Nigerian oil company Seplat Petroleum Development posted a fall in profits during the first half of the year on the back of lower revenue.
The company posted an after tax profit of nearly $166 million for the six months to 30 June, down from a profit of almost $303.3 million during the same period last year.
Seplat attributed the decline to deferred tax liabilities of $92.7 million in the first half of 2013 and lower revenue over the first half of 2014.
The company generated $388.2 million during the first half of the year, down 7% on the $419.4 million in revenue it generated over the same period a year earlier.
This came as revenue from crude sales fell 8%, to $378.6 million, which Seplat blamed on 45 days of unplanned downtime of the Trans Forcados system.
This was partially offset by a 54% increase in gas revenue during the first half of the year, to $9.6 million, mainly due to increased production from work-over wells and finalisation of the upgrade works on the Oben gas plant and higher offtake from the Sapele gas plant.
The increase in gas production helped ensure overall output during the first half of 2014 averaged about 27,375 barrels of oil equivalent per day, up from 27,183 boepd during the first half of 2013.
“Although production in the period was impacted by the shutdown of third party infrastructure, we continue to drive growth - excluding the shut-in days, our gross daily average production from OMLs 4, 38 and 41 was over 60,000 barrels,” Seplat chief executive Austin Avuru said.
“We plan to have up to seven drilling rigs actively engaged, and are progressing plans at a fast pace to develop our oil and gas reserves and increase production, aiming to build momentum through the second half and into 2015.”
Also hitting the company’s bottom line during the first half of 2014 was a rise in general and administration expenses, which totalled $83.4 million, up from $28.9 million a year ago.
Seplat attributed the increase to commitment and arrangement fees paid to banks for a new loan facility, higher staff costs, as well as a regulatory payment of $14 million, costs related to accounting and procurement system changes and new business development costs for evaluating the prospects of new ventures.
The company also booked an increase in finance costs, from $10.7 million to $21.6 million, due to the drawdown of the remaining $215 million of its $550 million loan and an additional new loan of $200 million.
Seplat forecasts full year average working interest production to be between 29,000 and 33,000 boepd and said it was on target to achieve a liquids exit rate from OMLs 4, 38, 41 of 72,500 bpd gross.