Seplat Petroleum Development Company Plc, a leading Nigerian indigenous oil and gas company dual-listed on the Nigerian Stock Exchange and London Stock Exchange, today announces the completion of the transfer of the business activities and assets of OMLs 4, 38 and 41 from the Holding Company to its wholly-owned Subsidiary Seplat West Limited.
Following regulatory and partner approvals, the transfer is effective January 1, 2020.
This Intra-Group transfer has been planned for some time and will not result in any change to the current business strategy for any of the assets nor will it affect the way in which the company’s Group commercially operates.
Therefore, the operatorship of the asset remains with the oil and gas company under the Joint Operating Agreement (“JOA”), as the transfer to an affiliate of Seplat under the terms of the JOA is permitted.
The rationale for the transfer of assets
The transfer of OMLs 4, 38 and 41 out of Seplat Plc into Seplat West results in seven (7) wholly-owned subsidiaries – Newton Energy Limited; Seplat Petroleum Development Company UK Limited; Seplat East Onshore Limited; Seplat East Swamp Company Limited; Seplat Gas Company Limited; Eland Oil and Gas Limited and Seplat West Limited, with no operating oil and gas assets directly held in the Holding Company.
The new structure of the Group is consistent with Seplat’s efforts to simplify its structure and designed towards segregating the businesses of the Group in a more efficient manner thereby reducing risk, cost and complexity.
This is also expected to result in simplified management and reporting framework for the company’s Group.
The outcome of the transfer will not, in any way, result in loss of tax revenue to the Government or extinguishment of liabilities.
Similarly, it will not diminish shareholder value in (and returns from) Seplat as a listed company.
Following discussions with the credit rating agencies, the transfer is not expected to impact the ratings of the Group.
This announcement is made in compliance with Rule 17.6 of the NSE Issuers Rule.