Prior to this, the company’s working interest production was averaging around 52,130 boepd. Repairs are currently on-going to expedite the resumption of exports from the terminal. The company has, however, continued to produce and sell gas into the domestic market meaning it is better positioned to withstand such interruptions than in prior years. Gas production in the first quarter was 100.7 MMscfd, up 113% year-on-year.
Sundiata Post gathered that total revenue in the period fell to $83 million. Within this, crude revenue after lifting adjustments was $56 million, 53% lower than the same period in 2015. Gas revenue increased by 145% year-on-year to $27 million as the step-change in gas production arising from the Oben gas plant expansion, and higher pricing, continue to take effect.
Gross profit stood at $30 million and net loss after tax $19 million, reflecting the lower realised oil price and shut-in of the Forcados terminal. Capital investments incurred during the first three months totaled US$9 million against cash generated from operations of $64 million. Cash at bank was $298 million and net debt $540 million at period end. The outstanding NPDC net receivable as at 31 March was $353 million, down from US$435 million at end 2015.
Responding, Austin Avuru, Seplat’s Chief Executive Officer, disclosed that the company’s first quarter results reflect the impact of the shut-in and suspension of oil exports at the Forcados terminal from mid-February onwards
According to the CEO “We are in the final stages of establishing a temporary export solution via the Warri refinery jetty with our off-taker Mercuria to resume oil production, albeit at reduced levels, which will enable us to de-constrain gas sales into the domestic market back to normalised levels. Longer term it remains an absolute priority of ours to secure reliable alternative export options and achieve greater diversification through development of the wider portfolio.
“Despite these challenging circumstances I am pleased to report that we continued to supply an average gross rate of 224 Million Standard Cubic Feet per Day (MMscfd) sales gas into the domestic market and that the business remains on a sound financial footing with strong fundamentals that together provide resilience to such setbacks” he added. Information contained within this release is un-audited and is subject to further review.
Total average working interest production during the first three months decreased by 5% to 34,179 boepd (compared to 35,811 boepd for the same period in 2015).
Sundiata Post investigations reveal that the company is actively pursuing alternative crude oil evacuation options for production at its Western Assets and potential strategies to further grow and diversify production in order to reduce any over-reliance on one particular third party export system. In the light of this, the company is in the final stages of establishing one such option whereby crude oil exports will be sold FOB at the Warri refinery jetty to Seplat’s off-taker Mercuria. This barging solution is initially being implemented on a trial basis to restore gas production to normalised levels, with a view to determining whether it can be adopted as a longer term alternative alongside exports via the Trans Forcados System when the terminal reopens.
