Seplat Energy Plc’s outlook remains positive, driven by expectations of stronger working interest production across its assets. In H1’25, the company delivered a 231.5% YoY revenue surge, buoyed by working interest volumes despite oil price volatility.
Seplat’s gas production is expected to play a crucial role in supporting topline growth in H2’25. The company has made significant progress in its gas production capabilities, with the commencement of gas production from the Sapele Gas Plant and the completion of the ANOH Gas Plant. The ANOH Gas Plant is expected to boost Seplat’s gas revenues materially, and the company has already achieved a key milestone with the receipt of third-party gas and the commencement of live hydrocarbon testing.
The company’s production volumes have been on the rise, driven by the success of new wells from the 2024 drilling program and stronger-than-expected gas output. Seplat’s working interest production volumes averaged 134.5 kboepd (+177.9% YoY) in H1’25, comprising 54.8 kboepd from SEPLAT’s onshore operations (+13.2% YoY) and 79.7 kboepd from SEPNU assets.
CardinalStone has updated its 12-month target price to N8,297.63, representing a 54.3% upside to the current market price. The analyst maintains a BUY recommendation on the counter, citing the company’s strong production growth, improved gas volumes, and increased liquidity as key drivers of value.
However, investors should be aware of potential risks, including volatility in global oil prices, potential downtime at evacuation terminals, and delays in the PIA conversion for SEPLAT Onshore. These risks could impact Seplat’s revenue and profitability, and investors should carefully consider them when making investment decisions.
Investors should be aware of the potential risks that could impact Seplat Energy’s valuation and financial performance. Changes in global oil prices can significantly impact Seplat’s revenue and profitability. A decline in oil prices could reduce the company’s revenue and profitability, while an increase in oil prices could have a positive impact.
Disruptions to evacuation terminals could also impact Seplat’s production and revenue. If the company’s evacuation terminals experience downtime, it could lead to a decline in production and revenue, which could negatively impact the company’s financial performance.
Additionally, delays in converting Seplat Onshore assets to the PIA regime could prolong elevated tax expenses and weigh on earnings. The company is working to convert its assets to the PIA regime, but any delays could impact its financial performance.
These risks could have a significant impact on Seplat’s financial performance, and investors should carefully consider them when making investment decisions. It’s essential to monitor these risks and assess their potential impact on the company’s future performance.
