Seplat Energy Plc, a leading Nigerian energy company, is set to finalize its $800 million acquisition of Mobil Producing Nigeria Unlimited (MPNU) on December 12, 2024.
According to a statement signed by Seplat’s Chief Executive Officer, Roger Brown, the transaction represents a significant milestone in the company’s expansion within Nigeria’s energy sector.
The acquisition involves a final cash payment of $672 million to ExxonMobil upon closing, with an initial $128 million deposit paid in 2022. An additional $257.5 million is deferred until December 2025 to cover decommissioning, abandonment, and joint venture-related costs.
Seplat outlined its funding strategy for the $672 million payment, which includes $350 million drawn from a revolving credit facility, $300 million advanced by ExxonMobil under a three-year payment facility, and $22 million from Seplat’s cash reserves.
“This acquisition will be funded through a mix of credit facilities, advance payments, and our balance sheet cash,” the company stated.
The acquisition will significantly enhance Seplat’s production capacity, increasing it to approximately 120,000 barrels of oil equivalent per day (kboepd), more than double its current output. Proven and probable (2P) reserves will grow by 86% to 887 million barrels of oil equivalent (MMboe), while combined 2P and 2C reserves are set to rise by 124% to 1,210 MMboe.
Key assets acquired include a 40% operated interest in Oil Mining Leases (OMLs 67, 68, 70, and 104) and the Qua Iboe export terminal. The deal will also integrate roughly 1,000 staff and 500 contractors from MPNU into Seplat’s workforce.
The acquisition is projected to significantly improve Seplat’s financial performance. On a pro forma basis for the first half of 2024, revenue is expected to rise by 245% to $1.46 billion, compared to $422 million as a standalone entity. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are anticipated to grow by 199% to $800 million.
With combined production averaging 119.8 kboepd in the first half of 2024—a 148% increase from its standalone figure of 48.4 kboepd—Seplat is well-positioned to address rising energy demands both domestically and internationally.
Classified as a reverse takeover under UK Financial Conduct Authority rules, the acquisition will require the relisting of Seplat Energy’s shares. Upon completion, the company plans to host a post-acquisition conference call with investors and analysts.
Meanwhile, legal developments continue to unfold. The Nigerian National Petroleum Company Limited (NNPCL) recently filed a motion at the High Court of the Federal Capital Territory, Abuja, seeking to discontinue its ongoing legal actions against MPNU subsidiaries and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
This acquisition underscores Seplat Energy’s strategic ambition to scale its operations and secure a stronger foothold in the global energy market.
