Seplat Energy Plc has confirmed the release of its prospectus for the acquisition of Mobil Producing Nigeria Unlimited (MPNU), a deal set to redefine the company’s position in Nigeria’s energy sector. Following federal government approval in October 2024, the long-awaited transaction is expected to close on December 12, 2024.
This acquisition marks a transformative milestone for Seplat, significantly boosting its production capacity and expanding its portfolio of high-value assets. According to Seplat’s Chief Executive Officer, Roger Brown, the deal will more than double the company’s production to approximately 120,000 barrels of oil equivalent per day, cementing its status as a key player in Nigeria’s energy landscape.
The MPNU acquisition includes a diverse portfolio of assets, adding equity in 11 oil blocks, 48 producing fields, five gas processing facilities, and three export terminals. With the integration of these assets, Seplat’s 2P reserves will increase by 86% to 887 million barrels of oil equivalent (MMboe), while production is projected to rise by 148%. The company also stands to gain access to lucrative multi-Tcf gas projects and opportunities for short-term production gains through in-fill drilling.
Seplat’s financial outlook is equally impressive, with the acquisition expected to boost annual revenues by 245% to $1.456 billion and nearly double adjusted EBITDA to $800 million. The transaction, valued at $800 million, will be funded through credit facilities and cash reserves, with no new equity issuance required. The payment includes $672 million due at closing, $128 million already deposited, and $257.5 million deferred until December 2025 to cover decommissioning and joint venture costs.
The acquisition represents a significant operational expansion for Seplat, as it transitions approximately 1,000 staff and 500 contractors from MPNU to its workforce. This move underscores the company’s commitment to integrating world-class talent to enhance operational efficiency and drive long-term growth.
The road to finalizing the MPNU acquisition has not been without challenges. Originally announced in February 2022, the transaction faced regulatory and legal hurdles, including opposition from the Nigerian National Petroleum Corporation (NNPC), which exercised its Right of First Refusal under the Joint Operating Agreement. Government approvals were initially withheld, and a court injunction stalled progress. However, in 2024, these obstacles were resolved when NNPC withdrew its legal challenge, and the federal government gave the green light under the Petroleum Industry Act (PIA).
This acquisition is not just a financial milestone but also a testament to Seplat Energy’s resilience and strategic vision. By integrating MPNU’s assets, Seplat is poised to drive substantial growth, contribute meaningfully to Nigeria’s economy, and strengthen its leadership in the energy sector. The company’s shares are also set to be readmitted to the UK Financial Conduct Authority’s Official List on December 13, 2024, signaling its readiness for an exciting new chapter of growth and innovation.
As Seplat Energy closes this transformative chapter, it reaffirms its commitment to delivering value to stakeholders while shaping the future of Nigeria’s oil and gas industry.
