Page 18 - AfrOil Week 31

AfrOil NEWS IN BRIEF AfrOil

H1-2020 Operational Update, Nigeria: H1-2020 reiterated at 47,000-57,000 boepd, subject to
cash collections from the Nigerian Assets of market conditions. We expect to narrow the
$82.1m compared to $55.3m in H1-2019; aver- guidance range in Q3-2020. Oil hedging: 1.5mn
age gross daily production, of which 89% was barrel at $45 per barrel in Q3-2020, 1.5mn bar-
gas, increased 18% during H1-2020 to 21,300 rel at $30per barrel in Q4-2020, 1mn barrel at
boepd (H1-2019: 18,100 boepd). This includes $30 per barrel in Q1-2021. Full-year capex of
a 22% increase in production from the Uquo $120mn ($86m already invested) to include two
gas field compared to the same period last year, gas wells and related infrastructure.
from 92.7mn cubic feet per day (15,400 boepd) Austin Avuru, Chief Executive Officer, said:
to 113.5 mcf per day (18,900 boepd); achieve- “Seplat has delivered a robust performance
ment of an all-time Nigerian Assets gas produc- despite the unprecedented crises we have expe-
tion record of 177 mcf per day on May 30, 2020; rienced since March. Our continued resilience
Accugas’ customers achieved an all-time record is possible as a result of our financial strength,
peak contribution of 11.5% of Nigeria’s electric- our careful management of risk and our prudent
ity generation or 486 MW on May 23, 2020, with approach to capital allocation. Unlike many in
the contributed electricity being exclusively gen- our industry, we were able to protect our 2019
erated from Accugas sales gas. conditions and financing permitting. dividend and increase our capital investment to
As announced on January 31, 2020, Accugas Significant further potential on the Savannah ensure continued growth.
entered into the first new gas sales agreement for PSC areas remains, with 146 further potential “Our oil hedging strategy and gas revenues
the business in over five years with First Inde- exploration targets having been identified for continue to protect the business from price vol-
pendent Power Limited (FIPL), an affiliate com- future drilling consideration. atility; we are achieving substantial cost reduc-
pany of the Sahara Group, for the provision of Savannah Energy, August 02 2020 tions from our suppliers and are managing our
gas to the FIPL Afam power plant (FIPL Afam). own costs even more carefully in this challenging
Accugas is in the process of working with FIPL to Seplat Petroleum releases period.
validate the third-party infrastructure required “Thanks to the excellent relationships we
to enable the commencement of gas sales under unaudited H1-2020 results have with our Government partners and supply
this contract; chain, our NPDC receivables have fallen and we
In June 2020, Accugas signed a term sheet Seplat Petroleum Development Company, a are managing our payments equitably. The cash
with a significant new industrial gas sales cus- leading Nigerian independent energy company position is also robust because our careful man-
tomer, a subsidiary of a well-respected interna- listed on both the Nigerian Stock Exchange agement of debt has ensured that the majority
tional company, for an initial quantity of up to 5 and the London Stock Exchange, announces its of obligations mature in 2022 and 2023. We are
mcf per day of gas for an initial five-year period. unaudited results for the six months ended June operating within our covenants on all our lines
In addition, Accugas is progressing a project 30, 2020. of debt.
which could see the addition of multiple new gas Operational Highlights: Working interest “This is my final set of results as Chief Exec-
sales customers located within an industrial hub production comfortably within guidance at utive of the Company I helped to found 10 years
area in close proximity to our existing pipeline 51,177 boepd despite market volatility; Eland ago. I thank all my staff, past and present, for
network. OML40/Ubima assets produced 10,861 bpd, working to make Seplat a major force in Nige-
H1-2020 Operational Update, Niger: updated 32% of Group oil volumes, integration progress- rian energy production. I hand a robust and
Competent Person’s Report for the Niger assets ing well; low unit cost of production at $7.60 per successful company over to Roger Brown in the
compiled by CGG Services (UK) Ltd was pub- boe, with cost-cutting initiatives ongoing, par- confidence that he and everyone at Seplat will
lished on May 1, 2020, certifying 35mn barrels ticularly at OML40/Ubima; liquids production make its second decade even more successful
of Gross 2C Resources for the R3 East discov- of 34,117 bpd, gas production of 99mn cubic feet than its first.”
eries with an additional 90mn barrels of Gross (2.804mn cubic metres) per day; ANOH project Seplat Petroleum, July 29 2020
Unrisked Prospective Resources (Best case) remains on track for Q4-2021 first gas, financ-
within tie-in distance to the planned R3 East ing RFP launched; Amukpe-Escravos Pipeline
facilities, and a 2C case economic break-even oil delayed due to access to the Escravos terminal, FINANCE
price estimated at $26 per barrel. expected operational in H2-2020.
As previously announced, an agreement was Financial Highlights: cash increased to Zenith Energy awarded
reached with the Niger Ministry of Petroleum $343mn despite lower revenues, $29mn 2019
to combine the R4 area with the R1/R2 PSC dividend, and $86mn capex; net debt steady at loan facility for African
Area into a new R1/R2/R4 PSC, extending the $457mn with most maturities after 2021; reve-
licences for a further 10 years and retaining the nue $234mn, down 34.2% due to lower oil prices development
full acreage position previously covered by the and demand; IAS 36 impairment provision of
R1/R2 PSC and the R3/R4 PSC, and that the $146mn (non-cash) in line with IAS 36 COVID- Zenith Energy has announced that its Italian
R3 PSC area will continue as a stand-alone PSC 19 impact assessment; provision reverses operat- subsidiary has received approval to be awarded
area. Ratification of these changes is subject to ing profit of $33mn to operating loss of $113mn. a legally binding loan facility for an amount of
Council of Minister approval and payment of the Business continuity: business continuity approximately €300,000 from an Italian govern-
associated fee. and re-opening plan successfully mitigating mental entity.
Plans for delivering the R3 East development the impact of COVID-19 lockdowns; oilfield The Loan attracts an interest rate of 0.85%,
continue to progress with the intention to com- operations largely unaffected, 28-day rotations has a grace period of 24 months during which
mence installation of an Early Production Sys- in force. only the interest will be payable, normal financial
tem (EPS) within the next 18 months, market Outlook: full-year production guidance covenants, and a duration of six years.

P18 www. NEWSBASE .com Week 31 05•August•2020