Seplat Energy and four other oil & gas companies listed on the Nigerian Exchange Limited posted a total revenue of N384.216 billion in the first quarter (Q1) of 2023.
The oil & gas firms under review are divided into upstream and downstream companies with Seplat Energy the sole upstream oil and gas player listed on the Exchange. They all reported a revenue boost in the first three months of the year. The five companies’ total revenue jumped from N269.077 billion in the corresponding period in 2022 to N384.216 billion declared in the period under review.
The revenue growth is remarkable, considering economic disruptions in the global economy occasioned by the ripple effect on energy, power, and food cost, amongst others, caused by the Russia-Ukraine face-off.
Financial analysts highlighted that the global energy shortages associated with the Russia/Ukraine conflict continue to bode well for upstream players in the oil & gas sector, evidenced by the record gains also seen in the sector on the Nigerian Exchange.
Also, the NGX Oil & Gas index recorded a year-to-date growth as at June 16, 2023 to 55.82 per cent to top the highest gainer. Analysts stated that the companies’ earnings were bolstered by the rise in oil prices, amid foreign investors continuously exploiting the fungibility of the stock in repatriating their funds, saying that this coupled with increases in the share prices of the companies, underpinned the sector’s stellar performance.
Seplat Energy rode on higher oil prices to report a 51.1 per cent boost in topline revenues to N152 billion in Q1. TotalEnergies Marketing Nigeria, downstream company reported a massive 39 per cent boost in revenues topping N84.216 billion in the first three months; while Conoil’s revenue grew by 33.7 per cent to N34.968 billion.
Eterna posted a revenue growth of 16.25 per cent to N31.182 billion, while MRS Oil Nigeria reported a 72.04 per cent revenue growth to N30.788 billion in Q1, 2023.
Speaking on the performance, the president of Investors Alternative Dispute Resolution Initiative (IADRI), Moses Igbrude, said, “it is a good performance and an excellent result. This is despite the unfavorable economic environment where the government is a competitor and sole importer of petrol, coupled with forex shortage, kudos to them.
“To improve on this performance, the companies should focus more on their competitive advantage areas such as lubricant production, diesel import, insecticide production as well as car services business and any other areas where they can make good margins in their business operations. They should also manage their costs effectively,” he said.
On oil & gas companies performance in 2023, analysts at Cordros Securities Limited stated that “2023 may be the year that some semblance of normalcy is restored to the downstream oil and gas sector. The federal government, having kicked the can down the road in 2022, once again intends to permanently halt PMS subsidy by June 2023, essentially deciding to implement that of the incoming government.
“In the midst of these, we imagine that there will be intermittent PMS scarcity in the process of coming up with modalities for distributing PMS from the Dangote refinery (expected to commence operation this year) and importing fuel as the refinery is expected to operate below capacity at the onset of operations.”
On Q1 performance, independent chairman of Seplat Enery, Basil Omiyi said, “Seplat Energy’s management and staff have once again delivered excellent performance, with production volumes up, unit production cost down and strong cash generation enabling the Board to increase our annual core dividend target from US 10 cents to US 12 cents per share, paid in equal quarterly dividends.
“The year has started strongly, and we are now seeing the benefits of the AEP, through which we are exporting significant amounts of oil. On the ANOH gas plant, our partners have made good progress in the quarter on delivering the OB3 and Spur pipelines, as well as the necessary gas wells, and we maintain Q4, 2023 for first gas.”
He stated that “we continue to engage with all relevant parties in the proposed acquisition of Mobil Producing Nigeria Unlimited (MPNU) and are confident of a successful outcome.”
