Nigerian Producer Realises $3/MMBtu

Nigerian independent producer Seplat Petroleum Development, listed on both London and Lagos stock markets and part-owned by French Maurel & Prom, lost $63mn in 1H 2016, a reversal of its $34mn profit in 1H 2015.

It said July 28 that net production declined by 21% to 25,695 barrels of oil equivalent/day (boe/d), due to the shut-in since February, caused by militants, of the Shell-operated Forcados oil export terminal. Liquids output was down 51% year-on-year at 11,526 b/d, but gas production grew by 59% to 85mn ft^³/d.

Seplat’s 1H 2016 average gas realised price in Nigeria increased 11% year-on-year to $3.05/'000 ft³, equivalent to $2.99/mn Btu, whereas the oil price – more in line with world markets – fell by 14% to $45.80/b. The higher gas price in Nigeria is part of a trend seen over the past two years.

CEO Austin Avuru said: “We expect the second half [2016] to see a resumption of exports via the Forcados terminal and concurrently a regular offtake schedule established via the Warri refinery jetty, which in turn will also help ensure gas sales into the domestic market are de-constrained.” Avuru owns or controls 13.15% of Seplat's shares.

Seplat said its Oben gas process facility Phase II expansion will add 225mn ft³/d capacity, taking its gross process capacity to at least 525mn ft³ by end-2016, with the new process modules having been delivered to Nigeria in June, ready for installation and commissioning by 4Q 2016.

Workers at one of Seplat's facilities (Photo credit: Seplat)

Maurel & Prom on July 27 issued its own 1H 2016 activity report, ahead of full 1H results on August 31. The Africa-focused producer said its net oil output, mainly in Gabon, grew by 22% to 21,169 b/d, while its gas produced and delivered (all in Tanzania) grew to 23.7mn ft3/d - from just 1.1mn ft³/d in 1H2015. That recent start-up Tanzanian gas from Mnazi Bay helped M&P's 1H 2016 net oil and gas production rise by 43% to 25,144 boe/d.

Smaller Africa-focused UK explorer Sterling Energy July 28 meanwhile reported a net 1H 2016 loss of $8.2mn, even larger than its $1.5mn loss in January-June 2015, as its net production declined by 40% to just 214 b/d, as output from the Malaysian state Petronas-operated Chinguetti oil field offshore Mauritania dwindled yet further, with cessation of production there scheduled for late 2016/early 2017. Sterling’s equity interest is 9%.

In Mauritania, Sterling says a Tullow-led joint venture is working to meet a well drilling commitment by November 2017 on block C-10, noting the relative proximity of US Kosmos’s world-class finds. In east Africa, Sterling (40%) and Genel plan to acquire 2D seismic data by early 2017 onshore Somaliland. In contrast, Sterling’s plans at its 100% shallow water Ntem 2,319km² block, offshore Cameroon, are frozen by a maritime dispute with Equatorial Guinea. The company also relinquished other acreage offshore Mauritania (shallow block C-3) and Madagascar in 1H 2016

Mark Smedley