22 April 2024

Seplat Energy PLC ("Seplat" or "the Company")

Publication of 2023 Annual Report and Notice of AGM

Seplat Energy PLC confirms it has today published its Annual Report & Accounts for the year ended 31 December 2023. In the report we have adopted for the first time and ahead of requirement, the IFRS Sustainability Standards, improving the level of non-financial disclosures. We also publish the notice of the Company's eleventh Annual General Meeting ("AGM") and forms of proxy. The Company will hold its AGM at 11:00am (WAT) on Thursday, 16 May 2024 virtually. The virtual meeting link for the AGM is https://www.seplatenergy.com/agm-2024/

In accordance with Listing Rule 14.3.6 copies of the Company's Annual Report and Accounts for the year ended 31 December 2023, the Notice of AGM and proxy forms have also been submitted to the FCA for publication through the document viewing facility of the National Storage Mechanism and will shortly be available for inspection at https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism

In accordance with Disclosure Guidance and Transparency Rule ("DTR") 6.3.5R(3), copies are available on the Company's website, https://www.seplatenergy.com

The Company's audited financial statements and extracts of the management report were included in the Company's Final Results announcement on 29 February 2024. That information, together with the Appendices to this announcement, which contains the following additional information that has been extracted from the

2023 Annual Report, constitutes the material required for the purposes of compliance with DTR 6.3.5 only:

  • the Directors' Responsibilities Statement;
  • a description of principal risks and uncertainties that the Company faces; and
  • related party transactions.

This announcement should be read in conjunction with and is not a substitute for reading the full 2023 Annual Report. Page and note references in the text below refer to page numbers and notes in the 2023 Annual Report and terms defined in that document have the same meanings in these extracts.

Enquiries:

Seplat Energy Plc

Emeka Onwuka, Chief Financial Officer

+234 1 277 0400

Eleanor Adaralegbe, Chief Financial Officer, Designate

James Thompson, Head of Investor Relations

ir@seplatenergy.com

Edith Onwuchekwa, Director, Legal & Company Secretary

Chioma Afe, Director External Affairs & Social Performance

FTI Consulting

Ben Brewerton / Christopher Laing

+44 203 727 1000

seplatenergy@fticonsulting.com

Citigroup Global Markets Limited

Tom Reid / Peter Catterall

+44 207 986 4000

Investec Bank plc

Chris Sim / Charles Craven / Jarrett Silver

+44 207 597 4000

About Seplat Energy

Seplat Energy PLC (Seplat) is Nigeria's leading indigenous energy company. Listed on the Nigerian Exchange Limited (NGX: SEPLAT) and the Main Market of the London Stock Exchange (LSE: SEPL), we are pursuing a Nigeria-focused growth strategy in oil and gas, as well as developing a Power & New Energy business to lead Nigeria's energy transition.

For further information please refer to our website, https://seplatenergy.com/

Appendices

Appendix A: Statement of Directors' responsibilities

The following Statement of Directors' responsibilities is extracted from the 2023 Annual Report and Accounts (page 167).

The Companies and Allied Matters Act, 2020, requires the Directors to prepare financial statements for each financial year that give a true and fair view of the financial position of the Group at the end of the year and of its profit or loss. The responsibilities include ensuring that the Group:

  1. keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Group and comply with the requirements of the Companies and Allied Matters Act, 2020.
  2. establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and
  3. prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgements and estimates and are consistently applied.

The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with International Financial Reporting Standards (IFRS), the requirements of the Companies and Allied Matters Act, 2020 and Financial Reporting Council of Nigeria Act, No. 6, 2011.

The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Group and of its financial performance and cash flows for the year. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the Directors to indicate that the Group will not remain a going concern for at least 12 months from the date of this statement.

Signed on behalf of the Directors by:

B. Omiyi

R.T. Brown

Chairman

Chief Executive Officer

FRC/2016/IODN/00000014093

FRC/2014/ PRO/DIR/003/00000017939

29 February 2024

29 February 2024

Appendix B: Principal risks and uncertainties

The following principal risks and uncertainties table is extracted from the 2023 Annual Report and Accounts (pages 79 to 83).

The implementation of our strategy can be hindered by various risks and uncertainties. The risks that the Board considers most significant are described here.

Operational risks

Risk:

Field operations and project

deliverability

Definition: Failure to manage operational

activities in line with planned

expectations can lead to

production misses, project

delays and cost overruns, high

production costs and earlier

than expected field

decommissioning.

Links:

KPI/Performance metric

Net working interest production

Operating costs per boe

Strategy

3/4/5

Material

1/2/3/4/5/6/8/9/

issues

11

Assessment

High

Mitigation: Focus on risk management at planning phase and mitigation plans activated. Compulsory 'peer-to- peer' review for high-value projects and better project management techniques. Protracted land acquisition, preparation and rig startup have been contributory factors which have received focused attention and significant process improvements and improved communications with JV partner and approving regulators to mitigate

delays. Use of smart/intelligent wells to improve recovery and improved

rig performance monitoring and reporting to manage Non-Productive Times (NPTs).

Trend:

Steady. We continue to redefine our project

management approach for improved speed of

delivery and efficiency; Acquired the ISO 55001

Asset Management System certification for Asset

Integrity, successfully preserved the certification by

passing two follow-up surveillance Audits,

consolidate performance across board, maximize

production, maintain a strong balance sheet, and

strategically position the company for future growth.

Risk:

Third party infrastructure

downtime

Definition: An over-reliance on third party

operated transportation

infrastructure can expose the

Company to extended period of

production being shut-in.

Links:

KPI/Performance metric

Net working interest production

Days downtime

EBIT

Strategy

3/4/5

Mitigation: Amukpe to Escravos pipeline (AEP) since commissioning in Q3 2022 has continued to compliment the Trans Forcados Pipeline in the event of a shutdown of the latter. The company continues to explore other export options via barging and crude trucking as a back-up option in extreme cases. All associated Upgrades of existing Amukpe Flowstation & LTF Facilities which were embedded in the Amukpe LTF Upgrade Project Scope shall be individually reviewed and progressed (if necessary) as part of Amukpe Facility Development.

Trend:

Steady. The Forcados export system recorded

significant downtime during the year - however the

AEP since coming onstream has provided

evacuation support for the business and helped

enhance bottom-line liquidity. Risk trend is kept at

Material

2/4/5/6/9

steady with the AEP availability providing support in

issues

the event of an outage of the TFP.

Assessment

Very high

Risk:

HSSE risks

Definition:

Oil and gas activities carry

significant levels of HSSE risks

which must be properly

managed. As activity levels

continue to increase there is a

strong focus on preventing

major environmental (including

the emerging Climate Change -

GHG emissions risk), health or

safety incidents

Links:

KPI/Performance metric

HSE scorecards

LTIR

TRIR

Strategy

1/2/3/4/5

Material

2/4/5/6/7/8

issues

Assessment

Very high

Mitigation: Deployment of an HSSE Management System in line with best practices. Monitoring and reporting of HSSE performance scorecards at management and Board levels. Our HSSE systems and process are subjected to independent review and identified improvement initiatives are deployed. Continual focus on HSSE training and initiatives on incidence prevention. Emergency Response plan set for any eventuality and comprehensive Incident Review panels to identify and channel lessons learnt to improvement activities. Focus on the delivery on projects earmarked to reduce and or eliminate gas flaring as spelt out under the company's "gas flares out roadmap" and new energy transition plan.

Trend:

Steady. Though the risk is inherent, we will continue

to deploy our HSSE

risk management in line with best practices and with

strong emphasis

on prevention.

Operational risks (cont.)

Risk:

Climate-related risks

Definition: IFRS S2 defines climate risk as

the potential negative effects of

climate change on an entity.

These risks are categorised as

climate-related physical risks

and climate related transition

risks.

Links:

KPI/Performance metric

HSE scorecards

LTIR

Mitigation: The company has identified a number of projects to deliver on projects earmarked to reduce and or eliminate routine gas flaring as spelt out under the "gas flares out roadmap"; projects include (i) delivery of the LPG projects at Sapele and Oben, (ii) Installation of booster compressors, and (iii) the commissioning of the Sapele integrated gas plant project.

Other mitigation includes (1.) seek alternative options for cleaner energy, (2.) Participate in all industry discussions and initiatives aimed at the introduction and deployment of Carbon-emissions trading schemes in a developing carbon-trading oil and gas economy.

Trend:

Steady. The risk trend is being kept steady following

the company's focus continued drive and

commitment to deliver all key projects towards

TRIR

Strategy

1/2/3/4/5/6

Material

1/2/3/4/5/6/9/1

issues

0/11

Assessment

Very high

reducing and or eliminating routine gas flaring as spelt out under the "gas flares our road map". Additionally, the company has developed climate change and sustainability/ESG policies.

Risk:

Sustaining Exploration and

Mitigation:

Strict compliance with reservoir management

Appraisal (E&A) programme

guidelines. Building internal capacity with skilled

sub-surface expertise. Drill a minimum of two

Definition:

Exploration and appraisal

exploration wells, as well as continuous M&A work to

activities carry significant levels

secure available opportunities at the right price

of subsurface risk. Sustained

E&A drilling failure will impact

the Company's ability to

organically replace reserves and

production.

Links:

KPI/Performance metric

Trend:

Steady. High grading our exploration portfolio

Reserve replacement

through a thorough prospect screening exercise. In

the near term, plan is to commence exploration

Strategy

4

drilling campaign in the West.

Material

1/2/3/7/9/11

issues

Assessment

Very high

External risks

Risk:

Niger Delta stability and

security

Definition:

Seplat Energy's core operations

are located in the Niger Delta

region of Nigeria and that

comes with significant risks.

Historically, the Niger Delta has

always been a high-risk

environment with security

incidents such as kidnappings,

vandalism and criminal attacks

on O&G installations.

Links:

KPI/Performance metric

LTIR

TRIR

Security incidents

Operating cashflow

Strategy

1/2/3/4/5

Mitigation: The Company, working with other industry players in the region, continue to put pressure on government to find a lasting solution to Niger Delta restiveness and the current security measures put in place by the facility operators, consolidated with government's strategy of dialogue with stakeholders in the region seems to be working.

Trend:

Steady. Efforts by the Govt and industry pressure

groups, aimed at enhancing security in the region

seems to be paying off as the business recorded

zero occurrence in militant attacks, similar to the

previous year 2022. Our monitoring of the response

plans/mitigation actions, remains top notch.

Material

1/2/3/4/5/6/7/9/

issues

10/11

Assessment

Very high

Risk:

Stakeholder management

relationships

Definition: Failure to manage stakeholders

can result in business disruptions

and interference. The Company

prioritises the effective

management of relationships

with all stakeholders including

host communities, JV partners,

government, regulatory bodies

and shareholders.

Links:

KPI/Performance metric

Net working interest production

LTIR

TRIR

Host community incidences

Strategy

1/2/3/4/5

Material

1/2/3/4/5/6/7/8/

issues

9

Assessment

Very high

Mitigation:

Ensure consistent delivery of CSR Initiatives (as well

as full compliance with the terms of the GMOU)

across all operational areas. Sustain local content

development with priority to community contractors.

Tailored CSR programmes, capacity building and

infrastructure development with the host

communities. Organisational focus and clear strategy

to deliver shareholder value pursued by the Board

and management. Implementation of the new PIA

(Petroleum industry Act) - inclusion of impacted

communities as a driver for annulling community

agitation from our immediate host communities

(GMOU vs PIA). Corporate governance, transparency

and proactiveness in dealings with regulators and JV

partners.

Trend:

Steady. We continue to enjoy good working relations

with all stakeholders

of the business.

External risks (cont.)

Risk:

Geo-political risk

Definition:

Nigeria has at times in its history

faced political uncertainties and

threats such as terrorism aimed

at de-stabilising and

undermining the orderly and

effective rule of central

government.

Links:

KPI/Performance metric

Occurrences of civil unrest and

terrorism

Strategy

1/2/3/4/5

Mitigation: Scenarios and response options plan set. Crisis management team in place for high alert political periods. Continue to partner/network with security stakeholders and share intelligence regarding security. Business continuity plans actioned in light of current geo-political situation.

Trend:

Steady. During the year 2023, the company

recorded no incidents of terrorism and secessionist

agitations. As a mitigation strategy, the company

continued to monitor Niger Delta geo-political

developments and issued regular reports to

Material issues

Assessment

1/11

High

management, as well as partnered with security stakeholders in the sharing of intelligence regarding security.

Financial risks

Risk:

Oil price volatility

Definition:

Oil prices have exhibited a

history of volatility and can

fluctuate sharply in line with

external factors.

Links:

KPI/Performance metric

Realised oil price

Operating cashflow

Strategy

3/4

Material

1

issues

Assessment

High

Mitigation: Hedging continues to be our price risk management tool. We conduct price sensitisation on project economics and enforce cost discipline for capital projects sanctioning. Aggressive focus on cost reduction.

Trend:

Steady. Seplat's risk management strategy is to protect

itself against adverse oil price movements through our

oil price hedging policy, which targets hedging c. 6

months in advance via out-of-the-money puts (i.e.,

"disaster protection insurance"). In the year 2023, we

kept focus on our price risk management policy to

protect the company's cash flow stream from

downside scenarios. We will also continue to take

hedge positions and apply cost reduction strategies.

Hedging has been important to several stakeholders,

including our bond investors, our banks and our rating

agencies.

Risk:

Changes to tax status and

Mitigation:

Perform evaluation of business plan and

legislation

performance metrics exclusive

of tax benefits. Project economics were conducted

Definition:

If the tax regime/legislation

to ascertain the impact

under which the Company

of the new PIA on the company's bottom line. All

operates its assets were to

Impact assessment

change (e.g. new PIA tax

of potential tax legislation is monitored at the Board

regime), profitability may be

level.

impacted.

Links:

KPI/Performance metric

Trend:

Steady. The company is participating in all ongoing

Effective tax rate

engagement with stakeholders including community

Tax status

leadership for a better understanding/implementation

of the PIA mechanism.

Strategy

3

Material

1/2/3/4/5/6/9/1

issues

0/11

Assessment

Medium

Risk:

Availability of capital

Mitigation: Emphasis on compliance with requirements of the JV operating agreement for effective/strict JV

Definition:

The oil and gas industry is highly

capital intensive. Significant

amounts of capital are required

to continue development

activities and fund M&A. Non

funding of cashcalls by JV

partners impacts activities and

liquidity.

Links:

KPI/Performance metric

JV receivables

CAPEX

New M&A activities

Strategy

3/4/5/6

Material

1/2/4/5/6/10/11

issues

Assessment

Very high

partner concurrence. Board review and approval of financial strategy and debt portfolio management with strong banking relationships.

Trend:

Decreasing. JV partners continues to remain current in

paying cash calls.

Financial risks (cont.)

Risk:

Cost control risk

Definition:

Cost reduction remains central

to the Company's current

operating strategy. High

operating cost and ineffective

capital cost control negatively

impacts operating cash flows

and profitability.

Links:

KPI/Performance metric

Operating cost per boe

EBIT

CAPEX

Well costs

Strategy

3/4/5

Material

1/3/4/5/6/7/9/1

issues

0/11

Assessment

High

Mitigation: Comprehensive budgeting process approved by the joint venture partner and the Board. Clear cost management targets. Grading of portfolio opportunities and project ranking for capital allocation. Focus on reducing drilling costs at well design phase. Cost monitoring and periodic reporting. Focus on effective contracting strategies for cost reduction.

Trend:

Steady. Cost discipline remains key focus of the

business

Risk:

Liquidity

Definition:

Liquidity risk is the risk that the

Company will

not be able to meet its financial

Mitigation: Manage liquidity risk by ensuring that sufficient funds are available to meet commitments as they fall due. Uses both long-term and short-term cash flow projections to monitor funding requirements for activities and to ensure there are sufficient cash resources to meet operational needs. Cash flow

obligations as they fall due.

Links:

KPI/Performance metric

Operating cashflow

CAPEX

Strategy

3

Material

9/10/11

issues

Assessment

Medium

projections take into consideration the Company's

debts and covenant compliance. Surplus cash held is

transferred to the treasury department which invests

in interest bearing current accounts, time deposits

and money market deposits.

Trend:

Decreasing. The combination of the AEP and the

Trans-Forcados Pipeline assisted Seplat's liquidity

position significantly in the year. We manage liquidity

risk by ensuring that sufficient funds are available to

meet commitments as they fall due, using both long-

term and short-term cash flow projections to monitor

funding requirements for activities.

Risk:

Foreign exchange risk

Definition:

The Company is exposed to

exchange rate

risk to the extent that balances

and transactions are

denominated in a currency

other than the

US dollar.

Links:

KPI/Performance metric

Operating cashflow

CAPEX

Strategy

3

Material

9/10/11

issues

Assessment

High

Mitigation: The company has options to manage its foreign exchange exposure including financial hedge instruments such as forward exchange contracts.

Trend:

Rising. Historically, the Company holds majority of its

cash and cash equivalent in US dollar. Gas contracts

are indexed in US dollar. The Federal Govt Policy on

FX resulted in significant exchange rate fluctuations,

impacting on cost of essential commodities in-country.

Strategic risks

Risk:

Portfolio concentration risk

Definition:

High dependency on a

concentrated portfolio of

producing blocks and limited

number of wells can leave the

Company more susceptible to

declining long-term growth and

reserves depletion.

Links:

KPI/Performance metric

Mitigation: Focus on portfolio expansion strategy from the Board level to diversify current portfolio. Integrated long-term planning on crude oil, gas and other renewables business.

Trend:

Successful execution of new acquisition and farm-in opportunities.

Strategy

3/4/5/6

Material

6/10/11

issues

Assessment

Very high

Steady. The company strategic direction is targeted at accessing oil and gas reserves and resources to support growth in Pillar2 (midstream) and Pillar 3 (new energy)

Risk:

Merger & acquisition (M&A)

risk

Definition: Growth through M&A activities

is part of the Seplat's strategy to

pursue a focused acquisition

and farm-in. M&A deals and

transactions come with

significant risks including

structural, commercial and

integration risks. There is also

the risk of non-achievement of

acquisition targets due to highly

competitive landscape.

Links:

KPI/Performance metric

Successful execution of new

acquisition and farm-in

opportunities.

Strategy

3/4/5/6

Material

5/6/10/11

issues

Assessment

Very high

Mitigation: New business development unit is always looking for the right opportunities for Seplat. Decision review board (EXCOM) process in place to ensure deals are properly vetted and proper due diligence is done for new opportunities:

A Structured ExCom is now in place. The Decision Review board (DRB) process is in place to ensure deals are properly vetted and adequate due diligence done on new opportunities. The ExCom ensures the commercial, structural, KYC and integration risks are fully considered and addressed with mitigation plans approved and in place prior to deal closing.

Trend:

Steady. We have a robust process in place to vet

opportunities and deals.

Risk trends are steady following an ongoing strategy

to acquire more strategic assets. M&A landscape

remains competitive.

Risk:

Bribery and corruption risk

Mitigation:

Extensive training on anti-bribery and corruption.

Embedding corporate governance principles with

key focus on areas of the business which may

Definition:

Bribery and corruption presents

be more susceptible to corruption such as the

a risk throughout the global oil

contracting and procurement process. Processes

and gas industry and represents

exist to guide dealings with public officials.

an ongoing risk to any oil and

gas company.

Links:

KPI/Performance metric

Trend:

Steady. Our geographical location continues to be

Whistle blowing reports.

susceptible to corruption. However, the risk trend is

Number of disciplinary cases.

kept at decreasing following lower cases of whistle

blowing recorded during the year.

Strategy

3

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Seplat Energy plc published this content on 22 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2024 07:45:07 UTC.