Seplat PLC - Production disruption cut earnings
SEPLAT reported a 36% y/y decline in Q1 revenue and a net loss of $23 million as performance for the quarter was impacted by the suspension of oil exports at the Forcados terminal from mid-February onwards due to damage of pipeline infrastructure at the loading arm. Crude oil sales for the quarter was down 53% y/y. However, SEPLAT was able to continue gas sales due to the strategic decision taken in 2015 to increase storage capacity for oil, enabling production to continue but at a reduced rate. Working Interest (W.I) production for Q1 stood at 34,179 boed (down 5% y/y). Prior to the Forcados shut-in, production averaged 52,130 boed. Management says it is in final stages of establishing a temporary export solution via the Warri refinery jetty with off-taker Mercuria to enable resumption of oil production, albeit at reduced levels, which will allow the company de-constrain gas sales into the domestic market back to normalised levels.
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