SEPLAT’s Subsidiary Raises $50 Million Reserve-based Lending Facility

Seplat Energy Plc, an independent energy company listed on both the Nigerian Stock Exchange and the London Stock Exchange has announced that its wholly-owned subsidiary, Westport Oil Limited, has successfully raised a US$50 million offtake linked reserve-based lending facility due November 2023, in addition to a five-year US$100 million reserve-based lending facility due April 2027.

What is an offtake linked reserve-based lending facility?

The Reserve-based lending facility is a facility to fund the development of oil and gas assets, made available to Nigerian companies to finance the acquisition of oil and gas assets. This initiative was supported by the Nigerian government in a bid to increase indigenous participation in the oil and gas sector.

Crude offtake contracts make it easier for companies to get the required financing. The contract is an agreement between the producer of the product and a buyer, stating that at a particular date in the future, the producer will make a pre-agreed amount of product available at a pre-agreed price, to the buyer.

What you should know

The Offtake Facility is subordinated to the US$110 million senior reserve-based lending facility which carries initial interest of Libor + 10.5% payable semi-annually and is scheduled to commence repayment from March 2023.

Seplat is well-positioned to participate in future asset divestments by international oil companies, farm-in opportunities, and future licensing rounds. These projects have made the need for additional financing, through the reserve-based lending facility crucial to the company.

What you should expect

As a leading supplier of gas to the domestic power generation market, the company has a flagship ANOH project, with the Nigerian Gas Company, which is fully funded. Excellent progress has been made with major gas processing units expected to arrive in Nigeria in Q3 2021, installation to commence before the end of the year, mechanical completion and pre-commissioning in Q1 2022 and first gas flowing to customers before the end of H1 2022.

In Q1 2021, Seplat Energy Plc’s revenue grew by 36.6% to N58 billion from N42 billion in the previous quarter. The company also reported a profit before tax (PBT) of N10.65 billion for the period, up from a loss of N31.11 billion in the same period of 2020. Furthermore, the company recorded a that Net Assets grew by 1.5% from N632 billion to N642 billion.

thepublisherngr

Recent Posts

How Governors’ Endorsement of Tax Bills Prevented Tinubu-Shettima Fallout – Sources

The endorsement of the tax reform bills brought before the National Assembly by President Bola…

8 hours ago

Katsina Lawmaker’s Brother-In-Law Allegedly Dies After Being Shot By Governor’s Security

Sani Murtala, brother-in-law of Katsina State Assembly member representing Sabuwa LGA, Alhaji Ibrahim Danjuma Machika,…

8 hours ago

‘Wabara Does Not Deserve To Be Leader, No Wonder Obasanjo Made Broadcast About His Acts Of Corruption’ – Wike

The Minister of the Federal Capital Territory, FCT, Nyesom Wike, has said the Chairman of the…

8 hours ago

86 bodies recovered after tanker explosion in Niger state

At least 86 people have died in Niger state, following a tanker explosion at Dikko…

8 hours ago

Increase in fuel price not our fault — Dangote Refinery

Dangote Refinery has clarified that “the recent adjustment in our ex-depot price of Premium Motor…

8 hours ago

NNPCL commences rehabilitation of pipelines, depots

The Nigerian National Petroleum Company Limited, NNPCL, says it is undertaking rehabilitation of pipelines and…

8 hours ago