Seplat Energy Closes $800m Purchase Of ExxonMobil’s Assets

Seplat Energy Plc, a leading Nigerian energy company listed on the Nigerian Exchange and the London Stock Exchange, has announced the completion of its $800 million acquisition of ExxonMobil’s Nigerian subsidiary, Mobil Producing Nigeria Unlimited (MPNU).

The deal, initially valued at $1.28 billion when first signed in February 2022, was finalised after regulatory approvals, marking a significant milestone in Nigeria’s energy sector.

The acquisition, expected to be officially concluded on December 12, 2024, includes key assets that will more than double Seplat Energy’s crude oil production capacity to 120,000 barrels per day. This monumental transaction secures Seplat’s position as a leading independent energy company in Nigeria and significantly enhances its asset base and operational capabilities.

Mr. Roger Brown, Chief Executive Officer (CEO) of Seplat Energy, described the acquisition as transformative, highlighting its potential to accelerate the company’s growth and profitability. The deal also highlights Seplat’s commitment to contributing to Nigeria’s economy by optimising resources in one of the world’s most prolific hydrocarbon regions.

The final consideration of $800 million reflects adjustments for regulatory consent fees, decommissioning costs, and a locked-box mechanism effective from January 1, 2021. Of this amount, $128 million had already been paid as a deposit in 2022. The remaining payment will be financed through a combination of a $350 million Revolving Credit Facility, a $300 million Advance Payment Facility with ExxonMobil, and $22 million in cash reserves.

Through this acquisition, Seplat Energy gains a 40 percent operated interest in Oil Mining Leases (OMLs) 67, 68, 70, and 104, as well as stakes in the Qua Iboe export terminal, the Yoho Floating Storage and Offloading unit, and the Bonny River Terminal. The company now boasts equity in 11 oil blocks, 48 producing oil and gas fields, five gas processing facilities, and three export terminals.

The transaction is expected to generate significant financial benefits, with Seplat projecting a 245 percent increase in pro-forma revenue to $1.456 billion and a 199 percent rise in adjusted EBITDA to $800 million as of the first half of 2024. Reserves have also seen a significant boost, with pro-forma 2P reserves increasing to 887 million barrels of oil equivalent (MMboe), an 86 percent rise. Combined 2P and 2C resources now stand at 1.21 billion barrels, reflecting a 124 percent increase.

Seplat’s acquisition also includes the integration of approximately 1,000 staff and 500 contractors into its operations, further enhancing its workforce capabilities.

First signed in February 2022, the deal faced delays due to regulatory processes but ultimately received the necessary approvals from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Financial Conduct Authority (FCA) in the United Kingdom. This successful conclusion demonstrates the growing capacity of indigenous companies to execute large-scale acquisitions in the oil and gas industry, reinforcing Nigeria’s ambitions to promote local participation in the energy sector.

In securing these high-quality assets, Seplat Energy has positioned itself to drive sustainable development and create long-term value for its shareholders, employees, and stakeholders. The company’s strategic expansion promises to enhance Nigeria’s energy output and contribute meaningfully to the nation’s economic growth.