Seplat boosts dividend by 96% on strong Q1 performance, oil price gains

Seplat Energy PLC has reported a strong financial performance for the first quarter ended March 31, 2026, raising its dividend by 96 per cent year-on-year as higher oil prices and a favourable hedge strategy strengthened earnings.

The indigenous energy firm declared a dividend of 9.0 cents per share for the period, comprising a core payout of 5.0 cents and a special dividend of 4.0 cents, reflecting management’s confidence in the company’s cash generation capacity despite operational challenges.

Chief Executive Officer, Roger Brown, said the evolving global energy landscape, particularly tensions in the Middle East, has improved the outlook for oil prices, positioning the company to benefit from stronger revenue streams.

“The conflict in the Middle East has dramatically changed the outlook for the oil and gas industry in 2026,” he said, noting that Seplat’s exposure to full price upside through its hedge structure and its asset base in Nigeria provide a competitive advantage.

Although production in the quarter rose slightly compared to the previous quarter, it fell short of internal projections due to unplanned downtime on third-party infrastructure, particularly onshore facilities.

Average group production declined marginally by 1.4 per cent to 129,841 barrels of oil equivalent per day (boepd), compared to 131,745 boepd recorded in the same period last year.

The company’s offshore assets, however, showed resilience, with output rising by 4.9 per cent to 79,141 boepd, while onshore production dropped by 10 per cent to 50,700 boepd.

Seplat said production has since rebounded, with average output reaching about 153,000 boepd in the first 26 days of April, keeping it on track to meet its full-year production guidance of between 135,000 and 155,000 boepd.

On the financial side, the company recorded a 3.9 per cent increase in gross revenue to $840.7 million, supported by higher realised oil prices, which averaged $86.16 per barrel during the quarter. Cash generated from operations also rose by 10.2 per cent to $337.9 million.

However, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) dipped by 7.3 per cent to $371.3 million, while unit operating costs climbed significantly to $17.1 per barrel of oil equivalent, largely due to maintenance activities and lower production volumes.

Seplat said the cost pressures are expected to ease in subsequent quarters as output stabilises and maintenance programmes wind down, with projected unit costs returning to between $13.5 and $14.5 per barrel.

The company also strengthened its balance sheet during the period, reducing net debt by 21 per cent to $531.6 million and lowering its leverage ratio to 0.43 times. Cash reserves stood at $461.7 million at the end of March.

Operationally, Seplat recorded zero lost time injuries during the quarter, extending its safety record to over 9.1 million man-hours without incident across its operations.

The company also achieved a key milestone with the ANOH Gas Plant, which recorded its first gas in January and is expected to ramp up production in the coming months.

Looking ahead, Seplat said it remains committed to its growth-focused investment programme for 2026, with planned capital expenditure ranging between $360 million and $440 million.

Key projects expected to support performance include the restart of the Yoho field in the second quarter and the commencement of the Oso-BRT Phase 1 gas expansion project in the third quarter, which is projected to significantly increase offshore gas output.

Despite uncertainties surrounding the duration of elevated oil prices, the company expressed optimism about its outlook, projecting improved performance in the second quarter and sustained growth in the medium term.