Seplat energy targets oil production boost through idle well revival

Seplat Energy Plc is positioning itself as a key player in Nigeria’s oil and gas industry with plans to revive hundreds of dormant oil wells, following its $1.28 billion acquisition of Exxon Mobil Corp’s onshore assets.

This strategic move aligns with Seplat’s ambition to double its production capacity and optimize Nigeria’s underutilized energy resources. Currently, only 200 of Seplat’s 600 oil wells are active, leaving significant room for growth.

Seplat’s Chief Operating Officer, Samson Ezugworie, stated , “Our immediate focus is rig intervention, short-term oil-generation activities, rejuvenating idle wells, and bringing them back to production. Only 200 of about 600 oil blocks are producing.”

The finalisation of the acquisition was made possible after approval from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October, solidifying Seplat’s position as a leader in both oil and gas production in the region.

Seplat has already paid $800 million of the agreed sum, with an initial $128 million paid when the deal was signed in 2022. The remaining $257.5 million has been deferred to December 2025 to accommodate decommissioning and joint venture costs.

Chief Financial Officer, Eleanor Adaralegbe highlighted the acquisition’s financial viability, noting that the deal pays for itself quickly, given Seplat’s rising earnings. “It’s just a little over half of the EBITDA for the full year, so it pays back itself very quickly,” she said, referring to the company’s 25 per cent increase in earnings to $383 million in the first nine months of 2023.

Seplat expects the deal to significantly enhance its asset base, consolidating 11 blocks of onshore and shallow water assets, 48 operational fields, five gas-processing facilities, and three export terminals. Chief Executive Officer, Roger Brown revealed plans to ramp up production from the current 71,000 barrels per day to over 200,000 barrels, underscoring the company’s commitment to unlocking Nigeria’s energy potential.

Beyond oil production, Seplat is eyeing expansion into the liquefied natural gas (LNG) market and the domestic gas sector. “In the portfolio, we have significant gas opportunities,” Brown noted.

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