated four new subsidiaries, Seplat Petroleum Development Company UK Limited, which was incorporated on 21 August 2013, Seplat East Onshore Limited, which was incorporated in 12 December 2013, Seplat East Swamp Company Limited, which was incorporated on 12 December 2013 and Seplat Gas Company Limited, which was incorporated on 12 December 2013, these entities are wholly owned subsidiaries of SEPLAT. On 1 June 2013, Newton Energy Limited a wholly owned subsidiary of SEPLAT, incorporated on 8th November, 2010 acquired from Pillar Oil Limited ("Pillar Oil") a 40% per cent participant interest in producing assets: the Umuseti and Igbuku marginal field area located in OPL 283. The total purchase price for these assets was $50 million paid at the completion of the acquisition in June 2013 and a contingent payment of $10 million payable upon reaching certain production milestones.
$57.7 million was allocated to the producing assets including $7.7 million as the fair value of the contingent consideration as calculated on acquisition date.
The Company together with its subsidiaries, Newton Energy Limited, Seplat Petroleum Development Company UK Limited, Seplat East Onshore Limited, Seplat East Swamp Company Limited and Seplat Gas Company Limited and are referred to as the Group.
Except for Newton Energy Limited and Seplat Petroleum Development Company UK Limited, the other three entities had not started operation as at 30 June 2014.
2. ACCOUNTING POLICIES
2.1 Basis of preparation
These consolidated financial statements for the period ended 30 June 2014 are prepared in accordance with the International Financial Reporting Standard ("IFRS").
The consolidated financial statements have been prepared on a historical cost basis, except for contingent consideration that has been measured at fair value. The accounting policies have not been included, but the accounting policies and methods of computation are consistent with the most recent set of audited financials presented for the year ended 31 December 2013.
The interim condensed financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the group's audited financial statements for the year ended 31 December 2013.
The consolidated financial statements are presented in US dollar ($) and Nigerian Naira (N) and all values are rounded to the nearest thousand ($000 and N million), except when otherwise indicated.
2.2 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June 2014.
These basis are the same adopted for the last audited financials statement as at 31 December 2013.
2.3. Functional and presentation currency
The US Dollar is the functional currency of the Group. Transactions denominated in currencies other than the US Dollar are deemed to be foreign currencies and recorded at the rates of exchange ruling at the dates of those transactions. The resulting exchange gains or losses are included as foreign translation losses/gains in the statement of profit or loss. The Group uses the direct method of consolidation and has elected to recycle the gain or loss that arises from this method.
For statutory reporting purposes, the Naira components of the interim financial statements are derived from the US dollar financial statements translation in which all monetary assets and liabilities are translated at the closing rate, share capital at historical rate while comprehensive income and fixed assets accounts are translated at the average rate for the period. The resulting exchange differences are recognised in other comprehensive income and included as a separate component of equity.
3. REVENUE
| 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | |
| $000 | $000 | Nmillion | Nmillion | |
| Crude oil sales as invoiced | 403,714 | 330,020 | 62,706 | 51,264 |
| Changes in lifting (in line with participating interests of both parties) | (25,081) | 83,127 | (3,896) | 12,913 |
| ----------- | ----------- | --------- | ---------- | |
| 378,633 | 413,147 | 58,810 | 64,177 | |
| Gas sales | 9,552 | 6,216 | 1,484 | 965 |
| ----------- | ----------- | --------- | ---------- | |
| Total revenue | 388,185 | 419,363 | 60,294 | 65,142 |
| \====== | \====== | \===== | \===== |
The sole off-taker for crude oil is Shell Western Supply and Trading Limited.
4. COST OF SALES
| 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | |
| $000 | $000 | Nmillion | Nmillion | |
| Crude handling fees | 9,131 | 12,201 | 1,418 | 1,895 |
| Royalties | 76,249 | 94,547 | 11,843 | 14,686 |
| Depletion, Depreciation and Amortisation | 15,905 | 13,097 | 2,470 | 2,034 |
| Niger Delta Development Commission | 4,644 | 4,717 | 721 | 733 |
| Other Rig related Expenses | 12,703 | 29,056 | 1,973 | 4,513 |
| Other Field Expenses | 22,387 | 15,449 | 3,479 | 2,401 |
| --------- | ----------- | ---------- | --------- | |
| 141,019 | 169,067 | 21,904 | 26,262 | |
| \===== | \====== | \===== | \====== |
5. GENERAL AND ADMINISTRATIVE EXPENSES
| 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | |
| $000 | $000 | Nmillion | Nmillion | |
| Depreciation, amortisation and impairment charges | 1,691 | 1,229 | 263 | 191 |
| Employee related cost | 9,813 | 6,327 | 1,524 | 983 |
| Professional & Consulting Fees | 39,975 | 12,776 | 6,209 | 1,985 |
| Directors Emoluments | 4,653 | 2,338 | 723 | 363 |
| Other General and Admin Expenses | 27,294 | 6,202 | 4,239 | 963 |
| --------- | ----------- | ---------- | --------- | |
| 83,426 | 28,872 | 12,958 | 4,485 | |
| \===== | \====== | \======= | \====== |
6 FINANCE CHARGES
| 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | |
| $000 | $000 | Nmillion | Nmillion | |
| Bank loan | 20,670 | 8,241 | 3,211 | 1,280 |
| Interest on shareholder loan | - | 1,695 | - | 263 |
| Unwinding of discount on provision for decommissioning | 973 | 779 | 151 | 121 |
| --------- | ----------- | ---------- | --------- | |
| 21,643 | 10,715 | 3, 362 | 1,664 | |
| \===== | \====== | \======= | \====== |
7. EARNINGS PER SHARE
Basic
Basic earnings per share is calculated on the Company's profit after taxation and on the basis of weighted average of issued and fully paid ordinary shares at the end of the year.
| 6 months ended 30 June 2014 | 6 months ended 30 June 2013 | 6 months ended 30 June 2014 | 6 months ended 30 June 2013 |
|
| $000 | $000 | Nmillion | Nmillion | |
| Profit for the year attributable to shareholders ($000) | 155,968 | 303,271 | 24,225 | 47,100 |
| ------------ | ----------- | ------------ | --------- | |
| Weighted average number of ordinary shares in issue (in 000) | 461,666 | 461,666 | 461,666 | 461,666 |
| ------------ | ----------- | -------------- | --------- | |
| $ | $ | N | N | |
| Basic earnings per share (in $) | 0.33 | 0.65 | 0.05 | 0.11 |
| Dividend per share (in $ and N) | 0.10 | - | 16 | - |
| Earnings ($000) | ||||
| Profit attributable to equity holders of the Group | 155,968 | 303,271 | 24,225 | 47,100 |
| \====== | \====== | \====== | \====== | |
| Profit used in determining diluted earnings per share | 155,968 | 303,271 | 24,225 | 45,069 |
| \====== | \====== | \====== | \====== |
There were no dilutive instruments for the period ended 30 June 2014.
8. RELATED PARTY TRANSACTIONS
The Group receives goods and services from companies that are controlled by close family members of the directors or are subsidiaries of the Company's shareholder. Details of related party transactions can be found below.
Transactions
The following transactions were carried out by related parties on behalf of Seplat:
i) Purchases of goods and services
| 6 months ended 30 June 2014 |
6 months ended 30 June 2013 |
6 months ended 30 June 2014 |
6 months ended 30 June 2013 |
||
| $000 | $000 | Nmillion | Nmillion | ||
| Shareholders | |||||
| MPI SA | 300 | 1,476 | 47 | 229 | |
| Shebah Petroleum Development Company Limited | 759 | 583 | 183 | 91 | |
| Platform Petroleum Limited | 145 | 567 | 23 | 88 | |
| --------- | --------- | --------- | --------- | ||
| 1,204 | 2,626 | 253 | 408 | ||
| \===== | \===== | \===== | \===== | ||
| Entities under common control | |||||
| Abbeycourt Trading Company Limited | 2,089 | 1,352 | 324 | 210 | |
| Abtrust Integrated Services | 50 | - | 8 | - | |
| Charismond Nigeria Limited | 155 | 143 | 24 | 22 | |
| Cardinal Drilling Services Limited | 20,227 | 16,569 | 3,140 | 2,572 | |
| Keco Nigeria Enterprises | 1,778 | 1,022 | 276 | 159 | |
| Ndosumili Ventures Limited | 1,071 | 1,168 | 166 | 181 | |
| Oriental Catering Services Limited | 332 | 296 | 52 | 46 | |
| ResourcePro Inter Solutions Limited | 710 | 431 | 110 | 67 | |
| Berwick Nigeria Limited | 988 | 148 | 153 | 23 | |
| Montego Upstream Services Limited | 8,811 | 3,513 | 1,368 | 545 | |
| Neimeth International Pharmaceutical Plc | 8 | - | 1 | - | |
| Nerine Support Services Limited | 14,079 | 9,152 | 2,186 | 1,421 | |
| Shebah Exploration and Production Company Limited | - | - | - | - | |
| Nabila Resources & Investment Ltd | 354 | 115 | 55 | 18 | |
| Helko Nigeria Limited | 828 | 101 | 129 | 16 | |
| --------- | --------- | --------- | --------- | ||
| 51,480 | 34,010 | 7,992 | 5,280 | ||
| \===== | \===== | \===== | \===== |
8. Related Party Transactions - Continued
| ii) Interest expense | |||||
| 6 months ended | 6 months ended | 6 months ended | 6 months ended | ||
| 30 June 2014 | 30 June 2013 | 30 June 2014 | 30 June 2013 | ||
| $000 | $000 | Nmillion | Nmillion | ||
| Shareholders | |||||
| MPI | - | 1,694 | - | 263 | |
| \===== | \===== | \===== | \===== | ||
Balances
The following balances were receivable from or payable to related parties as at 30 June 2014:
| (i) Prepayments / receivables | |||||
| 6 months ended | 6 months ended | 6 months ended | 6 months ended | ||
| 30 June 2014 | 30 June 2013 | 30 June 2014 | 30 June 2013 | ||
| $000 | $000 | Nmillion | Nmillion | ||
| Under common control | |||||
| SEPCOL | - | 12,000 | - | 1,863 | |
| Cardinal Drilling Services Limited | 19,950 | - | 3,097 | ||
| Abbeycourt Petroleum Company Limited | 38 | - | 6 | - | |
| ---------- | -------- | ---------- | -------- | ||
| 38 | 31,950 | 6 | 4,960 | ||
| \====== | \===== | \====== | \===== | ||
| (i) | Payables | ||||
| Shareholders - | |||||
| Loan from MPI | - | 47,927 | - | 7,441 | |
| \===== | \======= | \====== | \====== |
9. COMMITMENTS AND CONTINGENCIES
There have been no material changes to the Group's commitments or contingent liabilities in the six month period to 30 June 2014.
10. DIVIDEND
The Directors recommended to members the payment of a dividend of $0.10 per 50kobo share amounting to $40 million for the year ended 31 December 2013.
The dividend was approved by the board and paid to members whose names appeared in the Company's register of members as at close of business on 31 December, 2013. This was subsequently paid in the first quarter of 2014. No dividend has been approved or paid for the period.
11. TAXATION
In 2013, the Company and its wholly owned subsidiary, Newton Energy Limited made applications for the tax incentives available under the provisions of the Industrial Development (Income Tax Relief) Act. In February 2014, the Company was granted the incentives in respect of the tax treatment of OMLs 4, 38 and 41 effective 1 January 2013. Newton Energy Limited was also granted similar incentives in respect of the tax treatment of OML 56 effective 1 June 2013. Accordingly, the new incentives form the basis of our current and deferred taxation in the financial statements. Hence there was no tax expense in the six months ending 30 June 2014.
12. OTHER CURRENT FINANCIAL ASSETS AND LIABILITIES
These represent financial instruments other than cash and short term deposits held by the group as at 30 June 2014:
| 6 months to 30 June 2014 | 12 months to 31 December 2013 | 6 months to 30 June 2014 | 12 months to 31 December 2013 | |
| $000 | $000 | Nmillion | Nmillion | |
| Financial asset | ||||
| Derivatives not designated as hedges | ||||
| Foreign exchange Forward contract | 379 | - | 59 | - |
| --------- | -------- | --------- | ---------- | |
| 379 | - | 59 | - | |
| \====== | \====== | \====== | \====== | |
| Financial Liabilities | ||||
| Derivatives not designated as hedges | ||||
| Foreign exchange forward contracts | 2,802 | - | 435 | - |
| --------- | -------- | --------- | ---------- | |
| 2,802 | - | 435 | - | |
| \====== | \====== | \====== | \====== |
As a result of the company international activities, the Group is exposed to foreign currency risk. In order to reduce the risk, the Group determines its net exposure to the primary currencies (USD, GBP and Nigeria Naira). The Group then enters into foreign currency forward contracts to hedge those exposures.
The Group uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally for one month. Consequently, all changes in the fair values of such foreign currency forward contracts are recognised in the statement of profit or loss.
The six month period ended 30 June 2014 experienced volatility in the Naira exchange rates against the US Dollar and the British pound, resulting in net losses on related foreign currency forward contract recorded in profit or loss.
13. SHARE CAPITAL
| 13a. | As at 30 June | As at 30 June | As at 31 December | As at 30 June | As at 30 June | As at 31 December |
| 2014 | 2013 | 2013 | 2014 | 2013 | 2013 | |
| VALUE | $'000 | $'000 | $'000 | Nmillion | Nmillion | Nmillion |
| Authorised ordinary share capital | ||||||
| \==== | \==== | \==== | \==== | \==== | \==== | |
| 1,000,000,000 ordinary shares denominated in Naira of 50K per share Naira of 50K per share | 3,335 | 3,335 | 3,335 | 517.8 | 518 | 519 |
| \==== | \==== | \==== | \==== | \==== | \==== | |
| Issued and fully paid | ||||||
| - | - | - | - | - | - | |
| \==== | \==== | \==== | \==== | \==== | \==== | |
| 553,310,313 issued shares Denominated in Nigerian Naira Of 50K per share | 1,798 | 690 | 1,334 | 277 | 105 | 205 |
| \==== | \==== | \==== | \==== | \==== | \==== |
During the year, the Group issued and allotted 153,310,313 through an initial public offering, resulting in an increase in number of issued and fully paid ordinary shares of 50k each from 400million to 553million shares.
13b Capital contribution
| As at 30 June 2014 | As at 30 June 2013 | As at 31 December 2013 | As at 30 June 2014 | As at 30 June 2013 | As at 31 December 2013 | |
| $000 | $000 | $000 | Nmillion | Nmillion | Nmillion | |
| Additional Contribution | 40,000 | 40,000 | 40,000 | 6,218 | 6,218 | 6,218 |
| -------- | ---------- | ---------- | -------- | -------- | -------- | |
| 40,000 | 40,000 | 40,000 | 6,218 | 6,218 | 6,218 | |
| \====== | \====== | \===== | \===== | \==== | \==== |
This represents M&P additional cash contribution to the Company. In accordance with the Shareholders Agreement, the amount was used by the Company for working capital as was required at the commencement of operations. Subsequently, the interest held by M&P was transferred to MPI. All terms and conditions previously held by M&P were re-assigned to MPI.
13c Share Premium
| As at 30 June 2014 | As at 30 June 2013 | As at 31 December 2013 | As at 30 June 2014 | As at 30 June 2013 | As at 31 December 2013 | |
| $000 | $000 | $000 | Nmillion | Nmillion | Nmillion | |
| Issue Capital | 497,920 | - | - | 77,339 | - | - |
| Transfer to share capital | (464) | - | - | (72) | - | - |
| -------- | ---------- | ---------- | -------- | -------- | -------- | |
| 497,456 | - | - | 77,267 | - | - | |
| \====== | \====== | \===== | \===== | \==== | \==== |
During the year, net proceeds of $497.9m (N77.3billion) was received during the initial public offering. 153,310,313 shares of 50keach totalling $464,000 (N76.7m) were transferred to share capital.
14. Events after the reporting period
At the date of this report there have been no significant events after reporting period, which would have a material effect on the financial statements.
SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC (the ''Company'')
GENERAL INFORMATION
| COMPANY SECRETARY | Isaiah Adesola Odeleye |
| REGISTERED OFFICE AND BUSINESS ADDRESS OF DIRECTORS | 25a Lugard Avenue Ikoyi Lagos Nigeria |
| REGISTERED NUMBER | RC No. 824838 |
| REGISTRARS | DataMax Registrars Limited 2C Gbagada Express Way, Gbagada, Lagos. |
| FRC NUMBER | FRC/2014/00000002714 |
| AUDITORS | Ernst & Young 10th Floor, UBA House 57 Marina Lagos, Nigeria. |
| SOLICITORS | Abhulimen & Co. Anaka Ezeoke & Co. D. D. Dodo & Co. Jakpa, Edoge & Co. Ogaga Ovrawah & Co. Streamsowers & Kohn Thompson Okpoko & Partners Winston & Strawn London LLP |
| BANKERS | Access Bank Plc Afrexim Bank BNP Paribas Diamond Bank Plc First Bank Plc GTBank Plc Skye Bank Plc Stanbic IBTC United Bank of Africa Plc Zenith Bank Plc |
GLOSSARY OF TERMS
Mbopd - million barrels of oil per day
Mmscfd - million metric standard cubic feet per day
This information is provided by RNS
The company news service from the London Stock Exchange
END
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