SEPLAT Petroleum Development Company’s shares will begin trading, today, April 14, 2014, on the Official Trading list of the Nigerian Stock Exchange (NSE) while the company’s chairman, Dr. ABC Orjiako will ring the closing bell to signal the end of its first trading day. The company’s shares will also begin unconditional trading on the London Stock Exchange (LSE) today.
The dual listing of the company’s shares on the NSE and LSE follows the successful completion of its IPO which was well over-subscribed. SEPLAT, which announced its intention to float on Tuesday March 11, 2014 had sought to raise $500m and then listing on the NSE and LSE.
On Thursday March 28, 2014, the company announced that the indicative price range for its initial public offer had been set at N535 to N700 per ordinary share for shares to be listed on the official trading list of the NSE and 195 pence to 255 pence per ordinary share for shares to be traded on the LSE’s main market.
The offer comprised a base offering and an over-allotment option. The base offer sought to raise gross proceeds of around $500 million, equivalent to 300.9 million pounds and NGN 82.5 billion.
The over-allotment option, the company said, would represent 15 percent of the final amount allocated to the international offering in the base offer.
Facts and figures that have emerged following the successful completion of the book building exercise indicate that the SEPLAT offer was hugely successful and massively over-subscribed.
On Wednesday April 9, 2014, the company announced that its Offer Price had been set at NGN 576 per Ordinary Share for shares to be listed on the Official Trading List of the NSE (the “Offer Price”) and 210 pence per Ordinary Share for shares to be traded on the LSE’s main market.
Based on the Offer Price, the total market capitalisation of SEPLAT at the commencement of conditional dealings will be approximately £1.14 billion (equivalent to US$1.90 billion or N3.13bn) (excluding the exercise of the over-allotment option).
The Base Offer raised gross proceeds of approximately £300.9 million (equivalent to US$500 million) while the Over-allotment Option shall consist of 10,336,183 new shares representing 15% of the final amount allocated to investors outside of Nigeria (the “International Offering”) in the Base Offer. The Over-allotment Option can be exercised for a period of 30 calendar days from April 9, 2014.
With its IPO success, SEPLAT has not just become the herald of a new era in the Nigerian Exploration & Production field; it will enjoy a string of advantages, especially, a significant reduction in its debt to equity ratio because according to the prospectus “The Company intends to use the net proceeds of the Global Offer as follows: (i) US$48 million to repay in full all outstanding amounts under its shareholder loan from MPI S.A. (“MPI”);”
Reacting to the Development, Dr. ABC Orjiako, Chairman of SEPLAT said “We are delighted with the support shown and happy to welcome a range of blue chip investors to our share register. Despite a challenging market for oil and gas stocks, the response has been excellent and demonstrates strong demand in both London and at home for leading Nigerian indigenous E&P players” while the CEO, Austin Avuru added that “We are already a leading indigenous independent in our home market but the opportunities opening up in Nigeria for companies like ours are significant.”
As the company stated in its intention to float announcement, the net proceeds of the Global Offer will primarily be used to acquire and develop new acquisitions, and/or pay down any additional debt raised in connection therewith, of both onshore and shallow offshore acreages, assets and joint venture farm-ins. Approximately US$48 million shall be used to pay down, in full, a shareholder loan from MPI S.A.
All these would help SEPLAT realize its growth objectives as indicated in the prospectus:
- “Maximise production, reserves and cash flows from operated assets
- Pursue a focused acquisition and farm-in strategy
- Commercialize gas production
The full Admission of the Ordinary Shares to the Official Trading List of the NSE, under the ticker symbol “SEPLAT” and to the Official List of the Financial Conduct Authority (FCA) as well as to trading on the main market for listed securities of the LSE under the ticker symbol “SEPL” and the commencement of unconditional dealings are expected to take place today, Monday 14 April 2014.
SEPLAT was founded in 2009 by Shebah Petroleum Development Company Limited and Platform Petroleum (Joint Ventures) Limited for the purpose of investing in Nigerian oil and gas opportunities. Maurel & Prom, a French independent oil company, subsequently acquired a 45 per cent equity interest in SEPLAT; this interest was later spun-off to form Maurel & Prom Nigeria S.A (now Maurel & Prom International).
In July 2010, SEPLAT acquired a 45 per cent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil mining leases (OMLs 4, 38 and 41) located in the Niger Delta.
In June 2013, the Company entered into an agreement for the acquisition of a 40 per cent participating interest in the Umuseti/Igbuku marginal field area located within OPL 283 in the Niger Delta. SEPLAT is one of the leading indigenous oil and gas operators in Nigeria with average gross operated oil production of 51,400 barrels per day (“bpd”) as at 31 December 2013 having grown from 13,900bpd in August 2010.
The Company’s average gross gas production in 2013 was 99 million standard cubic feet per day (“MMscfd”). SEPLAT is targeting gross operated oil production from its existing assets of 85 Mbpd by the end of 2016.
SEPLAT’s successful IPO and dual listing on the LSE and NSE clearly signposts a new era in the Nigerian E&P market and sets SEPLAT apart as a veritable national champion.