Seplat Energy has reported a strong financial performance for the first half of 2025, with revenue increasing by 231% to $1,398 million compared to the same period last year. This significant growth in revenue is a testament to the company’s ability to generate strong cash flows from its operations.
Revenue and Profitability:
The company’s revenue growth was driven by its strong production performance, which resulted in an adjusted EBITDA of $735 million, up 175% on prior year. The company’s cash generated from operations also increased significantly, rising to $766.2 million, up 239% on prior year. This strong cash generation has enabled Seplat Energy to maintain a healthy balance sheet, with end-June cash at bank of $419.4 million, excluding $133.0 million restricted cash.
Cost Management:
Seplat Energy’s unit production operating cost was $12.5 per barrel of oil equivalent (boe), below the company’s guidance of $14-$15/boe. This was due to the timing of planned maintenance, which is expected to impact costs in future periods. The company’s cash capital expenditure was $96.5 million, slightly lower than the $102.4 million spent in the same period last year.
Debt and Credit Ratings:
The company’s net debt at end-June was $676 million, down 9.5% on prior quarter. This reduction in net debt has resulted in an improvement in the company’s pro forma net debt to EBITDA ratio, which stands at 0.53x. Seplat Energy’s credit ratings have also been upgraded, with Fitch upgrading its rating to B in April 2025 and Moody’s upgrading its rating to B2 (stable) in June 2025.
Dividend and Capital Allocation Policy:
The company has declared a dividend of US$ 4.6 cents per share for Q2 2025, in line with the prior quarter dividend. Seplat Energy plans to set out a revised capital allocation policy in its Capital Markets Day scheduled for September 18, 2025. This will provide investors with valuable insights into the company’s strategy and growth prospects.
Repayment of RCF:
Post-period end, Seplat Energy repaid the outstanding $100 million on its revolving credit facility (RCF). At the end of July 2025, the $350 million RCF is undrawn and fully available, providing the company with flexibility to fund its growth plans.
Overall, Seplat Energy’s strong financial performance in H1 2025 demonstrates the company’s ability to generate strong cash flows from its operations and maintain a healthy balance sheet. With its robust financial position and growth prospects, Seplat Energy is well-positioned to deliver value to its shareholders.
