Seplat Energy Plc has announced plans to revive hundreds of dormant Nigerian oil wells after successfully acquiring ExxonMobil’s onshore oil and gas assets in the country.
According to a report by Bloomberg on Friday, the company aims to rejuvenate idle wells to boost production, as only 200 of its 600 oil wells are currently operational.
“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,” said Chief Operating Officer Samson Ezugworie during an interview.
The announcement follows the completion of Seplat’s $1.28 billion acquisition of Mobil Producing Nigeria Unlimited from ExxonMobil. The transaction was finalized after the Nigerian Upstream Petroleum Regulatory Commission approved the deal in October.
Seplat capitalized on a trend of international oil companies divesting from Nigeria, Africa’s largest oil producer. The company has already paid $800 million of the purchase price, following an initial $128 million deposit made when the deal was signed in 2022. The remaining $257.5 million will be deferred until December 2025 to cover decommissioning, abandonment, and joint venture costs, the company disclosed.
Chief Financial Officer Eleanor Adaralegbe described the acquisition as a financially sound decision. “It’s just a little over half of the EBITDA for the full year, so it pays back itself very quickly,” she said. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 25 percent to $383 million for the first nine months of 2024 compared to the same period last year.
Seplat, which is listed in both Lagos and London, views the acquisition as a game-changer. The deal doubles its production capacity, expands its assets to 11 blocks in onshore and shallow waters of Nigeria, and increases its portfolio to 48 producing oil and gas fields, five gas-processing facilities, and three export terminals.
The company aims to increase production to over 200,000 barrels per day from the current output of approximately 71,000 barrels of oil equivalent daily, according to Chief Executive Officer Roger Brown. However, he did not specify the timeline for achieving this target.
“In the portfolio, we have significant gas opportunities,” Brown added. “There is a huge opportunity in LNG and the domestic gas space.”
