Seplat Energy (LON:SEPL) reported higher first-half revenue, cash flow and shareholder distributions as production recovered in the second quarter following a pipeline shutdown earlier in the year. The Nigerian energy company also announced a binding heads of agreement to sell part of its offshore acquisition to Nigerian National Petroleum Co. Ltd. (NNPC).
Chief Executive Officer Roger Brown said production averaged just under 140,000 barrels of oil equivalent per day during the first half, within the company’s 2026 guidance range of 135,000 to 155,000 boepd. Production increased 15% quarter over quarter in the second quarter after the Trans Forcados Pipeline shutdown affected first-quarter operations.
Revenue and cash flow rise
Group revenue increased 30% year over year to $1.8 billion, supported by higher production and stronger realized prices, CFO Eleanor Adaralegbe said. The company’s realized premium to Brent rose by more than $7 per barrel, compared with nearly $2 per barrel in the prior-year period.
Adaralegbe said the premium had become “a very meaningful competitive advantage” for Seplat, while the combined onshore and offshore business was beginning to generate operational efficiencies. Fiscal advantages from its onshore assets after conversion to Nigeria’s Petroleum Industry Act framework also contributed to a stronger margin profile, she said.
Seplat reported EBITDA approaching $1 billion for the half year, with a 52% margin. Cash flow from operations before tax was also nearly $1 billion, up 29% year over year. Free cash flow totaled $526 million in the first half, nearly matching the company’s free cash flow for all of 2025, according to Adaralegbe.
First-half capital expenditure represented about 27.5% of Seplat’s planned full-year spending, with more investment expected in the second half as drilling activity accelerates. The company said it expects eight rigs to be drilling across its businesses by the next quarter, including its first offshore rig.
Gross debt declined to about $805 million from $1.4 billion before the Exxon acquisition, while available liquidity stood at approximately $834 million. Adaralegbe said the next significant debt maturities are in 2030. Management said it will assess conditions before deciding whether to refinance or call its $650 million bond, which becomes callable in March 2027.
Offshore stake sale and dividend plans
Brown said Seplat signed a legally binding heads of agreement with NNPC covering the sale of 25% of the offshore acquisition it made from Exxon for $281.6 million. The company referred to the transaction as a 10% divestment, and said the effective date would be April 1, 2026. Closing is expected in the second half, subject to execution of a sale and purchase agreement and required approvals.
Seplat will remain operator of the joint venture and expects to retain a 30% working interest after the transaction. Brown said the company sees substantial potential in the offshore assets despite the lower interest and does not have plans for further divestments.
The company expects to return approximately half of the transaction proceeds to investors, with the remainder allocated to debt reduction and cash. Subject to completion, Seplat expects the proceeds to add $140 million to shareholder distributions for 2026.
Seplat raised its second-quarter dividend to 12 cents per share, bringing first-half declared distributions to 21 cents per share, or $124 million. The company increased full-year dividend guidance to 45 cents per share, based on an assumed average oil price of $85 per barrel. Including the potential additional payout related to the NNPC transaction, total 2026 distributions could reach $410 million, or 68.3 cents per share.
Adaralegbe said the proposed $410 million distribution would represent 41% of Seplat’s stated goal of delivering $1 billion in cumulative dividends.
Operational recovery and projects
COO Samson Ezugworie said Seplat recorded no lost-time injuries during 18.8 million work hours in the first half. The company also reported a 29% reduction in carbon dioxide emissions, principally from its onshore flare-out program.
Seplat restored 24 idle wells during the first half, adding 26,000 boepd. In the second quarter, 15 restored wells contributed 16,000 barrels. Since the program began, Seplat has restored 73 wells and added 75,000 boepd at a cost of $109 million, or about $1.5 million per well, Brown said.
The company plans to restore another 26 wells in the second half. It also said the Yoho restoration project is mechanically complete and entering commissioning, with production expected to begin contributing during the third quarter. Management said Yoho could return to full production within a couple of weeks after restart.
In gas, Seplat said the ANOH plant was operating at around 60% capacity, constrained by third-party export infrastructure. Effiong Okon, who becomes CEO on Aug. 1, said the company expects ANOH to reach full potential before year-end as export routes and the OB3 pipeline become available.
Tobita Phase 1 remains on track for commissioning and first gas in the fourth quarter. The project is expected to add 120 million standard cubic feet per day of export capacity, increasing offshore export capacity to 240 million standard cubic feet per day.
Leadership transition and outlook
Brown will step down as CEO on July 31 after 13 years with Seplat. Okon, who has worked at the company since 2018 and has focused on operations and the gas business, will assume the role on Aug. 1. Chairman Senator Udoh Oma is scheduled to step down at year-end, with Sir Tony Elumelu set to become chairman on Jan. 1.
Okon said Seplat remains confident it can finish 2026 within production guidance and expects its exit rate to be near the upper end of the 155,000 boepd range. The company cited Yoho’s return, ANOH ramp-up, gas projects and expanded drilling as key drivers for the second half.
About Seplat Energy (LON:SEPL)
Seplat Energy is Nigeria’s leading indigenous, independent oil and gas producer, producing oil and gas production volumes of 48,152 barrels of oil equivalent per day (boepd) in 9M 2023, including 117 MMscfd (20,083 boepd) of processed natural gas for domestic power generation in 9M 2023.
Seplat Energy is focused on powering Nigeria’s energy transition. Our goal is to help meet the energy needs of Nigeria’s rapidly growing population by providing accessible, reliable and sustainable energy, at the same time increasing shareholder value.
