By Ikenna Omeje
Seplat Petroleum Development Company has announced the completion of transfer of the business activities and assets of Oil Mining Leases (OMLs) 4, 38 and 41 from the Holding Company to its wholly owned Subsidiary, Seplat West Limited, for operational efficiency.
In a notification to the Nigerian Stock Exchange (NSE) on Thursday, the company stated that the announcement is made in compliance with Rule 17.6 of the NSE Issuers Rule.
“This Intra-Group transfer has been planned for some time and will not result in any change to the current business strategy for any of the assets nor will it affect the way in which the Seplat Group commercially operates. Therefore, the operatorship of the asset remains with Seplat under the Joint Operating Agreement (“JOA”), as the transfer to an affiliate of Seplat under the terms of the JOA is permitted,” Seplat said.
Explaining the rationale for transfer of the assets, the company said, “The transfer of OMLs 4, 38 and 41 out of Seplat Plc. into Seplat West results in seven (7) wholly owned subsidiaries – Newton Energy Limited; Seplat Petroleum Development Company UK Limited; Seplat East Onshore Limited; Seplat East Swamp Company Limited; Seplat Gas Company Limited; Eland Oil and Gas Limited and Seplat West Limited, with no operating oil and gas assets directly held in the Holding Company.
“The new structure of the Seplat Group is consistent with Seplat’s efforts to simplify its structure and designed towards segregating the businesses of the Group in a more efficient manner thereby reducing risk, cost and complexity. This is also expected to result in a simplified management and reporting framework for the Seplat Group.”
“The outcome of the transfer will not, in anyway, result in loss of tax revenue to the Government or an extinguishment of liabilities. Similarly, it will not diminish shareholder value in (and returns from) Seplat as a listed company,” it assured.
The transfer, which is effective from January 1, 2020, following regulatory and partner approvals, is not expected to impact the ratings of the Group.
Seplat Petroleum Development Company Plc. is a leading Nigerian indigenous oil and gas company listed both on the Nigerian Stock Exchange and London Stock Exchange.