EUR 48.04 For Business Accounts Only

SEPLAT PLC - FY’15 earnings in line, FY’16 production set back

Subsequent to the trading update provided in January (See our 26 January note), SEPLAT announced FY’15 earnings that was largely in line with our revised estimates, save for a surprising tax provision. FY’15 revenue at $571 million came within management’s $550 million to $600 million guidance, and 2% ahead of our revised estimate, whilst pre-tax profit came in at $87 million (Vetiva estimate: $86 million). From the result, we calculate that SEPLAT’s cost of production averaged $24.10/bbl for the year, down from $30.35/bbl recorded in FY’14 as working interest (W.I) production rose 41% to 43,372 boed (liquids: 29,003 bopd, gas: 86 mmscfd), ahead of management guidance of 32,000 boed – 36,000 boed. We calculate FY’15 netback at $23.74/bbl, down from our $48.15/bbl computation for FY’14 as oil prices plunged. Following a $21.5 million tax provision, EPS came in at 12 cents (Vetiva estimate: 15 cents). The Board of Directors has proposed a final dividend of 4 cents (Vetiva estimate: 3 cents) to bring 2015 total dividend to 8 cents, a 69% payout ratio.