Research on Seplat Energy PLC (SEPL:LON) from Capital Access Group
Despite some headwinds, Seplat reported a strong set of results for the period to September and is on track for a stellar year. Production continues to increase quarter-on-quarter with production guidance narrowed up to 145-155kboed, at the upper end of the previous guidance range (135-155kboed). Despite a substantial underlift and negative working capital, net debt was reduced to US$234.9m and leverage cut to 0.14x with the Advance Payment Facility subsequently paid off and cancelled, meaning all debt raised to acquire MPNU in 2024 has now been repaid. The company announced a total dividend for the quarter of 19.0 cents, up 58% QoQ, taking the total announced dividend for the year to 40.0 cents against the guided full year target of 45.0 cents. In addition, Seplat expects to return around half the proceeds of the disposal of a 10% stake in SEPNU to NNPC which is expected to complete this quarter, representing a further 23.3 cents in prospective dividends. We increase our FY26 Brent price assumption to US$93/bbl (from US$80/bbl) and raise our forecast for net profit by 25% to US$422.8m.
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