REG - SEPLAT PetDevCom Plc - Full year 2015 financial results <Origin Href="QuoteRef">SEPLAT.LG</Origin> - Part 2
01/04/2016 17:49
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and main market of the
London Stock Exchange on 14 April 2014.
On 1 June 2013, Newton Energy Limited (''Newton Energy''), an entity previously beneficially owned by the same shareholders
as SEPLAT, became a subsidiary of the Company. On 1 June 2013, Newton Energy acquired from Pillar Oil Limited (''Pillar
Oil'') a 40 percent participant interest in producing assets: the Umuseti/Igbuku marginal field area located within OPL 283
(the ''Umuseti/Igbuku Fields''). The total purchase price for these assets was $50 million paid at the completion of the
acquisition in June 2013 and a contingent payment of $10 million payable upon reaching certain production milestones.
$57.7 million was allocated to the producing assets including $7.7 million as the fair value of the contingent
consideration as calculated on acquisition date.
These milestones were not reached as such the contingent consideration has now been reversed and the contingent payment of
$10m will not be paid
The Company's registered address is: 25a Lugard Avenue, Ikoyi, Lagos, Nigeria.
The Company together with its subsidiary, Newton Energy, and four wholly owned subsidiaries, namely, SEPLAT Petroleum
Development Company UK Limited (''SEPLAT UK''), which was incorporated on 21 August 2013, SEPLAT East Onshore Limited
(''SEPLAT East''), which was incorporated on 12 December 2013, SEPLAT East Swamp Company Limited (''SEPLAT Swamp''), which
was incorporated on 12 December 2013, and SEPLAT Gas Company Limited (''SEPLAT GAS''), which was incorporated on 12
December 2013, is referred to as the Group.
Report of the directors continued
Results:
2015 2014 2015 2014
$000 $000 N'm N'm
Profit before taxation 87,079 252,253 17,245 40,481
Tax expense (21,472) - (4,252) -
Profit after taxation 65,607 252,253 12,993 40,481
Dividend declared for the year - - - -
Retained profit for the year 65,607 252,253 12,993 40,481
Dividend:
During the year, the directors recommended to members an interim dividend of $0.04 per 50kobo share amounting to $22
million (2014: $33million)
The Directors are recommending to members the payment of a final dividend of $0.04 per 50kobo share amounting to $22.4
million - N4.4billion (2014: $49.8illion @ $0.09 per share, N9.8billion).
Changes in property, plant and equipment
Movements in the Property, plant and equipment and significant additions thereto are shown in note 11 to the financial
statements.
Board of directors
The names of the Directors are shown on page 7. In accordance with the provisions of Section 259 of the Companies & Allied
Matters Act, CAP C20, Laws of the Federation of Nigeria (LFN) 2004, one third of the directors of the Company shall retire
from office. The directors to retire every year shall be those who have been longest in office since their last election.
Apart from the Executive Directors and Founding Directors, all other Directors are appointed for a fixed term. At
expiration of the terms, they may be eligible for re-appointment.
Report of the directors continued
The Board has the following Committees:
1. Audit Committee
Chief Anthony Idigbe, SAN Committee Chairman
Mrs. Ifueko Omoigui Okauru Member
Dr. Charles Okeahalam Member
Mr. Michel Hochard Member
Dr. Faruk Umar Member
Sir Sunny Nwosu Member
2. Finance Committee
Dr Charles Okeahalam Committee Chairman
Mr Michael Alexander Member
Mrs Ifueko Omoigui Okauru Member
Lord Mark Malloch-Brown Member
3. Nomination and Establishment Committee
Dr. A.B.C. Orjiako Committee Chairman
Mr. Basil Omiyi Member
Mr. Michael Alexander Member
Mr. Damian Dinshiya Dodo Member
4. Remuneration Committee
Mr. Michael Alexander Committee Chairman
Mr. Basil Omiyi Member
Dr. Charles Okeahalam Member
Mr. Damian Dinshiya Dodo Member
5. HSSE and Risk management Committee
Mr. Basil Omiyi Committee Chairman
Mr. Macaulay Agbada Ofurhie Member
Mrs Ifueko Omoigui-Okauru Member
6. Corporate Social Responsibility Committee
Lord Mark Malloch-Brown Committee Chairman
Mr. Macaulay Agbada Ofurhie Member
Mrs. Ifueko Omoigui Okauru Member
Report of the directors continued
Record of attendance of board and committee meetings
In accordance with Section 258 Subsection 2 of the Companies and Allied Matters Act, CAP C20, LFN, 2004 the record of
attendance of Directors at Board Meetings and that of its Committees in the year under review is published herewith:
Board of Directors
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Ambrosie Bryant Chukwueloka Orjiako (Chairman) 6 6
2. Ojunekwu Augustine Avuru 6 6
3. William Stuart Connal 6 6
4. Roger Thompson Brown 6 6
5. Michel Hochard 6 6
6. Macaulay Agbada Ofurhie 6 6
7. Michael Richard Alexander 6 6
8. Charles Okeahalam 6 6
9. Basil Omiyi 6 6
10. Ifueko Omoigui Okauru 6 6
11. Lord Mark Malloch-Brown 6 4
12. Damian Dinshiya Dodo 6 4
Finance Committee
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Charles Okeahalam Chairman 5 5
2. Michael Alexander 5 5
3. Ifueko M. Omoigui-Okauru 5 4
4. Lord Mark Malloch-Brown 5 5
Nomination and Establishment Committee
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Ambrosie Bryant Chukwueloka Orjiako 3 3
2. Basil Omiyi 3 2
3. Michael Richard Alexander 3 3
4. Damian Dinshiya Dodo 3 3
Report of the directors continued
Board of Directors:
Remuneration Committee
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Michael Richard Alexander 4 4
2. Basil Omiyi 4 3
3. Charles Okeahalam 4 4
4. Damian Dinshiya Dodo 4 4
Risk Management, HSE and Communities Committee
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Mr. Basil Omiyi 4 4
2. Mr. Macaulay Agbada Ofurhie 4 4
3. Ifueko M. Omoigui Okauru 4 4
Report of the directors continued
Corporate Social Responsibility Committee
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Lord Mark Malloch-Brown 4 4
2. Mr. Macaulay Agbada Ofurhie 4 4
3. Ifueko M. Omoigui Okauru 4 3
Audit Committee
S/N Name No. of Meetings No. of times
in the year in Attendance
1. Chief Anthony Idigbe, SAN 5 5
2. Mrs. Ifueko Omoigui Okauru 5 5
3. Dr. Charles Okeahalam 5 3
4. Mr. Michel Hochard 5 4
5. Dr. Faruk Umar 5 5
6. Sir Sunny Nwosu 5 5
Directors' interest in shares
The interests of the Directors (and of persons connected with them) in the share capital of the Company (all of which are
beneficial unless otherwise stated) as at 31 December 2015, are as follows:
No. of As a percentage
Ordinary Shares of Ordinary
Shares in issue
Ambrosie Bryant Chukwueloka Orjiako(1) 84,736,913 15.04
Ojunekwu Augustine Avuru(2) 73,297,011 13.00
William Stuart Connal 14,433 -
Roger Thompson Brown 1 -
Michel Hochard - -
Macaulay Agbada Ofurhie 4,806,373 0.85
Michael Richard Alexander - -
Charles Okeahalam 502,000 0.09
Basil Omiyi 400,000 0.07
Ifueko Omoigui Okauru - -
Lord Mark Malloch-Brown - -
Damian Dinshiya Dodo - -
Notes:
(1) 72,136,912 Ordinary Shares are held by Shebah Petroleum Development Company Limited, which is an entity controlled by
A.B.C. Orjiako and members of his family and 12,600,000 Ordinary Shares are held directly by Dr. Orjiako's siblings and 1
Ordinary Share held by A.B.C. Orjiako.
(2) 27,217,010 Ordinary Shares are held by Professional Support Limited and 1,920,000 Ordinary Shares are held by Abtrust
Integrated Services Limited, each of which is an entity controlled by Mr Augustine Avuru. 44,160,000 Ordinary Shares, are
held by Platform Petroleum Limited, which is an entity in which Mr. Augustine Avuru has a 23 per cent equity interest and 1
ordinary share held by Mr Augustine O. Avuru.
Report of the directors continued
Director's interest in contracts
The Chairman and the Managing Director have disclosable indirect interest in contracts with which the Company was involved
as at 31 December 2015 for the purpose of section 277 of the Companies and Allied Matters Act, CAP C20, Laws of the
Federation of Nigeria in 2015. These have been disclosed in Note 28.
Substantial interest in shares
The issued and fully paid share capital of the Company as at 31 December 2015 is beneficially owned as follows:
Shareholder Number %
MPI S.A. 120,400,000 21.48
Shebah Petroleum Development Company Limited 84,736, 913 15.12
Austin Avuru and Platform Petroleum Limited 73,297,011 13.08
ZPC/SIBTC RSA FUND - MAIN A/C 21,475,235 3.83
STANBIC IBTC TRUSTEE LIMITED/SEPLAT LTIP 10,134,248 1.81
Stanbic Nominees Nigeria Ltd/C002 - Main 6,839,354 1.22
Vazon Investments Limited 7,366,800 1.31
CIS PLC - TRADING 167,880,657 29.95
Others 71,314,343 12.21
560,576,101 100
(1) 72,136,912 Ordinary Shares are held by Shebah Petroleum Development Company Limited, which is an entity controlled by
Dr. A.B.C. Orjiako and members of his family and 12,600,000 Ordinary Shares are held directly by Dr. Orjiako's siblings and
1 Ordinary Share held by Dr. A.B.C. Orjiako.
(2) 27,217,010 Ordinary Shares are held by Professional Support Limited and 1,920,000 Ordinary Shares are held by Abtrust
Integrated Services Limited, each of which is an entity controlled by Mr Augustine Avuru. 44,160,000 Ordinary Shares, are
held by Platform Petroleum Limited, which is an entity in which Mr Augustine Avuru has a 23 per cent equity interest and 1
ordinary share held by Mr Augustine O. Avuru.
Acquisition of own shares:
The company did not acquire any of its shares during the year.
Report of the directors continued
Corporate governance
The Board of Directors of the company is aware of the Code of Corporate Governance issued by the Securities and Exchange
Commission in the administration of the company and is ensuring that the company complies with it.
The Board is responsible for keeping proper accounting records with reasonable accuracy. It is also responsible for safe
guarding the assets of the company through prevention and detection of fraud and other irregularities.
The Board has a Remuneration Committee made up of four of its members, other committees are:
Finance Committee
Nomination and Establishment Committee
Risk Management, HSE and Communities Committee
Corporate Social Responsibility Committee
Audit Committee
The report of the committee and details of its membership are set out on page 6-7.
Donation
The following donations were made by the company during the year (2014: $158,825).
Name of beneficiary $
National undergraduate Scholarship Scheme 28,835
Inter Crisis Group for Peace 25,000
Nigeria association of Petroleum explorationists 24,357
Global pacific & partners international ltd 21,697
Mandilas Ent 15,543
Energy institute 10,537
Nigeria Mining and Geosciences Society 9,098
Petroleum technology association of Nigeria 9,000
Image Consultants 7,144
Easy channel 5,974
Radi 8 3,225
Others 9,085
169,495
Employment and employees
a) Employees involvement and training:
The company continues to observe industrial relations practices such as joint Consultative Committee and briefing employees
on the developments in the company during the year under review.
Various incentive schemes for staff were maintained during the year while regular training courses were carried out for the
employees.
Educational assistance is provided to members of staff. Different cadres of staff were also assisted with payment of
subscriptions to various professional bodies during the year.
The Company will provide appropriate HSE training to all staff, and Personal Protective Equipment (PPE) to the appropriate
staff.
Report of the directors continued
b) Health, safety and welfare of employees:
The company continues to enforce strict health and safety rules and practices at the work environment which are reviewed
and tested regularly. The company provides free medical care for its employees and their families through designated
hospitals and clinics. Fire prevention and fire-fighting equipment are installed in strategic locations within the
Company's premises. The company operates Group life Insurance cover for the benefit of its employees. It also complies with
the requirements of the Pension Reform Act, 2004 regarding its employees.
c) Employment of disabled or physically challenged persons:
The company has a policy of fair consideration of job applications by disabled persons having regard to their abilities and
aptitude. The company's policy prohibits discrimination of disabled persons in the recruitment, training and career
development of its employees.
Auditor
The Auditor, Ernst and Young have indicated their willingness to continue in office in accordance with Section 357(2) of
the Companies and Allied Matters Act, 1990. A resolution will be proposed authorizing the Directors to fix their
remuneration.
By Order of the Board
Mirian Kachikwu
FRC/2015/NBA/00000010739
Company Secretary,
Seplat Petroleum Development Company Plc
25a Lugard Avenue
Ikoyi
Lagos
Nigeria
Date: 24 March 2016
Audit Committee's Report
For the year ended 31 December 2015
To the members of Seplat Petroleum Development Company Plc
In accordance with the provisions of Section 359 (6) of the Companies and Allied Matters Act 2004, members of the Audit
Committee of Seplat Petroleum Development Company Plc hereby report on the financial statements of the company for the year
ended 31 December as follows:
· The scope and plan of the audit for the year ended 31 December 2015 were adequate:
· We have reviewed the financial statements and are satisfied with the explanations and comments obtained:
· We have reviewed the external auditors' management letter for the year and are satisfied with the management's
responses and that management has taken appropriate steps to address the issues raised by the Auditors:
· We are of the opinion that the accounting and reporting policies of the Company are in accordance with legal
requirements and ethical practices.
The external Auditors confirmed having received full co-operation from the Company's management in the course of the
statutory audit and that the scope of their work was not restricted in any way.
Dated this 24th day of March 2016
Chief Anthony Idigbe, SAN
Chairman, Audit Committee
FRC/2015/NBA/00000010414
Statement of directors' responsibilities
For the year ended 31 December 2015
The Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004, requires the directors to prepare
financial statements for each financial year that give a true and fair view of the state of financial affairs of the
Company at the end of the year and of its profit or loss. The responsibilities include ensuring that the Company:
a) keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the company and
comply with the requirements of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004;
b) establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other
irregularities; and
c) prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgments 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 judgments and estimates, in conformity with International Financial
Reporting Standards (IFRS), the requirements of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of
Nigeria 2004 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 Company and of its financial performance 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 Company will not remain a going concern for at
least twelve months from the date of this statement.
Signed On Behalf Of the Directors By
Ambrosie Bryant Chukwueloka Orjiako Ojunekwu Augustine Avuru
Chairman Chief Executive Officer
FRC/2014/IODN/00000003161. FRC/2014/IODN/00000003100
24 March 2016
Ernst & Young10th Floor, UBA House57, MarinaLagos, Nigeria Tel: +234 (01) 844 996 2/3Fax: +234 (01) 463 0481Email: services@ng.ey.comwww.ey.com
Independent auditor's report to the members of Seplat Petroleum Development Company Plc
We have audited the accompanying consolidated and separate financial statements of Seplat Petroleum Development Company
Plc, ("the Company") and its subsidiaries (together "the Group") which comprise the statement of financial position as at
31 December 2015, the statement of profit or loss and other comprehensive income, the statement of changes in equity and
the statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory
notes.
Directors' responsibility for the financial statements
The company's directors are responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards (IFRS), the provisions of the Companies and Allied Matters Act,
CAP C20, Laws of the Federation of Nigeria 2004 and in compliance with the Financial Reporting Council of Nigeria Act, No.
6, 2011 and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of Seplat Petroleum
Development Company Plc as at 31 December 2015, and of its financial performance and its cash flows for the year then ended
in accordance with the International Financial Reporting Standards, provisions of the Companies and Allied Matters Act, CAP
C20, Laws of the Federation of Nigeria 2004 and in compliance with the Financial Reporting Council Act, No. 6, 2011.
Independent auditor's report to the members of Seplat Petroleum Development Company Plc continued
Report on other legal and regulatory requirements
In accordance with the requirement of Schedule 6 of the Companies and Allied Matters Act, CAP C20, Laws of the Federation
of Nigeria 2004, we confirm that:
i) we have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
ii) in our opinion, proper books of account have been kept by the company, so far as appears from our examination
of those books;
iii) the statement of financial position and profit or loss and other comprehensive income are in agreement with
the books of account.
iv) in our opinion, the financial statements have been prepared in accordance with the provisions of the Companies
and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004 so as to give a true and fair view of the state of
affairs and financial performance.
Yemi Odutola FCA
FRC/2012/ICAN/00000000141
For Ernst & Young
Lagos, Nigeria
24 March 2016
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2015
The Group
2015 2014 2015 2014
Notes $000 $000 N'm N'm
Revenue 3 570,477 775,019 112,972 124,377
Cost of sales 4 (321,694) (315,590) (63,705) (50,647)
Gross profit 248,783 459,429 49,267 73,730
Other operating income 5 15,511 - 3,072 -
Other general and administrative expenses 6 (121,474) (151,569) (24,055) (24,324)
Gain on foreign exchange 7,747 (17,152) 1,534 (2,753)
Fair value movements in contingent consideration 26 7,298 (1,132) 1,445 (182)
Operating profit 157,865 289,576 31,263 46,471
Finance income 7a 12,802 11,996 2,535 1,925
Finance costs 7b (83,588) (49,319) (16,553) (7,915)
Profit before taxation 87,079 252,253 17,245 40,481
Taxation 8a (21,472) - (4,252) -
Profit for the year 65,607 252,253 12,993 40,481
Other comprehensive income:
Other comprehensive income to be reclassified
to profit or loss in the subsequent periods
Foreign translation difference 23 (299) (32) 20,540 35,051
Total comprehensive income for the period / year 65,308 - 33,533 -
(Profit)/Loss attributable to non-controlling interest 24 2,154 - 427 -
Profit attributable to parent 67,462 252,221 33,960 75,532
Basic earnings per share EPS ($) 31 0.12 0.50 24 79
Diluted earnings per share ($) 31 0.12 0.50 24 79
Statement of financial position
For the year ended 31 December 2015
The Group
31-Dec 2015 31-Dec 2014 31-Dec 2015 31-Dec 2014
Notes $000 $000 N'm N'm
Assets
Non-current assets
Oil & gas properties 11a 1,436,950 843,603 285,723 155,448
Other property, plant and equipment 11b 11,602 13,459 2,307 2,480
Intangible assets 12 1 48 0 9
Goodwill 33 2,000 - 398 -
Prepayments 14 36,754 131,466 7,308 24,225
Total non-current assets 1,487,307 988,576 295,736 182,162
Current assets
Inventories 16 82,468 54,416 16,398 10,027
Trade and other receivables 17 811,255 1,060,854 161,310 195,480
Prepayments 18 11,639 14,224 2,315 2,621
Cash & short term deposits 19 326,029 285,298 64,828 52,571
Other current financial assets - 890 - 164
Derivatives not designated as hedges 20 23,194 5,432 4,612 1,001
Total current assets 1,254,585 1,421,114 249,463 261,864
Total assets 2,741,892 2,409,690 545,198 444,026
Equity and liabilities
Equity
Issued share capital 21a 1,821 1,798 282 277
Share premium 21b 497,457 497,457 82,080 82,080
Share Equity Reserve 21c 8,734 - 1,729 -
Capital contribution 22 40,000 40,000 5,932 5,932
Retained earnings 865,485 869,861 134,919 135,727
Foreign translation reserve 23 325 26 56,182 35,642
Non-controlling Interest 24 (745) (148)
Total shareholders' equity 1,413,077 1,409,142 280,976 259,658
Non-current liabilities
Interest bearing loans and borrowings 25a 608,846 239,767 121,063 44,181
Deferred tax liabilities 9a 21,233 - 4,222 -
Contingent consideration 26 21,900 9,377 4,355 1,728
Provision for decommissioning obligation 27 3,869 12,690 769 2,338
Defined Benefit Plan 28 6,926 - 1,377 -
Total non-current liabilities 662,774 261,834 131,786 48,247
Current liabilities
Interest bearing loans and borrowings 25b 290,769 348,389 57,817 64,196
Trade and other payables 30 375,033 390,325 74,572 71,924
Current Taxation 8a 239 - 48 -
Total current liabilities 666,041 738,714 132,436 136,120
Total liabilities 1,328,815 1,000,548 545,198 184,368
Total shareholder equity and liabilities 2,741,892 2,409,690 545,198 444,026
Statement of financial position continued
Notes 1-34 are an integral part of the financial statements
The financial statements of Seplat Development Company Plc for the year ended 31 December 2015 were authorized for issue in
accordance with a resolution of the directors on 24 March 2016 and were signed on its behalf by:
A. B. C. Orjiako A. O. Avuru R.T. Brown
FRC/2014/IODN/00000003161 FRC/2014/IODN/00000003100 FRC/2015/IODN/00000007983
Chairman Chief Executive Officer Chief Financial Officer
24 March 2016 24 March 2016 24 March 2016
Statement of changes in equity
For the year ended 31 December 2015
The Group - US Dollars
Issued Share Premium Capital Contribution Share based Reserves Retained Earnings Foreign Translation Reserve Total Non-controlling Interest Total Equity
Share Capital
Notes $000 $000 $000 $000 $000 $000 $000 $000 $000
At 1 January 2014 1,334 - 40,000 - 690,807 58 732,199 - 732,199
Profit for the year - - - - 252,253 252,253 - 252,253
Other comprehensive income - (32) (32) - (32)
Dividends - - - - (73,199) (73,199) - (73,199)
Increase in shares 464 534,523 - - - 534,987 - 534,987
Transaction Costs for shares Issued (37,066) - - - (37,066) - (37,066)
At 31 December 2014 1,798 497,457 40,000 - 869,861 26 1,409,142 - 1,409,142
At 1 January 2015 1,798 497,457 40,000 - 869,861 26 1,409,142 - 1,409,142
Profit for the year 67,462 67,462 (2,154) 65,308
Other comprehensive income 299 299 299
Dividends 32 (71,840) (71,840) (71,840)
Share based payments 8,757 8,757 8,757
Acquisition of NCI 24 1,409 1,409
Increase in shares 23 (23)
At 31 December 2015 1,821 497,457 40,000 8,734 865,485 325 1,413,823 (745) 1,413,077
The Group - Nigerian Naira
Issued Share Premium Capital Contribution Share based Reserves Retained Earnings Foreign Translation Reserve Total Non-controlling Interest Total
Share Capital
Notes N'm N'm N'm N'm N'm N'm N'm N'm N'm
At 1 January 2014 200 - 5,932 106,993 591 113,716 - 113,716
Profit for the year - - - 40,481 40,481 - 40,481
Other comprehensive income 35,051 35,051 - 35,051
Dividends - - - (11,747) (11,747) - (11,747)
Increase in shares 77 88,196 88,273 - 88,273
Transaction Costs for shares Issued (6,116) (6,116) - (6,116)
At 31 December 2014 277 82,080 5,932 - 135,827 35,642 259,658 - 259,658
At 1 January 2015 277 82,080 5,932 - 135,827 35,642 259,658 - 259,658
Profit for the year 13,419 13,419 (427) 12,992
Other comprehensive income 20,540 20,540 - 20,540
Dividends 32 (14,226) (14,226) - (14,226)
Share based payments 1,734 1,734 - 1,734
Acquisition of NCI 24 - 279 279
Increase in Shares 5 (5)
At 31 December 2015 282 82,080 5,932 1,729 134,919 56,182 281,124 (148) 280,976
Statement of cash flows
For the year ended 31 December 2015
The Group
2015 2014 2015 2014
Notes $000 $000 N'm N'm
Cash flows from operating activities
Cash generated from operations 10 38,040 228,171 7,533 36, 607
Income taxes paid 8 - (2,874) - (530)
Net cash flows from operating activities 38,040 225,297 7,533 36,077
Cash flows from investing activities
Investment in oil and gas properties (366,878) (303,214) (72,653) (55,872)
Investment in other property, plant and equipment (4,615) (9,870) (914) (1,819)
Acquisition of Subsidiary (79,409) - (15,725) -
Proceeds from sale of assets 208 - 41 -
Interest received 3,243 11,996 642 1,925
Deposit for investment - (453,190) - (83,508)
(Deposit)/Receipts from Escrow 368,160 72,907
Aborted acquisition costs - (26,056) - (4,182)
Net cash flows from investing activities (79,291) (780,334) (15,702) (143,456)
Cash flows from financing activities
Proceeds from issue of shares - 534,987 - 88,273
Expenses from issue of shares - (37,066) - (6,116)
Proceeds from bank financing 967,101 446,000 191,515 71,575
Repayments of bank financing (735,940) (119,034) (145,738) (19,103)
Loan to subsidiary undertaking - - -
Repayment of shareholder financing - (48,000) (7,703)
Dividends paid (71,840) (73,199) (14,226) (11,747)
Interest paid (77,338) (32,847) (15,315) (5,271)
Net cash inflows/(outflows) from financing activities 81,983 670,841 16,235 109,908
Net increase/(decrease) in cash and cash equivalents 40,731 115,805 8,066 2,529
Cash and cash equivalents at beginning of year 285,298 169,461 52,571 26,300
Foreign translation reserve 32 4,191 23,742
Cash and cash equivalents at end of year 326, 029 285,298 64,828 52,571
Notes to the consolidated financial statements
1. Corporate information and business
SEPLAT Petroleum Development Company Plc (''SEPLAT'' or the ''Company''), the parent of the Group, was incorporated on 17
June 2009 as a private limited liability company and re-registered as a public company on 3 October 2014, under the Company
and Allied Matters Act 2004. The Company commenced operations on 1 August 2010. The Company is principally engaged in oil
and gas exploration and production.
The Company acquired, pursuant to an agreement for assignment dated 31 January 2010 between the Company, SPDC, TOTAL and
AGIP, a 45 per cent participating interest in the following producing assets:
OML 4, OML 38 and OML 41 located in Nigeria. The total purchase price for these assets was $340 million paid at the
completion of the acquisition on 31 July 2010 and a contingent payment of $33 million payable 30 days after the second
anniversary, 31 July 2012, if the average price per barrel of Brent Crude oil over the period from acquisition up to 31
July 2012 exceeds $80 per barrel. $358.6 million was allocated to the producing assets including $18.6 million as the fair
value of the contingent consideration as calculated on acquisition date. The contingent consideration of $33 million was
paid on 22 October 2012.
In 2014, Newton Energy Limited (''Newton Energy''), an entity previously beneficially owned by the same shareholders as
SEPLAT, became a subsidiary of the Company. On 1 June 2014, Newton Energy acquired from Pillar Oil Limited (''Pillar Oil'')
a 40 per cent Participant interest in producing assets: the Umuseti/Igbuku marginal field area located within OPL 283 (the
''Umuseti/Igbuku Fields''). The total purchase price for these assets was $50 million paid at the completion of the
acquisition in June 2014 and a contingent payment of $10 million ($5 million when average daily production of 10,500 bopd
of liquid hydrocarbon sustained over a period of one (1) month is achieved and another $5 million when cumulative
production of 10 million barrels of liquid hydrocarbons from all fields within OML 56 is achieved) by mid-2015. The fair
value of $7.731 million was capitalized to the cost of the asset and a corresponding liability recorded based on the
probability. These milestones were not achieved as at mid-2015 and as such the liability was de-recognized during the
year.
During the year, the Group purchased a 40% working interest in OML 53, onshore north eastern Niger Delta, from Chevron
Nigeria Ltd. for $259.4 million. It has also concluded negotiations to buy 56.25% of Belemaoil Producing Ltd., a Nigerian
special purpose vehicle that has bought a 40% interest in the producing OML 55, located in the swamp to coastal zone of
south eastern Niger Delta. NNPC holds the remaining 60.00% interest in OML 55, and Seplat's effective working interest in
OML 55 as a result of the acquisition is 22.50%.
SEPLAT is paying $132.2 million for its 22.50% interest in OML 55, after adjustments. It has also advanced certain loans of
$80.0 million to the other shareholders of Belemaoil to meet their share of investments and costs associated with
Belemaoil. In addition, SEPLAT said talks are underway to determine repayment terms for the initial deposit against the
acquisition of $52.5 million that Belemaoil funded with bank debt, which may be added to the total amount loaned to
Belemaoil by SEPLAT.
Current gross production at OML 55 is 8,000 barrels of oil per day. Seplat has been designated operator of OML 55. The
Group will also act as technical services provider to Belemaoil.
SEPLAT estimates net recoverable hydrocarbon volumes attributable to its 40% working interest in OML 53 is 51 million
barrels of oil and condensate and 611 billion square cubic feet of gas. Seplat has been designated operator of OML 53.
The Company's registered address is: 25a Lugard Avenue, Ikoyi, Lagos, Nigeria.
The Company together with its subsidiary, Newton Energy, and four wholly owned subsidiaries, namely, SEPLAT Petroleum
Development Company UK Limited (''SEPLAT UK''), which was incorporated on 21 August 2014, SEPLAT East Onshore Limited
(''SEPLAT East''), which was incorporated on 12 December 2014, SEPLAT East Swamp Company Limited (''SEPLAT Swamp''),
which was incorporated on 12 December 2014, and SEPLAT Gas Company Limited (''SEPLAT GAS''), which was incorporated on 12
December 2014, is referred to as the Group.
Notes to the consolidated financial statements
Continued
2. Basis of preparation and significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of the group have been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial information has been
prepared under the going concern assumption and historical cost convention, except for contingent consideration, borrowings
on initial recognition and financial instruments - derivatives not designated as hedges that have been measured at fair
value. The historical financial information is presented in US dollars and Nigerian Naira and all values are rounded to the
nearest thousand ($000) and nearest million (N'm), except when otherwise indicated.
2.2 Basis of consolidation
The consolidated financial information comprise the financial statements of the Group and its subsidiaries as at
31 December 2015. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if and only if the Group has:
· Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee);
· Exposure, or rights, to variable returns from its involvement with the investee; and
· The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when
the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
- The contractual arrangement(s) with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the
Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the
non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the
Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
The financial statements of the subsidiaries are prepared for the same reporting periods as the parent company using
consistent accounting policies.
All intra-group balances, transactions and unrealized gains and losses resulting from intra-group transactions and
dividends are eliminated in full.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it:
· Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
· Derecognizes the carrying amount of any non-controlling interests;
· Derecognizes the cumulative translation differences recorded in equity;
· Recognizes the fair value of the consideration received;
· Recognizes the fair value of any investment retained;
· Recognizes any surplus or deficit in profit or loss; and
Notes to the consolidated financial statements
Continued
· Reclassifies the parent's share of components previously recognized in OCI to profit or loss or
retained earnings, as appropriate, as would be
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