Research on Seplat Energy PLC (SEPL:LON) from Capital Access Group
Seplat has reported a strong set of results for 1H26 reflecting a rebound in production QoQ and benefitting from strong liquids realisations including a notable premium to Brent. The quarterly dividend has been hiked to 12 cents and a full year dividend intention set at 45 cents In addition, the company has announced agreement to transfer 10% of its current 40% interest in SEPNU to NNPC, as previously indicated, for a headline transaction value of $281.6m representing approximately 25% of the gross transaction value of Seplat's original deal with ExxonMobil. Roughly half of the proceeds will be returned as an additional dividend, taking the total announced dividend for the year to 68.3 cents, for a current yield of c10% with the balance to reduce further the already low debt position. We amend our estimates for higher realisation, higher opex and the revised dividend profile resulting in a 9% increase in our EPS estimate, which still looks likely to prove conservative. On a preliminary review, we do not see any material change to our NAV estimates for Seplat on a post transaction basis.
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