Seplat Energy Plc (NGX: SEPLAT) has announced that it has completed its acquisition of Mobil Producing Nigeria Unlimited from ExxonMobil.
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In a regulatory filing on Thursday, the company termed the transaction as transformative for Seplat Energy, more than doubling production to around 120,000 barrels of oil equivalent per day and providing the Company with a significant opportunity to further drive its growth and profitability, whilst contributing significantly to the Nigerian economy.
About completion of acquisition, Udoma Udo Udoma, Chairman of Seplat Energy, said:
“Seplat Energy sincerely thanks His Excellency, President Bola Ahmed Tinubu GCFR, for supporting this transaction, and appreciates the support and diligence of the various Ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the Government, regulators, communities and our staff.”
Roger Brown, Chief Executive Officer of Seplat Energy, said:
“Today we have achieved a major milestone in the history of Seplat Energy and I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders.”
Strategic Priorities & Near-term Outlook MPNU adds substantial reserves and production to Seplat Energy; 409 MMboe 2P reserves and
670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd.
As operator, Seplat’s immediate tasks are to ensure smooth transition of MPNU staff into Seplat, and on the operations, to swiftly target numerous opportunities that exist to organically grow production and further enhance the value of the assets for all stakeholders.
Detailed guidance for the enlarged Group in 2025 will be provided with Seplat’s full year 2024 results, expected in late February 2025.
Seplat Energy Plc on Monday published a the prospectus regarding the MPNU acqusition.
The transaction highlights includes;
- Final cash consideration payable to ExxonMobil at closing is $672 million
o $128 million deposit paid in 2022 at first SPA signing
o Total consideration at closing $800 million
o Fully funded from available cash and debt facilities, no new equity issuance required - Further amount of $257.5 million(4) deferred to December 2025, related to Decommissioning and Abandonment and certain Joint Venture (‘JV’) costs that will be partially offset by JV cash calls. The after-tax impact of this component on MPNU expected to be $25-35 million. The Company will incur $23 million in other transaction related costs, with $64 million regulatory consent fees reflected in adjustments to the cash consideration due at closing
- Pro-forma 2P reserves for the enlarged group of 887 MMboe (at 30 June 2024), an increase of 86% on Seplat’s reported 2P reserves, and pro-forma 2P + 2C reserves and resources of 1,210 MMboe an increase of 124%
o EV/2P ratio ~$2.0/boe, EV/2P+2C ratio ~$1.2/boe - Production increases 148% on a pro-forma basis (6M 2024) to 119.8 kboepd
- Revenue increases 245% on a pro-forma basis (6M 2024) to $1,456 million
- Adjusted EBITDA increases 199% on a pro-forma basis (6M 2024) to $800 million
- Creates Nigeria’s leading independent energy company. The enlarged company has equity in:
o 11 blocks in onshore and shallow water Nigeria
o 48 producing oil & gas fields;
o 5 gas processing facilities; and
o 3 export terminals - License portfolio with multiple high-potential investment opportunities to drive growth
o Short term oil gain (STOG) activities focused on well stock and facilities
o Multiple in-fill and exploration drilling locations
o Multi-Tcf gas opportunity from commercialisation of undeveloped gas resources - Strong balance sheet position maintained. Pro-forma Net debt/EBITDA at 30 June 2024 similar to Seplat reported leverage at 30 June 2024 of 0.8x, and well inside corporate policy of 2.0x
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
