Seplat Energy Plc (SEPL) Earnings Call Transcript & Summary

Good morning, distinguished shareholders, ladies and gentlemen, and welcome to the Tenth Annual General Meeting of Seplat Energy Plc. Based on information provided by the registrars and confirmed by the Company Secretary, there is quorum for this Annual General Meeting, and I hereby declare the meeting open. Before we commence the meeting, I would like to call for the national anthem. [Presentation]

May I kindly call on a shareholder, Mr. [ Al Adiu ] to lead us in opening prayer? Okay. [ Adiu ] is not there. [ Patrick Ajudra ] is going to lead us in an opening prayer. Okay. Adiu is not there. [ Patrick Ajudra ] is going to lead us in an opening prayer.

[Presentation]

Thank you, Mr. [indiscernible]. Distinguished shareholders, this meeting is being held virtually in compliance with the Business Facilitation (Miscellaneous Provision) Act that was passed into law on the 8th of February 2023. This act is aimed at promoting the ease of doing business, enhancing productivity and ensuring transparency in Nigeria. So between level of the Business Facilitation Miscellaneous Act 2022, amended Section 242 of the Companies and Allied Matters Act, 2020, which empowers public companies to hold their annual general meeting electronically. Therefore, in compliance with the amended provision of the law, this meeting is being held virtually with link published in the Notice of the Meeting and on the company's website. Also note that this AGM is being streamed live and can be viewed by all in real time. We'd like to assure all our distinguished shareholders that the precedence of this meeting will be conducted in a timely manner. I would also like to note that a letter detailed on the 9th of May 2023 was sent to us by Corporate Affairs Commission as presence on reservations. But we know that we have the judgment to authorize this AGM, so the AGM is being held accorded into law. Accordingly, our lawyers have advised that we'll proceed with the meeting, which is a statutory obligation. And outside the meeting, all legal steps will be followed by CSC -- with CSC to recognize and file the outcome of the AGM. Thank you. At this point, let me proceed by introducing members of the Seplat Energy Plc Board as follows: Mr. Samson Ezugworie, acting Chief Executive Officer and Chief Operating Officer; Mr. Roger Brown, Executive Director; Mr. Emeka Onwuka, Chief Financial Officer; Mr. Olivier de Langavant, non-Executive Director; Mr. Ernest Ebi, non-Executive Director; Mr. Kazeem Raimi, non-Executive Director; Madame Nathalie Delapalme, Non-Executive Director; Dr. Charles Okeahalam, Senior Independent, Non-Executive Director; Dr. Emma FitzGerald, Independent Non-Executive Director; Mr. Bello Rabiu, Independent Non-Executive Director; Mrs. Bashirat Odunewu, Independent Non-Executive Director; Ms. Koosum Kalyan, Independent Non-Executive Director; and of course, myself, Basil Omiyi, Independent Non-Executive Chairman. I would also like to introduce the Company Secretary, Mrs. Edith Onwuchekwa. We have represented to you from the following regulators and professional bodies with us online. The Security and Exchange Commission, SEC; the Nigerian Exchange Limited. We also have Mr. Pedro Omontuemhen from PwC as general auditors. And our registrar, DataMax Registrars Limited, our Nigerian registrar, and Computershare Investment Services Plc (sic) [ Computershare Investor Services PLC ], our U.K. registrar. In our midst, we have members of the Statutory Audit Committee for the year 2022 as follows: Chief Anthony Idigbe, SAN, who is a shareholder representative and a Committee Chairman; Sir Sunday Nwosu, shareholder representative; Mrs. Hauwa Umar, also a shareholder representative; Mrs. Bashirat Odenewu, Board representative; Mr. Oliver de Langavant, Board representative. Dear shareholders, to facilitate the smooth and effective conduct of this meeting, which is being streamed live, we appeal to everyone to please observe the following rules. If you wish to speak, please indicate by clicking on the Raise your Hand icon. When called upon to speak, please state your first name and surname before you make comments. Kindly keep your comments and questions brief so as to ensure that others are given a fair opportunity to also participate. If you encounter any issue during this meeting, please click on the chat box and our representative will be on hand to assist you. The Registrar of Directors shareholding and record of attendance as well as annual reports are available in the company's website. Please note that there will be an opportunity to second each resolution put to the meeting. I will now call on the Company Secretary to read the Notice of the Meeting.

Thank you, Mr. Chairman. Dear ladies and gentlemen, the Notice of this Meeting is on Page 258 of the 2022 annual report and is accompanied by the list of proclaimed dividends. The notice was published in two national dailies, Vanguard newspaper and Business Day newspaper, both dated 13th April 2023, in accordance with Section 246 of the Companies and Allied Matters Act 2020. With the permission and approval of the Chairman, the notice is hereby taken as read. Thank you very much.

Permission granted and the Notice of the Meeting is taken as read. Thank you, Ms. Onwuchekwa. In line with Section 248 of the Companies and Allied Matters Act 2020, the resolutions for this meeting will be taken by poll, except for the resolution for the election of members of the Statutory Audit Committee, which shall be converted electronically reflecting show of hands. Proxy forms duly submitted to the registrars prior to this meeting have been collected by the registrars, indicating that some shareholders have already voted on the resolutions. I will now invite the registrar to explain the voting process.

Thank you, Mr. Chairman. Distinguished shareholders, I'll proceed to explain the process for voting -- for casting your votes. We have put together a short video explaining the process. [Presentation]

Prior to this meeting, we received a total of 247 proxies, with a total of 349,330,000 units of shares representing 59% of the company's issued shares. Today, the results we collated using proxy votes in addition to the votes of our online shareholders to arrive at the total votes. Accidents from voting will not be collated for reporting. For shareholders using their desktop or laptop, please follow these 3 steps: click resolution to commence voting, select your voting option, submit your vote. While shareholders using their mobile device should please follow this 4 easy steps: click on the menu bar on the right-hand panel of the screen, click resolution to commence voting, select your voting option, submit your vote. Please note that you can change your vote, but once the resolution session has ended, your last option will be taken as your cast vote. If you have difficulties voting, kindly refresh your screen and try again. Also, kindly note that resolutions on Statutory Audit Committee will be conducted electronically in the same manner as stated above. However, results will be announced by count of shareholders replicating show of hands. We shall commence the voting on the resolutions once we have Chairman's direction. And the voting period shall last for 1 minute for each resolution. Thank you.

Thank you very much. It is now time to read the Chairman's Statement. Distinguished shareholders, the statement is on Page 12 of the 2022 Annual Report, copies of which have been circulated to all. With your permission, I hereby consider the Chairman's statement as read. In addition to my statement, I would like to make a few comments. Shareholders are aware of the appropriate announcements made by the company dated the 9th, the 10th of May 2023, this is the 28th April 2023 relating to the actions taken by certain shareholders who brought false allegations and repeated petitions against Mr. Roger Brown and some selected members of the Board, a result of which there are many -- a few cases pending in court. These shareholders and their related parties have also brought the same false allegations through petitions before courts and a number of federal government ministries and agencies. The company maintains that these allegations are false and are orchestrated to destabilize the company and the Board and the entire staff from delivering on the company's strategic goals and values. The company maintains that these actions have been orchestrated as a result of the company's implementation of strong corporate governance by the Board. The companies are engaging with the Ministry of Interior to bring closure to these issues and the issues by the shareholders, and we hope that we will get a favorable response from the Ministry. Because these matters are before the court and are therefore sub judice, I would not like to speak more on them at this time. Ladies and gentlemen, we now proceed to the first item on the agenda, which is to receive the company's 2022 annual reports and accounts, directors' reports, auditors' report for the year ended 31st December 2022 and the Audit Committee's report. The company's 2022 annual report on accounts, including the directors' reports, have been circulated to all of you ahead of this meeting. I hereby lay this report before this meeting, together with the report of directors, auditors and Statutory Audit Committee. Will a shareholder kindly receive the report on behalf of the meeting? I can see [indiscernible]. Can you unmute?

Yes, sir. I'm on the line, sir.

I thought you were -- you have indicated you raise your hand to receive the reports -- a shareholder to receive the reports on behalf of the meeting?

Yes, sir.

Okay. So you've received the report?

Yes, sir.

Okay. Thank you very much for receiving the annual report. In [ committing ] of time constraints and with your permission, may I consider the 2022 Annual Report on accounts, including the director's report and auditor's report and report of the Statutory Audit Committee, as duly read? Can the shareholder adopt the report as duly read?

Mr. Chairman, I would like to adopt that the report of the -- auditor's report, the Audit Committee's reports and all the reports as required by law are duly read.

Thank you very much, Mr. [ Ajudra ]. In line with Section 388 sub 2 of the Companies and Allied Matters Act 2020, I will now call on the representative of PwC to present their report for the year ended at 31st December 2022. Mr. PwC?

Thank you so much, Mr. Chairman and members of the company. My name is Pedro Omontuemhen. I'm the partner in charge of the audit. Our report is on Page 130 to 133 of the financial statement, which have been circulated. I will read only the section that this is an opinion like I did in prior year. In our opinion, the consolidated and separate financial statements given through our fair view of the consolidated and separate financial position of Seplat Energy Plc, the company, and its subsidiaries together the group as at 31 December 2022 and of their consolidated and separate financial performance and their consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies and Allied Matters Act and the Financial Reporting Council of Nigeria Act. What have we audited? We audited the consolidated and separate financial statement of profit and loss and other comprehensive income for the year ended 31 December 2022; the consolidated and separate statements of financial position as at 31 December 2022; the consolidated and separate statement of changes in equity for the year that ended; the consolidated and separate statements of cash flows for the year that ended; the notes to the consolidated and separate financial statements, which includes the summary of financial -- of significant accounting policies. Mr. Chairman, we report that were no modification of the opinion. I would issue different opinion to the company. And the opinion was signed and dated by me 28th of February 2022. Thank you, sir.

Thank you, Mr. Omontuemhen. I will now like to call on the Chairman of the Statutory Audit Committee or its representative to present their report to the shareholders. Can I have somebody from the Statutory Audit Committee or a member of the committee to present the report to shareholders that has already been taken as read. We've already taken this report as read. Okay. If there's no one to present it out -- since we're already taken the report as read, I will proceed. Did I hear somebody?

Yes. Thank you very much, Mr. Chairman. The report of the Statutory Audit Committee for the year ended 31 December 2022 will be found at Page 127 of the annual report, and should be taken as read. Thank you very much.

Thank you. Mrs. Hauwa Umar. The report is taken as read. At this point, I shall be pleased to answer any questions that you may have on the reports and the financial statements before we proceed any further. You may indicate your interest in asking questions by raising your hand electronically, and I will call on you. When called upon, please state your name clearly and endeavor to be brief. I humbly urge you not to repeat what someone else has asked already. Dr. [ Farouk Uma ], I can see your hand. After Dr. [ Farouk Uma ], We have Mrs. [ Bisid Bakari ]. And after [ Bisid Bakari ], we have Mr. [ Patrick Ajudra ]. And after [ Patrick ], we have Mr. [ Tunji Bamideli ], in that order. So we can start with Dr. [ Farouk Uma ]. I think he's having problems with his system. Okay, let's go to Mrs. [ Bisid Bakari ]. Okay. I will now go to Mr. [ Patrick Ajudra ]. We are struggling with the system. Mr. [ Patrick Ajudra ]?

I want to sincerely thank the Board and management of Seplat Energy Plc for producing this good financial result despite the difficult economic downturns, production stoppages, pandemic and the recent regular issue with the structure. Mr. Chairman, I also want to commend the company for the special dividend of USD 0.05 in addition to the final dividend of USD 0.025, bringing the total to USD 0.15. We are indeed very grateful, and we appreciate the Board for being consistent in dividend payment and ensuring a generous reward to their shareholders at a very difficult time that most companies have to finally give you cause to maintain profitability. Mr. Chairman, I want to ask you the question regarding production. Production was impacted negatively by about [indiscernible] all terminal, during which time, the terminal was unavailable for 7 days, consecutive days. But [indiscernible] that as an alternative route of [indiscernible] pipeline was provided for the shipment of the oil. And my question, sir, is how our sustainable is this alternative route? And of course, what is the status of the construction of another gas processing plant, which is yet to commence operation? Mr. Chairman, my second question is on our contracts, our share acquisition of Mobil Producing Nigeria Unlimited. Mr. Chairman, we bought in the shares of Mobil completely and with the intention to commence production, but it was discovered that the National Petroleum Company Limited initiated illegal action at such a high cost against Mobil Producing Nigeria Unlimited regarding the interpretation of a prudential right under the joint venture operating agreement. This has caused delay in order to analyze finalizing this deal. So my question to you, sir, is where are we today? Of course, we know the process of the production of oil was we get restarted. So where are we today? And of course, when are we likely to finally resolve this issue? Finally, Mr. Chairman, I would like to ask you about the outlook. What is your outlook for 2023? What is your outlook for 2023 with reference to increasing production capacity of gas and transforming the gas energy that is ensuring that this contributed into the sustenance of energy as required by most of the GenCos? So what is our prospect to increase our order production as well as increase our gas capacity? So on this note, Mr. Chairman, I want to thank you and thank the Board and thank the management. And in order to not to be distracted by this legal issue, God willing, God will see us through. Thank you very much.

Thank you very much, Mr. [ Patrick Ajudra ]. I will now go to -- I don't know if Dr. [ Farouk ] is there. Is your system working now? Can you hear me? Dr. [ Farouk Uma ], can you hear me now? I go to Mrs. [ Bisid Bakari ]. Is your system working? I see Mr. Akinlade.

Good morning, the Chairman, my colleagues, shareholders that are participating online. My name is Matthew Akinlade. I'm the President of Noble Shareholders Association. I have already submitted my comments to the company secretariat. I just need -- have a few things to emphasize. I join the previous speaker, who applauded the Board and management for a good performance in spite of the challenges of year 2022, whereby we were able to raise revenue by about 13%. And even cost of sales, despite the 13% increase in revenue, the increase in cost of sale was just 18%, which shows effective management of the company's costs. Like I said earlier, I've committed a comment earlier on, but there is -- there are just 2 or 3 items I want to also speak to in terms of our expenses that are rising. One is our tax that we paid to the government amount to 49% of the profit before tax. Is it a bad beauty assessment that as maybe to jump up. Again, our trade and receivable jumped up by [ 65% ].

Looks like we have lost you, Mr. Akinlade. Okay. We got the gist of the questions. Then I have Mr. [ Eric Akinforoo ], I can first see. He may be on mute. Okay. I will take these questions or we'll start to take these questions while we sort out the others because -- thank you very much, Mr. Akinlade and Mr. [ Ajudra ]. It's really been a difficult period, both operationally and especially in the Niger delta, mostly related to evacuation of crude as rightly said. But what you found is that we are very proud of our staff and their organization that they're able to actually respond quickly to this top and grow type of operation and keeping on one test interference out of our pipeline system. That's why we were able to even achieve the production we achieved. There were some companies in an area of operation that got little or nothing out of their fields at all. So our staff really did very well. It also means -- it also, of course, best relationship with a good connection we have our communities, the people who survey our pipelines, who report any time they see any infringement on our pipelines. But obviously, the big major ones, like for [indiscernible] one, that we're shooting for a very long time. I would like the acting CEO, Sam Ezugworie, to speak to the production numbers and the outlook, to speak to AEP, how sustainable it is, the annual gas program and production outlook for 2023. I will come back and respond on the NPU matter. And I will also like Onwuka to speak to -- our CFO, Mr. Onwuka, to speak to the [indiscernible] raised by Mr. Matthew Akinlade. So Sam, if you can go first.

Thank you very much, Chairman, and good morning, distinguished shareholders. I hope you can hear me well. So thank you, Mr. Akinlade -- [ Ajudra ], for the very excellent question you asked. And on production, I would just like to further emphasize on some of the points that our Chairman has highlighted. Part of the resilience we have in production, built on strong corporate governance and safety management system that we have and also on our community engagement and relationship. In fact, the Seplat idea and mantra for community relationship, we call them neighbors because we are neighbors. We don't call them host communities. And they are a very strong force in helping us ensure that we have a very safe operation. So in terms of production, [ what I want ] 2023, running on the back of the 2022 performance, already shows how we are strong and maintaining very strong performance going forward. So again, that speaks to you the outlook for 2023 that you asked for because we continue to ensure that we run a very strong and efficient production system. The AEP line that you spoke about is helping us a lot because it also adds to diversifying on our export route and networks. Now we do not have only one outlook to the terminal. And with that, we are seeing very strong improvement in our operating system and also in our production. The AEP will monitor that line on a daily basis to ensure that the volume of crude that we put at the entrance is also what we receive at the terminal. And the numbers are very good. So I will say that since July -- late July last year that we commissioned the AEP, the performance has been good and improving as we go forward. And we continue to rely on it also to continue to help us to sustain production and heavy production in 2023. So if I go quickly to the ANOH gas project. The message to our shareholders is that we are committed to bringing this project online and commissioning it by quarter 4 this year. And a lot of things are good happening at the moment. In terms of mechanical installation of all the equipment, we have done 100% of mechanical installation. And in terms of mechanical completion, currently, we are at 95%. So very strong in terms of getting all the equipments on ground. And on the interconnectiveness of the -- making sure that we bring the gas to the gas center, we are also working, hand in glove, with our government partner, NGIC, to bring in the OB3 and this whole line into operation. And as we speak today, the OB3 where we had significant challenge area with river crossing, we have very good progress made this quarter, and we are actually very hopeful that in the next couple of months, we should have OB3 also ready. We have flown in -- NGIC has flown in the best engineer in the world who works with the British underground and is currently on ground helping us with the river crossing, the tunneling and the grouting, and it's been progressing successfully. I think as we speak today, we have covered over 30% of the grouting already successfully. And this core line as well, all the line pipes are already on site, and we are about 70% completion on this core line. So overall, when you look at all the nitty-gritty that need to be done to ensure that ANOH gas plant is commissioned in [indiscernible] this year. We are also there. SPDC is also on course to deliver the 2 additional gas lines this quarter as we speak. So all the different elements are working together, and we are assuring shareholders that we will bring ANOH gas plant on stream by the end of this quarter this year. And if I just like to end by responding to the question on outlook for 2023, I will say that we have learned from the pipeline outages and the terminal challenges we had last year that affected us in quarter 3, and those learnings are being built into our operations this year. And we hope to sustain and plan to sustain the quarter 1 performance and continue to surpass that level of performance going forward, both in oil and gas production. And to the extent that we will have a very good year this year, that's the forecast. And I would like to stop here, Chairman, and hand back to you.

Thank you very much, Sam. I will now like to speak to the Mobil Producing Unlimited acquisition. We actually got the Minister of Petroleum, which is -- who is the president, approval of the deal in August last year. And subsequently, NNPC protected, came in, they do have some rights, and they wanted to test that right at arbitration. The president gave them leave to test their rights. The arbitration met once, and it was pushed way, way forward for the next meeting. So that has created a delay. But in recent months, we have engaged with NNPC and trying to see the ways we can close the gap between us and them and to see if there are working relationship we can have post acquisition that benefits them as joint venture partners without they being in the MPNU company, which obviously you know we acquired it through shares, and therefore, it's not part of the JIA. They did indicate that they would like to be part of it, but we clearly said that was a red line. And therefore, all we could do with them was within the JIA. And we've had some discussions with them, for example, giving them additional participation interest in the JIA, but not in MPNU, which is a strategic vehicle Seplat intends to use for that growth in the future. We are actively -- we've signed heads of agreement with NNPC, is waiting for their Board's approval. If their Board approves it and we close out the little gaps, the word out is that they are for training places for and NNPC staff in the company, which we said we were -- within reason, we will be prepared to do that. It's actually part of rule to have -- train our partner and staff. So we have, let's say, some agreement to move forward. If that goes through their Board, then we should be able to then move quickly with closing the deal with Mobil Producing. We have a -- understand with Mobil Producing that we will extend the life of the SBA to enable us to continue -- if we can close it out under this government, they'll close it out with the next government. So that's why we are still very hopeful. And we and ExxonMobil are fully committed to the deal, and there's nothing threatening the agreement we have at the moment. So we are hopeful we have the negotiations done. I also wanted to have mentioned that there were 80 questions submitted by shareholders. The Board will respond there to and of course, the answers will be put on the website, just in case we are not able to take many more questions. I would now like Eleanor, Vice President for Finance, to respond to the questions raised by Mr. Akinlade. Eleanor, can you hear me? Eleanor, we can't hear you. I think communication is challenged. Okay. We'll come back to that. I think we now have -- we have room for one more question because time is going. Can I have -- who's raised his hand there? Dr. [ Farouk Uma ], are you there now? Your hand is up. Okay. How about Mr. [ Modula ], your hand is up. Okay, I can see -- Eleanor, are you online now? Eleanor, are you online?

Yes, I'm online. Can you hear me?

Yes, we can hear you now. There are 2 questions. I wonder whether you had the past questions that were asked?

Yes, I did. Yes, I did.

And there's also another question that came online. How can we manage -- mine our gains in the crude oil hedging? This is from Mr. Anthony Omojola.

Okay. I'll go ahead...

Eleanor, we can't hear you. We've lost Eleanor. I see another shareholder, Mrs. [ Top ].

Okay. Good morning. Sorry, I'm joining this meeting late. I was having problem with my audio, with my connection. I don't know the questions that have been asked. I would just run through what I have. Beginning from the -- I want to congratulate you from -- for -- [indiscernible] on the color page of the report. And it just shows me that in spite of the -- I'm in touch with the common people in our communities. So I congratulate you for that. I also congratulate you for the successful acquisition of the Mobil Producing Unlimited. I hope there were no job losses with our access to the [indiscernible] terminal and the Bonny terminals. The issue of [ oil tariffs ] will be greatly minimized. I hope so. I note also that we are gas -- we are Nigeria -- gas is the future of Nigeria. And I believe that all Nigerians will support a company in its commitment to displace generators in gas power plants. So I therefore hope that at the moment, we are using [indiscernible] infrastructure. I hope that we will stop depending on [indiscernible] infrastructure for our gas. I also commend our company for decarbonization policy. Those evolve from Niger delta. We have seen what the overflowing of gas has done to the environment. So I hope that in no time, the year 2024 is going to be a benchmark. I hope that it will come to pass. I am concerned about some issues and that is that the number of directors that left our board last year, it's a cause for concern and even the number of directors that came in. At the same time, we had 11 board meetings. Of the 11 Board meetings we had 3 of them in February and 2 in April. This shows me that there's instability in the company and on the Board. In fact, the remuneration committee had 10 meetings, 10 meetings. It shows indeed that there is something. I hope company has got -- on what is happening so that going forward, there will be stability that would move the company forward. I note that we are committing 3% of our [indiscernible] Will I call it -- [indiscernible] in view of the PIA, [indiscernible] which should do more than 3%. I also noticed the lease of unclaimed dividends on -- attached to our reports. I would like to advise that going forward, that list should be printed out in alphabetical order. So that it would be easy for, also check our names. I congratulate our company finally with regards to being the only company -- the best company in Africa, the best energy company in Africa to win the Standard Assets Management System Certificate. I also congratulate our company for the dividend it's going to pay us. But please, my colleague [ Matthews ] will be asking for something bigger, all the time and always. I thank you for the opportunity.

Thank you, Mr. [ Thorpe ]. If I just quickly respond to your questions. Yes, certain periods of our business, we hold very frequent meetings. These are usually related to negotiating major acquisitions that require pre-turnaround discussions on the Board. And that is obviously what you saw. And that happened. I will say that since we embarked on the acquisition of the MPNU company, that single activity introduced a significant number of more meetings into the board because it was always moving parts and having to go and talk with government. And having to also take quick decisions. Yes, indeed, they are -- but there are normal times where we don't have as many meetings as those ones. But it's not instability in the board. Actually, the board usually is very unanimous in our decision. Very rarely do we have to vote on the board. The Board's decisions have always been unanimous. So that's where you actually test stability on the board. But when you have major issues to manage, the board needs to step up and be available to solve the problem for shareholders. So I expect the shareholder to commend the Board for putting out their time for those many meetings because the business imperative demand that is. So it's not a sign of instability. I would like to say, it's a sign of the commitment of our directors to put all the time necessary to support the company. Thank you for all the commendations on management of the environment and our commitment to gas. Gas definitely is a long-term focus for us, is the good engine of the company. They always say that Nigeria is a gas country with a little oil in it. It's just that we started with the oil first. We have ambitions for light gas reserves. One of the key reasons the MPNU acquisition is very important for our company. And we have ambitions for LNG development and so on. We see gas displacing diesel in the country as a way we can make significant contribution to the climate discussion by giving people access to cleaner fuel instead of a more -- and certainly the better diesel generators. We also intend to go, as you say, not selling our gas to third parties, but to actually go into power generation, that's the pillar 3 of our business that we talk about is in the strategy section of the annual report that we do intend to go into gas power. Obviously, not into the natural grid because that don't problems. We're probably -- we are going to go into mini grids or private grids where we can back it up with renewable energy, preferably solar energy. And we hope to take FID on April 1 of such project before the end of the year. So thank you very much. Your company is committed to growing value and sharing the value with the owners of the company. Hence, you see our attitude towards a dividend payment. And we are actually carrying out a long-term study on dividend philosophy. We hope that will be ready by mid year, and we'll be sharing that with the shareholders in the future. I understand CFO is now online. And Emeka, I don't know if you heard the questions that was outstanding for you is, one is how can we maximize our gains and in crude oil hedging and then to talk about tax numbers and also our receivables numbers.

I don't know why you can't hear me. I'm at home. Good afternoon, shareholders. Thank you so much for your questions. With [indiscernible] ask about factory and also on the [Trans Escravos] job. On the taxable profit after adjusted for nonallowable charges. These charges are noncash, are normally adjusted and the figure disrupt from year-to-year depending on nature of our operations. Particularly on impairments, overlift, underlift and also in terms of deferred tax, first I'm following the higher oil price and higher profit for this year. And as explained the format, with respect to effective tax rate for 2022, if I guess that on 2021. On [ Trans Escravos ], the major item that later the increase in the deposit that will pay it on NPA transaction awarded [ $8 ] million. That deposit was part of the consideration and our completion that will be robust part of the proposed balance. On hedging, we continue to maximize the opportunity in terms of the insurance top up hedging provides for our operations. We have effected a strike price that would normally want to achieve about [ $60 ], to ensure our operations can sustain everyone -- oil pricing go below [ $50 ]. That will also have a market as of the cost of hedging for the year. We try to hedge about 2,000 production in effect -- protects the -- the profitability of the business transferred to sustain our operation, despite the purchase -- normally weakness in oil price is on time. Thank you, Chairman. I think you got beautifully done -- action on financial years. Thanks.

Thank you, Emeka, distinguished shareholders. I would like to bring the question and answer to an end. Like I said, we received about 80 questions. They've all been answered and they will be put on our website. So you see the questions asked by other people and the answers we have given to them all. And like I said, close to 80 of such questions and answers that will be put out to shareholders. Please be rest assured that we listen to you and truly will take advise, and your concerns concern us. And you have a Board that is committed to continuing to deliver value but also a listening Board. I will now hereby propose that the 2022 Annual report and accounts, director's report, auditor's report for the year ended 31st December 2022, and the Audit Committee report be adopted as presented. Will a shareholder, please second this motion? [ Mr. Akinduro ]

Yes, Mr. Chairman, I do have a second that motion. My name is [ Eric Akinduro Akinnifesi ]

Thank you very much, Mr. [ Akinnifesi]. Those in favor of the motion and those against the motion should please signify by voting accordingly. Registrar, please proceed with the voting process.

Thank you, Mr. Chairman. The voting has now commenced. Proceed to vote on the resolution in line with your decision. However, if you're having challenges, voting, please refresh your screen. The voting has now commenced. [Voting]

Registrar, we can't hear you. Registrar, we cannot hear you.

Voting has ended. At the end of voting 349,339,000 units, representing 100% of the votes in favor of resolution. Thank you.

Thank you very much for the results. I hereby declare that the motion carried unanimously. The second item on the agenda is to declare the final dividend recommended by the Board of Directors of the company, in respect of the financial year ended 31st December 2022. During the Board meeting held on 24th February 2023, the Board of Directors recommended a final dividend of $0.025, which is equivalent to NGN 11.57 at the exchange rate of 10th April 2023. In addition to the final dividend, our stated the Board also declared a special dividend in the amount of $0.05 which is equivalent to NGN 23.11 at the exchange rate of 17th April 2023. The special dividends shall be paid together with the final dividend to all shareholders, bringing it to total of NGN 24.67 per share. In the absence of questions, I hereby propose that the final dividend of $0.025, which is equivalent to NGN 11.56 per share, recommended by the Board of Directors be accepted by the shareholders as the final dividend for the year ended 31st December, 2022, an additional special dividend of $0.05, which is equivalent of NGN 23.11 at the exchange rate of 17th April 2023. Will a shareholder second?

Mr. Chairman?

Yes.

My name is Mrs. [ Adebis Bakare ]. I second the motion. And in respect of that, Mr. Chairman, I was trying to raise up my hand earlier. So I want to use this opportunity to really commend you and your team for your visionary leadership, for the commitment you have to sustain this remarkable growth in Seplat Plc. This is highly commendable. And I also want to really commend our company for the dividend of [ $0.15 ]. This is the first time in Nigeria capital market that any company is paying dividend quarterly, $0.025, quarterly. At the end of the year, we're having [indiscernible] and you -- the company also give us $0.05 special dividend at the end of the year. This is highly commendable. This is the first time in the history of Nigeria capital market. On that note, I want to appeal to shareholders or board that are doing politics with our company that they should please cease from meat. Whatever that is anybody's personal business in Seplat, they should keep it aside. Let's concentrate on our business. I'm just appealing to everybody. On that note, I second the motion. Thank you for the opportunity given to me, sir.

Thank you, Mrs. Adebis Bakare. Thank you. Comments well made. Those in favor, and those against this motion should please signify by voting accordingly. Registrar, please proceed with the voting.