LSE:SEPL

Stock Analysis Report

Seplat Petroleum Development

Executive Summary

Seplat Petroleum Development Company Plc, an oil and gas company, explores for, develops, and produces oil and gas in Nigeria.


Snowflake Analysis

Very undervalued with flawless balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Seplat Petroleum Development's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SEPL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.1%

SEPL

-0.5%

GB Oil and Gas

1.4%

GB Market


1 Year Return

-12.1%

SEPL

4.6%

GB Oil and Gas

12.4%

GB Market

Return vs Industry: SEPL underperformed the UK Oil and Gas industry which returned 4.5% over the past year.

Return vs Market: SEPL underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

SEPLIndustryMarket
7 Day-4.1%-0.5%1.4%
30 Day1.3%3.3%2.0%
90 Day0%4.7%8.8%
1 Year-6.5%-12.1%9.8%4.6%18.3%12.4%
3 Year86.6%61.7%27.7%11.2%23.8%8.0%
5 Year21.6%-5.7%61.7%29.9%41.8%8.9%

Price Volatility Vs. Market

How volatile is Seplat Petroleum Development's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Seplat Petroleum Development undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SEPL (£1.25) is trading below our estimate of fair value (£4.24)

Significantly Below Fair Value: SEPL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SEPL is good value based on its PE Ratio (3.9x) compared to the Oil and Gas industry average (7.6x).

PE vs Market: SEPL is good value based on its PE Ratio (3.9x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: SEPL is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: SEPL is good value based on its PB Ratio (0.5x) compared to the GB Oil and Gas industry average (0.7x).


Next Steps

Future Growth

How is Seplat Petroleum Development forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

15.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SEPL's forecast earnings growth (15% per year) is above the savings rate (0.5%).

Earnings vs Market: SEPL's earnings (15% per year) are forecast to grow faster than the UK market (11.7% per year).

High Growth Earnings: SEPL's earnings are forecast to grow, but not significantly.

Revenue vs Market: SEPL's revenue (17.5% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: SEPL's revenue (17.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SEPL's Return on Equity is forecast to be low in 3 years time (16.1%).


Next Steps

Past Performance

How has Seplat Petroleum Development performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SEPL has high quality earnings.

Growing Profit Margin: SEPL's current net profit margins (35.1%) are lower than last year (48.8%).


Past Earnings Growth Analysis

Earnings Trend: SEPL's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: SEPL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SEPL had negative earnings growth (-34.6%) over the past year, making it difficult to compare to the Oil and Gas industry average (24.4%).


Return on Equity

High ROE: SEPL's Return on Equity (13.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Seplat Petroleum Development's financial position?


Financial Position Analysis

Short Term Liabilities: SEPL's short term assets ($756.1M) exceed its short term liabilities ($292.3M).

Long Term Liabilities: SEPL's short term assets ($756.1M) exceed its long term liabilities ($482.9M).


Debt to Equity History and Analysis

Debt Level: SEPL's debt to equity ratio (20.2%) is considered satisfactory.

Reducing Debt: SEPL's debt to equity ratio has reduced from 41.5% to 20.2% over the past 5 years.

Debt Coverage: SEPL's debt is well covered by operating cash flow (118.2%).

Interest Coverage: SEPL's interest payments on its debt are well covered by EBIT (19.7x coverage).


Balance Sheet

Inventory Level: SEPL has a high level of physical assets or inventory.

Debt Coverage by Assets: SEPL's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

What is Seplat Petroleum Development's current dividend yield, its reliability and sustainability?

6.62%

Current Dividend Yield


Dividend Yield vs Market

company6.6%marketbottom25%1.8%markettop25%5.0%industryaverage5.2%forecastin3Years6.9%

Current dividend yield vs market & industry

Notable Dividend: SEPL's dividend (6.15%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: SEPL's dividend (6.15%) is in the top 25% of dividend payers in the UK market (4.95%)


Stability and Growth of Payments

Stable Dividend: SEPL has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SEPL has only been paying a dividend for 5 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12%), SEPL's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SEPL's dividends in 3 years are forecast to be well covered by earnings (20.1% payout ratio).


Next Steps

Management

What is the CEO of Seplat Petroleum Development's salary, the management and board of directors tenure and is there insider trading?

6.5yrs

Average management tenure


CEO

Austin Avuru (60yo)

9.7yrs

Tenure

US$2,992,000

Compensation

Mr. Ojunekwu Augustine Avuru also known as Austin, has been the Chief Executive Officer of Seplat Petroleum Development Company Plc since May 1, 2010 and serves as its Managing Director. Mr. Avuru is an o ...


CEO Compensation Analysis

Compensation vs Market: Austin's total compensation ($USD0.00) is below average for companies of similar size in the UK market ($USD1.13M).

Compensation vs Earnings: Austin's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.5yrs

Average Tenure

57.5yo

Average Age

Experienced Management: SEPL's management team is seasoned and experienced (6.5 years average tenure).


Board Age and Tenure

6.8yrs

Average Tenure

60yo

Average Age

Experienced Board: SEPL's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Edith Onwuchekwa

    Company Secretary and Chief Governance & Compliance Officer

    • Tenure: 0.6yrs
  • Austin Avuru (60yo)

    CEO, MD & Executive Director

    • Tenure: 9.7yrs
    • Compensation: US$2.99m
  • Chioma Nwachuku (55yo)

    General Manager of External Affairs & Communications

    • Roger Brown (49yo)

      CFO & Executive Director

      • Tenure: 6.5yrs
      • Compensation: US$1.59m
    • Isaiah Odeleye (68yo)

      General Manager of Legal

      • Olubusola Ogunbanwo (58yo)

        Head of Asset Development

        • Tenure: 7.5yrs
      • Jonah Amedu (57yo)

        Head of Petroleum Engineering

        • Mirian Kachikwu

          General Counsel

          • Andrew Dymond

            Head of Investor Relations

            • Effiong Okon

              Operations Director & Director

              • Tenure: 2yrs

            Board Members

            • Mike Alexander (71yo)

              Senior Independent Non-Executive Director

              • Tenure: 6.6yrs
              • Compensation: US$438.00k
            • Basil Omiyi

              Independent Non-Executive Director

              • Tenure: 6.8yrs
              • Compensation: US$234.00k
            • George Malloch-Brown (66yo)

              Independent Non-Executive Director

              • Tenure: 6yrs
              • Compensation: US$207.00k
            • Michel Hochard (69yo)

              Non-Executive Director

              • Tenure: 10.1yrs
              • Compensation: US$140.00k
            • Ambrosie Bryant Orjiako (57yo)

              Chairman

              • Tenure: 9.8yrs
              • Compensation: US$1.01m
            • Charles Okeahalam (56yo)

              Independent Non-Executive Director

              • Tenure: 6.8yrs
              • Compensation: US$221.00k
            • Austin Avuru (60yo)

              CEO, MD & Executive Director

              • Tenure: 9.7yrs
              • Compensation: US$2.99m
            • Ifueko Omoigui-Okauru

              Independent Non-Executive Director

              • Tenure: 6.8yrs
              • Compensation: US$228.00k
            • Roger Brown (49yo)

              CFO & Executive Director

              • Tenure: 6.5yrs
              • Compensation: US$1.59m
            • Effiong Okon

              Operations Director & Director

              • Tenure: 2yrs

            Company Information

            Seplat Petroleum Development Company Plc's company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: Seplat Petroleum Development Company Plc
            • Ticker: SEPL
            • Exchange: LSE
            • Founded: 2009
            • Industry: Oil and Gas Exploration and Production
            • Sector: Energy
            • Market Cap: UK£659.779m
            • Shares outstanding: 568.78m
            • Website: https://seplatpetroleum.com

            Number of Employees


            Location

            • Seplat Petroleum Development Company Plc
            • 16A Temple Road
            • Ikoyi
            • Lagos
            • Nigeria

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            SEPLLSE (London Stock Exchange)YesOrdinary SharesGBGBPApr 2014
            SEPLATNGSE (Nigerian Stock Exchange)YesOrdinary SharesNGNGNApr 2014
            134DB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2014
            SEPLLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPApr 2014

            Biography

            Seplat Petroleum Development Company Plc, an oil and gas company, explores for, develops, and produces oil and gas in Nigeria. It operates a portfolio of assets in the Niger Delta region, including a 45% interest in the OML 4 that covers an area of 267 square kilometers; a 45% interest in OML 38 that covers an area of 2,094 square kilometers; and a 45% interest in OML 41 that covers an area of 291 square kilometers. The company also holds a 40% non-operated working interest in OPL 283 marginal field area and is located in the northern onshore depo-belt of the Niger Delta; a 40% in OML 53 that covers an area of 1,585 square kilometers and is located onshore in the north eastern Niger Delta; and interest in OML 55 that covers an area of 840 square kilometers and is located in the south eastern Niger Delta. Seplat Petroleum Development Company Plc was founded in 2009 and is based in Lagos, Nigeria. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/18 21:35
            End of Day Share Price2020/01/17 00:00
            Earnings2019/09/30
            Annual Earnings2018/12/31


            Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.