BREAKING: Seplat Energy to sell 10% stake in joint venture to NNPC for $281m

Seplat Energy Plc has signed a binding agreement with the Nigerian National Petroleum Company Limited (NNPC Ltd) for the sale of a 10 per cent working interest in the assets held by their joint venture for a transaction value of approximately $281.6 million.

The energy company, listed on both the Nigerian Exchange and the London Stock Exchange, disclosed in a statement on Thursday that its subsidiaries, Seplat Energy Offshore Limited (SEOL) and Seplat Energy Producing Nigeria Unlimited (SEPNU), entered into a Heads of Agreement with NNPC Ltd for the transaction.

The deal involves the transfer of a 10 per cent interest in the NNPCL/SEPNU Joint Venture (JV), with completion subject to regulatory approvals and other customary conditions. The transaction is expected to be concluded in the second half of 2026, with an effective date of April 1, 2026.

Following completion, SEPNU will retain a 30 per cent working interest in the joint venture assets and remain the operator, while NNPC Ltd’s interest will increase from 60 per cent to 70 per cent.

Seplat Energy said it would continue to retain full ownership of SEPNU.

The company said proceeds from the transaction would be deployed in line with its capital allocation framework, with about 50 per cent earmarked for debt reduction and the remaining 50 per cent for enhancing shareholder returns.

As part of the plan, Seplat disclosed that approximately $140 million, equivalent to 23.3 US cents per share, would be paid to shareholders as a transaction dividend upon completion, in addition to the company’s underlying business performance dividend.

The company also said it had targeted repayment of up to $300 million in gross debt, noting that $200 million of its Advanced Payment Facility had already been repaid in the second quarter of 2026, while the remaining $100 million would be paid after completion of the transaction.

On production outlook, Seplat said the transaction would not affect the 2026 production targets of the NNPCL/SEPNU Joint Venture, adding that production performance had remained strong year-to-date.

However, it noted that SEPNU’s contribution to group production guidance would reduce from about 80,000 barrels of oil equivalent per day (kboepd) to approximately 65,000 kboepd, based on the transaction’s effective date.

The company said its 2030 production target would also be adjusted from 200,000 barrels of oil equivalent per day (net working interest) to 170,000 boepd, subject to completion of the deal.

Seplat added that the transaction proceeds and reduced capital expenditure requirements associated with the divested interest would largely offset the impact of the lower working interest in the joint venture assets.

The company maintained its commitment to distributing between 40 and 50 per cent of free cash flow to shareholders during the 2026–2030 cycle, with a target of returning at least $1 billion in cumulative shareholder distributions.

The transaction is expected to reduce Seplat Energy’s group 2P reserves by about 13 per cent to 872.9 million barrels of oil equivalent, based on the company’s latest reserves update.

Commenting on the agreement, Seplat Energy Chief Executive Officer, Roger Brown, described the NNPCL/SEPNU JV as one of Nigeria’s most important licence areas.

He said the partnership with NNPC remained strong, adding that increased development activities since Seplat became operator had improved production performance and created potential for further growth.

“Seplat Energy is on a strong financial footing, enabling us to use the proceeds of this disposal to enhance shareholder distributions and further reduce financial leverage, ultimately freeing up future cash flows for shareholders,” Brown said.