Research on Seplat Energy PLC (SEPL:LON) from Capital Access Group
Seplat reported a robust quarter financially despite operational issues as it benefitted from exceptionally strong realisations, achieving an 11% premium to Brent. Production has already recovered and is set to grow further. Management demonstrated their confidence in the outlook declaring a USc9 dividend for the quarter, a 96% increase YoY, including a special dividend of USc4.0, and reiterating all guidance metrics for 2026. We raise our earnings forecast for 2026 to US$288.4m (from US$154.5m) to reflect an increase in our average Brent price assumption to US$80/bbl (from US$65/bbl) and introduce our 2028 forecasts. Despite the vigorous share price performance, Seplat continues to look attractive, as it unlocks the value from its giant, under-developed, low-cost resource base of 2,487 million barrels of oil equivalent and stands to benefit the longer the high oil price environment continues. Our calculated net asset values of 668p and 834p at discount rates of 15% and 10%, respectively indicate 17% and 46% upside to the current share price.
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