Nigerian oil and gas company Seplat Petroleum has reported a loss of US$ 105.8mn in its unaudited Q1’20 result
The loss was mainly driven by a US$145.5mn impairment loss (vs. gain of US$.14.0mn in Q1’19) charged on its oil and gas assets during the period.
The company’s shares were 3.2 per cent lower at 51.40 pence in London. Revenue was 18 per cent lower at US$130.5mn, down from US$159.5mn.
The gross profit for the company also dropped from US$81.4mn in Q1 2019 to US$33.1mn is at the end of Q1 2020.
CEO Austin Avuru said, “Against the twin crises of significantly reduced oil demand and the price war, Seplat continues to demonstrate its resilience because of its ongoing philosophy of prudent financial management, the careful mitigation of risk and a keen focus on managing factors of the business that are within our control.
“We have the benefit of long-term contracted gas revenues that are insulated from oil market volatility. We are achieving substantial cost reductions from our suppliers and managing our own costs even more carefully in this unprecedented and challenging period.
“We are in constant dialogue with partners on monies owed and are pleased to report that our cash flow remains robust and we have significant cash in reserve. This, coupled with the majority of our debt repayment obligations extending beyond 2021, gives us confidence that we can continue to operate comfortably within the covenants on all lines of debt.”
To assist with the COVID-19 pandemic, Avuru added that the company has provided medical and food donations as part of its ongoing commitment to local and state communities and “We will continue to do whatever we can to support those upon whom we depend for our business. The challenges before us remain significant, but through our extensive scenario planning, we are confident that the resilience and discipline of our business will help us through this unprecedented time and strengthen our position as Nigeria’s leading independent oil and gas producer.”