LAGOS - Seplat Energy Plc, a prominent Nigerian energy company dual-listed on the Nigerian Exchange and the London Stock Exchange (LON:LSEG), has published a prospectus detailing the acquisition of Mobil Producing Nigeria Unlimited (MPNU). The finalization of this transaction, expected on Thursday, December 12, 2024, is set to more than double Seplat's production capacity and significantly enhance its reserves and resources.
The acquisition, valued at a total closing consideration of $800 million, is funded through cash reserves and debt facilities without issuing new equity. An additional $257.5 million is deferred to December 2025, relating to decommissioning, abandonment, and certain joint venture costs, which will be partly offset by joint venture cash calls. The post-tax impact on MPNU is estimated to be between $25-35 million.
This strategic move will increase Seplat's production to approximately 120,000 barrels of oil equivalent per day and expand its 2P reserves by 86% to 887 million barrels of oil equivalent (MMboe) as of June 30, 2024. The pro-forma 2P + 2C reserves and resources will see an increase of 124% to 1,210 MMboe.
Financially, the acquisition is expected to substantially boost Seplat's revenue, with a 245% increase to $1,456 million and an adjusted EBITDA rise of 199% to $800 million, both on a pro-forma basis for the first half of 2024. The enlarged group will consist of assets including 11 blocks in onshore and shallow water Nigeria, 48 producing oil & gas fields, five gas processing facilities, and three export terminals.
The transaction also strengthens Seplat's balance sheet, maintaining a pro-forma net debt/EBITDA ratio similar to the 0.8x reported by Seplat as of June 30, 2024, and within the company's policy of 2.0x.
Seplat Energy's CEO, Roger Brown, stated that the acquisition is transformative for the company, providing a significant opportunity for growth and profitability while contributing to the Nigerian economy.
The completion of the acquisition will result in a temporary cancellation of Seplat's shares on the FCA's Official List, with an expected re-admission the following business day. The company will host a conference call for investors and analysts on the day of completion.
The information is based on a press release statement from Seplat Energy Plc.
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