Seplat Energy Plc (SEPL) Earnings Call Transcript & Summary

Good and welcome to Seplat Energy Places Full Year Results 2025. [Operator Instructions] I would like to remind all participants that this call is being recorded. I will now hand over to Roger Brown, Chief Executive Officer, to open the presentation. Please go ahead.

Thanks, Justin. It's James here, Head of Investor Relations. I'll just kick us off here. But good afternoon, everybody. Welcome to Seplat's full year results for 2025. On the call today, we have our COO, Roger Brown, CO Samson Ezugworie; and our CFO, Eleanor Adaralegbe. We will follow the normal process of prepared remarks followed by Q&A. Before we start, I encourage you to take note of the forward-looking statement on Slide 2. And now I'll pass you over to Roger for the introduction. Roger, over to you.

Thanks, James. Hello, everyone. Let's run through the full year 2025 highlights. If we can go on to the next slide, the next one. Okay. So let's just start off with the investment case. This year, we're really seeing the full effect of the mobile producing acquisition. So we've got a full year of results. And you can see it's a transformational acquisition. And really, if we look at all the sort of metrics, we're seeing triple growth in most of those metrics. We have a giant resource base now, and you'll see that and Sam will run through the reserves. But really, we're sitting on 2.5 billion barrels of oil equivalent of 2P plus 2C, which in the JV perspective is 6 billion barrels. That gives us a massive platform group production and cash flow and obviously enhance the shareholder returns. And I said before, Nigeria really has a very good premier hydrocarbon base, which allows us to capitalize. We set out in the Capital Markets Day our 5-year plan for 2030, and we're on track for that. We're going to see over 200,000 barrels for the JV, that's going to be over 500,000 barrels. And then the commitment to deliver at least $1 billion of dividends and aggregate dividends over the next 5 years is on track. So let's move over to the full year 2025 financial highlights. And Eleanor will cover most of this, but let me just give you a summary. So in terms of production, we're seeing 131- 1500 barrels of oil equivalent per day. And a lot of that -- most of that is obviously oil. That's 148% year-on-year growth, onshore 14% and offshore 9% year-on-year. We had original guidance production of 120 to 140, and we tightened that in Q3 to 130-140 and we're sitting at 131.5. So that's within guidance. Group revenue. Again, we've seen very strong group revenue of $2.7 billion. 93% of that sits in liquids between oil and NGLs 7% gas. So we're really seeing the benefit of the offshore business. Adjusted EBITDA of $1.27 billion, very strong indeed. We have cash flow from operations pretax of almost $1.7 billion and also post tax, it's -- I think it's $1.1 billion. So it's very strong there. And dividends, again, we are committing to our core dividend and our special dividend. And we're proposing here to the AGM a final dividend of $0.03 a share. which will give us $0.25 per share over the year. Again, Eleanor will cover that. And then the credit rating agencies of Moody's, Fitch and S&P, we see S&P's raised us to positive from stable outlook, and we're seeing Fitch going up from B- to B. So this is showing that the credit metrics of the business has been recognized. Going through to the next slide, we go into corporate highlights. We separate this between the onshore and the offshore highlights. So the big thing for the onshore business was PIA conversion. We achieved that in Q4. And then you're going to start to see the real benefit of the lower tax and royalty rates coming through that onshore business. That was a lot of work we needed to get through with the regulator, but we've broken the back and we've had that approved. And again, for the offshore business, we're now starting to have discussions on PIA conversion for the offshore. Our commitment to flaring out is starting to pay dividends and CO2 emission reductions. We were down 24% year-on-year on that. And we are completely flared out of end of routine flaring on the Western assets, we're about to do this in the East when Anoh up to full production, and that is seeing a lot of savings for us. I think it's about 9 million savings of this year. Offshore highlights the idle well restoration program, which Sam will cover. It has been very successful. We have added 49,000 barrels of oil from that program from 49 wells. It's about 1,000 well, and we will continue to do this in 2026 targeting 50 wells. So this is really low cost, what we call low-hanging fruit or stock activities. And the last highlight there is the IGE replacement. This is in the eastern part of the offshore. And this new IGE unit is giving us a much bigger throughput through NGLs, which are getting monetized. So it's being successfully executed. It's on stream, and we're starting to see big uplift. And again, Sam will be with that in his section. So let me hand across to Sam to cover the operational performance.

All right. Thank you very much, Roger. Good afternoon, everyone and all. Roger started by highlighting the entire resource base that we are sitting on at the moment in our combined business. 2P results at the end of the year stood at over 1 billion barrels of working interest numbers down 4% from previous year, driven by 48 million barrels of production in the current year. The dimension in offshore, onshore, you can see 2C is around 50-50. And then you can also see our products, liquids, gas and NGLs also in dimension at the bottom. 2C, we recorded 8% uplift in 2C following the field development plan for 4 key fields in the offshore fields that we have now also technically matured and included in our program leading to a combined 2P-2C of nearly 5 billion barrels highlighted earlier, also split into offshore, onshore. You start seeing this skew towards the offshore and then liquids is still leading 47%. Diving now into safety and environment. Safety continues to be top priority for our business. In the course of the year, we achieved over 40 million man hours LTI free operations. We also concluded and completed our flaring program in the onshore business, as Roger highlighted earlier, and we are seeing the benefits coming in already. It's also important for us to highlight that in the course of the year, we recorded LTI onshore in quarter 3 at one of our contractor staff himself finger while cutting out our operations. We had an LTI operations offshore, and we also had the YOHO 2025. It has been out, we are restoring the YOHO production by quarter 2 this year. I think those are the highlights. The end of routine flaring projects that we have achieved in the onshore business, we have now also begun to dimension and define our own road map towards achieving similar results in the offshore. Diving into production. Next slide, you will then begin to see the scale of our new business. Our production is nearly 3x the production as of end of full year 2024, given the scale of our new business. But it's also important to reflect that the efficiencies we saw on the 2 sides of our business. In the onshore, we continue to see improved performance on both liquid and gas as also been driven by the turnaround maintenance that we carried out in gas plant late 2024 and then commissioning of the SIGP, the satellite integrated gas plant that are now beginning to deliver results. On the offshore side, the production improvement was driven essentially by 2 big items. Roger talked about the idle well restoration program and the in gas exchanger replacement at the EAP. The idle well restoration program, you could see the bottom left chart that started with a very slow ramp-up in quarter 1, delivering 11,000 barrels and then leading to the full year delivery of 48, 49,000 barrels of oil per day from the 49 wells that were last year. It has been very strong. The IGE replacement project, I will talk to -- I will give you a spotlight on it. But just the highlight, I will say upfront is that the current performance of the IGE is taking us back to 2017 levels when Exxon was operating this plant fully. I think -- but I will leave this spotlight into the future. Let me talk about our midstream business. The midstream business also grew up in scale following our integrated nature. Gas production went up 54% from our 2024 product levels essentially driven by the 2 things I mentioned earlier. On the onshore part, you will see we ended nearly 130 million cost of gas per day year average an uplift from 2024 levels because of open and satellite plants working and then bringing on the offshore business and the Anoh production. It's important to highlight here that our Anoh gas plant coming -- we achieved first gas in January this year, and we're currently supplying 50 million to 70 million of gas per day to Indorama, and we are on cost and on standby to ramp up production to LNG. The next coming is our Oso-BRT Phase 1 project. This project will double our current production to LNG from 130 to 240 and is on cost for delivery and first gas by the third quarter of this year. Next slide. Next slide will then give us the spotlight to the inlet gas exchanger replacement at EAP. Of importance to note is that at CIC, we were producing NGL at about 7 KVD. Following the successful change of this in gas exchanger, we are now producing about 33,000 barrels of KVD every day, which is -- you can only take that back to the last time it happened in this facility was in 2017. So this is the moment that we have continuously demonstrated how well we can deliver on capital projects within a very short period of time. I will end with giving you an outlook for the project key project that we want to execute in the current year in alignment with our lidar program leading to 2030 that we presented at the CMD in September last year. If I start with gas, I just mentioned the Oso-BRT Phase 1 project, the expansion project. This will double our production to LNG from 120 million to 240 million scars per day. We then have the major pipeline project that is also coming behind that, the Oso-BRT Phase 2. This will further double our production from 240 to 480. This is not to be delivered in 2026 by '27, but we are already working on the engineering and getting ready for that project all the front-end work. The next phase is for us to stabilize production to commence LNG from Anoh gas plant and where we continue to ramp up at Seplat integrated gas plant and we commenced LPG production out of Seplat again in this quarter mid this year. Going straight to drilling, we have an aggressive drilling campaign for 2026. We have about 17 wells to be delivered this year, and we are going to commence drilling in the offshore business. So while we start drilling offshore, we also focus on delivering additional 50 idle wells to be rest in the current year. And last but not the least, focusing on infrastructure. We will continue to work our asset maintenance in the offshore asset integrity and asset maintenance offshore. This for us is very key because it is about our foundation, laying the right foundation to go faster and safer in all the offshore activities. We will restore in the second quarter of this year. And then we will continue to build resilience in the onshore business, making sure that we will manage third-party dement through the installation of our tanks in such a way that if we have out of any of our pipelines, we will have back to continue producing while the pipelines have been restored. That will be the end of my presentation, and I will now hand over to Elan, who will take us through the financial aspects of the business. Thank you. Eleanor to you.

Thank you, Sam, and hello, everybody. Thank you for joining our call. This will be the first full year where the scale of our business comes through in the numbers. So I'm going to hit the highlights in the next slide, please. Starting off with revenues. Further to the increase in production that we have just talked about earlier, our revenues are up 141% year-on-year. So revenues at $2.7 billion. Again, that's what's demonstrating the scale of our business. And this is despite lower oil prices in 2024 compared to 2025. Again, oil prices dropped 12% year-on-year. So again, you can see that what we've delivered in 2025 is really about production volumes and operational efficiency. Adjusted EBITDA is at $1.27 billion, again, demonstrating the value that we've created in the year, again, about 47% margin there. We did have a net income of $159 million, again, very positive, and I'll speak to the impact that has on our dividend. The dividend went up year-on-year, $0.25 per share. Again, very positive. This is the first time that we'll be delivering dividend in a full year at this scale, so over 50% year-on-year. I think the most important bit for me is the operating cash flow at $1.17 billion. Again, that supported the repayment of our debt. So our net debt is now down to 673 million. Again, there was an increase from Q3 to Q4 because we settled there was some working capital impact of our business in Q4, and I'll speak to that in a little bit. I think another thing to really mention here is the strength of our balance sheet. Post-tax cash flow really is like times 4 where it is today. Again, back to the fact that this reflects the combined business, which is a business at scale. We talked about the credit ratings earlier. So very positive. Fitch upgraded from B- to B. And we've continued the hedging of our business as we've done previously, which is protecting the downside. Going to the next slide, this provides a bit more detail on our business. We usually would show this slide and it's the profit statement. Again, this really made I'll just call out on the costs. We see that the cost did go up. The cost of sales are higher. That's reflecting the work in our offshore business, dealing with asset integrity, reliance on our infrastructure. And also, we see that G&A has come down. So even though costs are up on cost of sales, it's reflecting the business that we've delivered. G&A is down year-on-year. Again, we are constantly focused on bringing our cost down. And in 2026, we'll see that coming down further. I think it's important to highlight here that operating profit has more than doubled again despite the impact of price, lower price year-on-year, we're seeing significant positive operating profit. Tax is a good one to call out. We had previously reported effective tax rates at around 80%. With the benefit of PIA now, we're reporting effective tax rate at around 68%. Now this is just from the impact on our onshore business. As we look forward to convert to PIA on our offshore business, we should see the numbers coming down further. Let's move to the next slide, please. So the next slide really shows the cash generation, the strong cash generation in the year. We started the year with $470 million of cash. We've delivered $1.7 billion in cash flow from operations. And after delivering the Capex, again, we completed 11 development wells in our onshore business and also invested in the gas business offshore in addition to planning for the drilling campaign offshore in 2026. And we've also completed the payment to ExxonMobil in the fourth quarter, and that was a major working capital impact in the fourth quarter. But despite that, cash before the debt movements was almost $700 million, and that really reflects the impact of our business. Again, if we had not paid down our debt, would have been carrying almost $700 million in cash. And so we did repay the RCF in 2025 so that also helped us reduce our costs. And so we ended the year with $332 million in cash. I think if you look at the chart on the bottom right, you start to see year-over-year how our business -- the scale of our business is demonstrated as the working -- the free cash flow after adjusting for working capital was almost $560 million. Let's move to the next slide, please. So again, the strength of our balance sheet really comes through here. We have a really healthy and well-disciplined managed balance sheet. What's really supported this is the fact that we have flexibility with our finance structure. So we have a mix of lenders and different types of debt. Yes, I talked about net debt or net leverage being down at 0.5x, again, very positive. In addition to that, we do have additional flexibility with our liquidity, demonstrating again the resilience in our financing structure. So up to over $700 million available liquidity, including the cash balances that we're holding. Again, this then supports the future for us. Again, we do have quite significant Capex that we want to deliver in 2026. So this then provides us the ability to do that. I think what's also important here is to look at our debt profile. We don't have any debt that are maturing before 2027. And at the end of January of this year, we did refinance our revolver credit facility. So we upsized it from EUR 350 million to EUR 400 million, and we also reduced the costs. We do have a $650 million bond. We potentially could have an opportunity to refinance that next year. It's a 5-year bond callable in 2 years, and we refinanced that in March of 2025. You can see the over time, how we've managed our debt and we've been way below, of course, the x net debt to EBITDA. And I just mentioned that we closed the year at 0.5x. So again, very positive, strong balance sheet, and this is how we've been running the business over the years. The next slide, a very important slide that sort of brings to bear how Seplat is running as a company and how we see the improvements in the sovereign. So if you look at the chart to the left, from around February of 2022, you see that leverage has started to come down. This really shows the performance of our bond and also the Nigeria sovereign bond, and you can see there's been a trending downwards. I think a lot has happened in the country with the executive orders, the PIA being enacted and other support around security from the government is now improving our sovereign rates. The next slide is really an important slide to see how we, as a company, are managing our balance sheet, again, with governance and a focus on capital discipline from 2022, and this is rates above SOFR and LIBOR. This is without SOFR and LIBOR considered. But from 2022, you see our interest costs were around 7%, and this has now dropped to under 5% in 2026. Again, what we just tried to do over the last year especially is really look at our various bank debt and the opportunity to refinance our debt so that we can bring the cost down. The next slide is really just reminding us again what we shared our dividend policy. We had provided details on our dividend policy when we laid out our plans at the Capital Markets Day. And the focus for us was that our dividend will be linked to our free cash flow. So we said through the cycle from 2026 to 2030, we will be paying 40% to 50% of our free cash flow in dividend or at least 40%. And it's estimated at around $1 billion over the cycle up to 2030. So quite significant. If you look at the chart below, you can see the trend of the dividend growth year-on-year with, of course, this year demonstrating over 50% year-on-year. The last dividend we paid in 2024 was $0.165 per share and the full year dividend for 2025 is $0.25 per share. I think it's important to just remind us that this will be a minimum dividend. We have promised a minimum dividend of $0.20 per share. And already in 2025, we've delivered over that minimum. So we are keeping an eye on the $1 billion promise to shareholders for dividend over the next 5 years. I think what's also important to highlight here is cumulative to date since we listed back in 2014, we have paid over $800 million in cash dividends, and this excludes the Q4 dividends that we have declared this period. We also mentioned when we delivered our 5-year plan that the $1 billion cash dividend estimate is secured at $50 per barrel oil. Anything below that, there will be a discussion as to what we will be doing with dividend. I mean just stepping back, thinking about 2025, it was really a step change for us from a financial position. The scale of our business is now really clear. Cash generation is very strong. We reduced leverage and capital allocation remains disciplined. We're going to be doing a lot in 2026, and Roger will take us through the outlook and the future operating opportunities. Thank you, Roger, over to you.

Okay. Let's wrap up with the outlook and guidance. The next slide. So we can see we announced some Board updates. We've got 2 new Board Directors, Mr. Tony Malu and Mr. Larry Eta joined the Board, and we had our first Board meeting yesterday. Tony Malu has joined the Board on the basis that there was a change in shareholding, which we announced at the end of last year. For more important, we've been a long-term shareholder in the company for 15-plus years and decided to exit and Harris Group came in as a long-term investor into the business. So we've seen the impact of that already very fast. In terms of support. I think from a Nigerian perspective, it is good. We're starting to see shareholdings similar to what we had at listing, I think over 50% as a shareholding to Nigerian investors. I think it's important from a long-term growth perspective and the interest in the country. We're seeing that obviously, we lost some Board members. I think that's -- it's hard to see them go, but of course, they joined the NNPC Board. So I think what does is we have a quality of Board members and those Board members are in demand. So I think it's better overall for us in this industry. Let me just go on to the next slide and talk about the road map 2030. So we made this in the Capital Markets Day, but just for [indiscernible], where are we on that? So we've put it down into invest, grow, earn return. So invest, grow, earn return. Invest the next 5 years, we're looking to deploy quite significant amount of Capex, 2.5 billion to 3 billion. And for the joint venture, that means $6 billion to $7 billion. And if you add in the OpEx for the joint venture, we're looking upwards of about $17 billion and separate share that will be around 7 billion, in the upper end of the guidance range. It's a significant investment, but the great news is that the reserves policy of the subsurface warrants it. So we're looking to grow -- and that 5-year projection of production growth is from where we are today, 131.5 million to over 200. And again, for the JV, that's going to be over 500,000 barrels of oil equivalent. So a very sizable producer in country. That to earn, we will then look at significant post-tax operating cash flow. So we're looking here around $5 billion to $6 billion in aggregate. And so that cash will allow us then to significant -- get better returns. And again, this is why we're confident we set out a cash dividend of at least $1 billion could be better than that. That is a commitment we have to you as investors that we're looking to turn this cash flow and return back to the owners of the business. We then move on to the 2026 guidance, just for a checkup here. We put here in the table 2025 actuals and the 2026 guidance. And you can see there in terms of production, we're guiding 135,000 to 155,000 barrels of oil equivalent. That is a 10% uplift in the midpoint from the 2025 actuals. I think this year, sounds there's going to be a lot of investment going in, in terms of new drills, et cetera, and we're going to start to see that come through in the production. Capex, we had $267 million Capex this year. We're guiding $360 million to $440 million in the range and through the years, we'll naturally tighten this guidance as we get through the year. Operating costs, we have units now focused on cost reduction, cost control, and we are committing to a long-term reduction in the operating cost. Our target is towards $10. We're $15.7 at the minute. Next year, we're guiding -- or sorry, this year, we're guiding $13.5 to $14.5 per barrel or BOE. D&A again, we were looking to drive that down between $4.5 and $5. And then cash taxes, 2025 was 23. We're in that sort of similar range in cash taxes even with the production is up. And therefore, that's the benefit of the PIA conversion and the efficiency of our business. So in terms of the outlook, big focus on strategic maintenance and integrity activities. This is not about getting production up. It's about getting the average of production up. So every day we reduce and that's really important, particularly in the offshore business. In terms of the drilling new wells, 17, 15 onshore, offshore. So in Q3, our jackup rig will come on to site also, and we will start drilling 2 wells there. That's very exciting, and we have a big campaign, which will follow thereafter. In terms of the idle wells, we talked about that, that's 50. That's very easy low-cost production coming on stream. On the gas side of the business, gas is really going to be a big growth area for us. We're delighted to say that Anoh got first gas in January. We have a team at the minute really looking to now flow into Nigerian LNG imminent, and we'll be able to then ramp up the gas plant to capacity. And then also BRT Phase 1, this is where we increase or double the output from the also the BRT, which goes into Nigerian LNG. That's going to go from 120 to 130 to 240. In terms of our corporate sustainability PIA conversion, working towards for the offshore and operated assets. And then we said this before at the CMD. We're still in discussions with NAPC on this 10% sell-down. Those discussions are still ongoing, and we'll update you as appropriate. So let's just sum up here. I think overall, we're very happy with the performance -- and you can see that in a very strong set of results. I think the market is now starting to see the benefit of the acquisition we made, and you're going to start -- see the value start to come through into the share price. We're well placed. We're on track for the 2030 targets set out CD -- and I'd like to personally thank all the team at Seplat, our large team that we've now integrated with the global producing team obviously fully. integration has gone very well. We're all coating at the minute. And I think the sort of power of the collective will then drive us to deliver on all our promises. So we'll have good success in '26. So that's it. Thank you. Let's go back to the operator for Q&A.

Justin, we can open the lines up for questions.

[Operator Instructions] And we will take our first question from Sam Wahab from Peel Hunt.

Firstly, congratulations on a very robust set of results today. Just 2 questions from me. The first is around the idle well program. Obviously, you've got a lot of success in FY '25 with that, working out around 1,000 barrels per well. But were you sort of surprised with that -- with how strong that was? And how should we be thinking about it going into this year with 50 wells slated to be drilled? Should we be thinking it could be a similar sort of number? And then on the second question at Yoho, what steps are there currently that you see to get this restarted in the second quarter so that we can get production up to where you think it should be? And also what sort of risk do you -- would you foresee during that period?

Thanks for that question. Let me bring Sam into this question. Sam?

Yes. No, thank you. Thank you for the question. And the idle well exploration program that we had the success we had in 2025 is -- I think it is fully in line with our forecast. We had always said in these calls that we expect about 1,000 barrels per day recovery per well -- and essentially, it came out as we forecasted. So going into 2025, we expect somewhat similar outcome as well as we had with 2024 -- sorry, 2025. And yes, we already have executed quite a couple of this year, and we are actually seeing also very strong results from the one that we have this year. So in terms of outlook, I would say on cost, similar to what we have achieved last year, we will be somewhere there. Maybe I think we'll just update you as we go ahead in the course of the quarter because again, to put all the costs in the room, we started with the most juicy and easy to fix wells. So there might be 1 or 2 that may not turn out the way we have MA, but we'll report that as we come along in the course of the year. On Yoho, very good question. We are on cost in restoring Yoho restoration we've taken on as a major project. We have a project plan Level 3 project schedule for it. And we have also brought in an expert globally who we actually took off from where he was busy somewhere in China to help us in making sure that all the activities that we have lined up for Yoho restoration is on cost. In terms of risk, the biggest risk we've seen with it is with cables. We have the cables that got bond that we need to manufacture and we need to get to the original manufacturers. what we have done is to go and be engaging with the manufacturers in person. We are not going through third party and we are scaling up supporting them and ensuring that we should be able to get the cables in. So we've got the best in the world to help us and we are also working directly with the equipment manufactures to ensure that we hold to the promise we see there is the manufact of the right time for us to execute. But at the moment, we have absolute line of sight to delivering of the cables in time for us to restore by second.

Yes. Just let me summarize there. We're confident in Q2. Some context here is 50 kilometers. So it's quite a sizable task to do this, but we're confident we can deliver next quarter.

Our next question comes from the line of Ntebogang Segone from Investec Bank Limited.

I've got like 3 questions. My first question is mainly around tax. I mean if you look at your FY '25 effective and cash tax rates, they were materially below what you previously guided. And with 2026 cash tax being guided between $400 million and $450 million, how should we then think about the sustainable effective and cash tax rates over the next 3 years? And then on production, just looking at your, could you clarify what the result timing in Q2 2026 and also ramp-up profile are assumed in the midpoint of the 2026 production guidance? And then my last question is just around cost. I mean, given that volumes are expected to rise in 2026, could you also help me understand the cost architecture underpinning that broadly stable operating cost assumption that is driving that lower unit operating cost that is expected this year?

Thank you. Let me just go to Sam quickly on the fourth -- your second question and then you can answer and then over to Eleanor for cost.

Thank you. Exploration, we said quarter 2, the production impact and uplift is 20,000 barrels of oil per day.

Yes. Thank you. So for the cash taxes, the impact of the fourth quarter 2025 reduced the cash taxes that we anticipated. We've guided now for 2026 and our expectation is that $400 million to $450 million would be the estimated cash taxes for the group, assuming $65 per barrel. What we've also shared at the Capital Markets Day is that we are aiming to bring the effective tax rate down to around 40% over the next 5 years. On the costs, yes, there's a constant drive to reduce costs, and you can see that from 2025 into 2026. And the biggest part of that is really the focus on driving the volumes up alongside looking at synergies and opportunities of securing contracts over a longer term.

Let me answer your question on OpEx. [indiscernible] flat cash costs year-on-year.

Yes. So we've estimated or we're guiding that OpEx per BOE in 2026 would be between $13.5 per BOE to $14.5 per BOE. And yes, we also shared in the cash cost, we expect to be around the same. So we will be driving the volumes up. Again, remembering that we are incurring costs on asset integrity and constantly ensuring that we're investing in the reliability of our infrastructure and some of those costs are coming through the operating expend.

Any more questions at all?

[Operator Instructions] For now, I will hand over to James Thompson, Head of Investor Relations to read out the written questions.

Okay. We've got coming in. Thank you very much for that. So maybe I'll just run through them in order. Just in terms of the offshore drilling, can you give us a flavor of how long we expect the offshore wells to take to drill and how many of them will be bringing into production in 2026?

Okay. The onshore drilling campaign is supposed to take this well we have planned 6 offshore. per well, we've planned about 65 to 70 days per well. And we plan to bring on 2 of those wells into production this year. I can also complement that we expect to get a lift of somewhere between 4,000 to 6,000 barrels of oil per day from these wells.

Okay. Great. Can we provide any update on the midstream spinout?

Okay. So the work on the...

I don't mind. Yes, so we have -- we've done all the structural work on the midstream. I mean when we talk about midstream spin out, what we mean is our gas business. And what we're doing now is running the gas as a division of the company. So we -- in line with the PIA, the gas plants are midstream and there's advantages in terms of tax and everything else around doing that. So all our gas plants are midstream businesses. We have structurally separated them from the upstream -- and although it's -- to be clear, it's 100% owned by Seplat Group, except for the gas plant. But of course, we're in a 50-50 IV with the government NNPCGC shareholder. So that we have done all the work on. We are now building out that gas division with bringing in LPG. When we talk about NGLs offshore, by the way, that's a subset -- LPG is a subset of the NGLs as well. So -- and then obviously, we're going to do CNG with the gas plant put a unit there. So it's done now. We'll keep it as part of the group. Longer term, we'll have to then look to see how we want to build out that gas division and what it means for us long term.

Okay. Just carrying on, can we give some more details about the payment facility with Exxon and why we consider it as debt?

All right. Thank you. So yes, the advanced payment facility is a $30 million advance that we obtained from ExxonMobil and was part of what we used to complete the transaction back in 2024. So obviously, we are carrying that on our balance sheet as debt. It remains a debt that is payable over the next 2 years. And so we potentially have an opportunity to pay that down. So you will see it on our balance sheet and included in our gross debt, which is around $1.1 billion.

Can we provide some more guidance about the route to 200 kV, so how we're going to be adding production over the next few years?

Yes. I mean I think we set that out quite clearly on the Capital Markets Day. So if you look online, you'll see that there's actually an online video as well, and you can see how we set it out. We've dimensioned the business from the -- into the onshore and the offshore business. It's pretty clear in the onshore, you'll see that ANO is a big part of that building block and we're bringing on production. You're not seeing the full benefit yet from ANOH, but we're starting to supply gas into Nigeria LNG. And so we're going to see the gas volumes uplift and also we're going to see the condensate, which can have the wells get monetized as well. So that's the onshore. In the offshore business, again, as Sam said, we're going to start the drilling campaign Q3 this year. That is a multi-rig, multi-well campaign over the next sort of 5 years as we start to drill the offshore. We'll continue to obviously bring on board the shut-in wells. That largely will arrest the decline that you'll see in the offshore business. But actually, what you'll then see is some growth through the drilling. But what Sam did talk a lot about was the integrity and maintenance because one of the big things here is the interdependency of the offshore business dependency between oil pipelines, facilities and gas pipelines and facilities. And we're doing a predictive maintenance using a lot more technology coming in here, looking at how we increase and what we call deferments, unplanned deferments reducing those, and we're going to get more throughput from that, which is particularly important when we bring on new wells. And then the big -- one of the big things that we are doing, and we're excited about is that Exxon was more focused, I think, on the oil and gas -- the oil side of the business. The gas business, we obviously inherited 110, 120 million a day, which is going to Nigerian LNG today. We have set out in the Capital Markets Day our growth plans for the gas business, and that's really going to be quite significant for the offshore. We've got around 10 Tcf of gas there. We have a number of hubs in the offshore, and we're looking on a mixture of gas pipelines to supply that gas onshore to the likes of Nigerian LNG. We'll be doing gas projects in Anoh state and then also looking at floating LNG options, particularly for. So in aggregate, when you build that all through the 5-year plan, you can then track it up to the 200,000 barrels of oil, which is our target.

Okay. Thank you. Operator, do we have any more questions on the line or I will continue in the written ones.

No, sir, there are no more questions on the line.

No problem. So just carrying on. So a couple of questions on ANOH here. Can we provide an update on the timing of gas to Nigerian LNG from ANO? And then a second part to that is when it's up and running, could you talk a little bit about the interplay between offtake between Indorama and Nigeria LNG? And final one on ANO there is actually how much of ANO is in our 2026 guidance?

Okay. Let me deal with that. So we've had gas behind pipe ready to go to Nigerian LNG now for quite a few months. And we've been working with all the partners, whether it be the pipeline partners or the shareholders of Nigerian LNG to get the contracts in place to supply that. There's been a few technical issues. There's been other issues. But we have broken the back of that. The contracts are now all signed. We've got a team ready on site for opening up and starting to -- we call it pack the line. So we need to flow gas into the pipeline, which will go through the Rwanda pipeline system into Nigeria LNG. That's a 90-kilometer pipe. So it will take time to sort of pipe package. That's commenced now. What I'd just urge is that, that will take a little bit of time to ramp up, but we're delighted that's happening at the minute. And again, we're also at the same time, we're evacuating condensate, which we have in storage at the gas plant, which is also a critical bit for monetizing that through the TMP into Pony. So that's in place at the minute. We're going to see the ramp up. In terms of that, we've been quite conservative in the numbers in that ramp-up, both in the gas side of things and also the condensate side. But that's in place today. In terms of the volumes and interplay between Indorama and LNG. Indorama are supplying somewhere between 50 million to 60 million scfs as we speak. Then they are upgrading and that up to 100. And so we're looking to supply that and then the remaining balance obviously will go to Nigeria LNG. The government through NGC, which is a shareholder in AGPC, is obviously doing the OB3 pipeline. That technical issues, right? But we hear from our partner that they've made very good progress in fixing that. So at some point, probably later this year, we'll see the OB3 up and running. And that's quite critical because we'll see then that gas will then flow to -- through the OB3 pipeline and connect to and then we'll ultimately get monetized there. And in the future, it will go to the AKK pipeline it's complete. We also, at the same time, obviously, are then ramping up our offshore supply to Nigeria LNG. So we'll go from 120 liter this year. So we'll be supplying initially from AGPC and then ultimately, we'll be supplying Nigerian LNG for the offshore. So I think we've made some very good progress there. It's one of the critical 7 critical gas projects. The first one was completed. And we're delighted that we've done it in 50-50 with NNPC.

Thanks. So just combining a couple of questions here, thinking about 2026, a question about whether we see adjusted EBITDA at $2 billion in 2026. Perhaps more broadly, can we give some guidance around the outlook from that perspective and also in terms of free cash flow for the year given some of the moving parts around Capex and the impact of the PIA royalties. Some color on 2026 direction.

Thank you very much for the questions. I think it's important to note that for us in 2026, there's going to be significant capital commitments and a lot of the cash flow generation that you see in 2025, we are deploying to deliver the work program in drilling and the gas projects. So EBITDA, we haven't guided. I mean we've been quite conservative in our planning on oil price. So it's obviously going to be a function of that. I think -- what I will say is that we will be maintaining our commitment to shareholders on dividend. And during the half year, we would give an indication of whatever top of the there will be on dividend. We'll maintain the $0.05 per share for Q1. And then at half year, we will give an indication of what happens for the rest of the year. On PIA, we expect to see similar effective tax rates as we've seen in 2025, bearing in mind that Capex is going to go up. So that will also have a positive impact there. conversion on onshore, again, is positive and we expect to see some value come through in '26 as we also strive to convert our offshore business to PA start to see the taxes coming down as well. And you're right on royalties, again, the direct impact of converting is a lower royalty. So cash flow will improve. We'll also see some of that impact on the actual taxes.

Thank you. So just a question on oil price assumptions. What is the oil price embedded in our kind of cash tax guidance? -- we can just cover that off, we forecast $65 this year. Can we give a price where cash tax be 2026?

Pay taxes -- so expect to see that and that's why we've guided $400 million to $450 million, again, based on the estimates that we've projected for 2026.

Okay. Can we provide any update on Sibiri? That was a success story last year. talk about it today?

Sibiri continues to be a success. We continue to produce out of Sibiri production is up in Si to 3,000, 4,000 barrels of oil per day out of Sibiri. So Sibiri continues to provide us with good result in 2025 and 2026.

Thanks, Sam. Given the naira share price, are we considering a stock split... We consider a lot of things at the Board, but we have not made a decision on [indiscernible].

Could we give a bit more color about the relatively light EBITDA in the fourth quarter? What were the drivers of that versus consensus?

Okay. Thank you. So we had some headwinds in the fourth quarter with the downtime on Yoho, our production drop there. We also had some scheduled maintenance planned in the fourth quarter so that we could commission the gas exchanger. I think the positive there is that the impact of that scheduled maintenance will start to see that come through in 2026.

Can we give any indication of the exit rate we are for 2026 of production.

Exit rate, we are targeting -- let me -- this is also something that we need to just with the guidance. And if we stay with the guidance at the moment, I think in the course of the year, we will come back and refresh you with our exit rate that we forecast for the full year. But I think we are pretty confident with the guidance that publish as of today.

The resource update today, we had a big jump in gas, particularly E. Could we maybe talk about development of that in the 2030 plan? What are we saying about the gas upgrade in 2C?

Yes. The gas is actually about 4 fields, Idaho. Those 4 fields contributed to about 2 Tcf gross in terms of 2C uplift that resulted in technical maturity of those 4 fields and that underpin the development that just matured since we took over these assets that resulted in the optimization of the project.

What I'd say to that is that you're going to see a lot of convert as we bring more and more of the offshore gas on stream, obviously, we're working on the second pipeline to LNG as we speak. And if we start to take FIDs on these projects, we're looking at a pipeline opportunity into A stake to Q from EAP in the East. And if you start to bring on these projects, LNG, et cetera, well then a lot of those opportunities are sitting contingent and we will start to convert those to. So I would expect us to have a contingent into P2P upgrade over the course of probably this year and future years to come.

very good. Maybe one final one here. There's been some news about NMC potentially selling down some of the equity. Is that something Seplat can comment on?

We can't comment. It's not our process. We're always interested in growth business, but it's not -- we don't have any comment on.

Very good. So we've got quite a few questions there. Just a final check, Justin, have we got any more on the line there?

No, certainly not.

Okay. Perfect. Well, that's great. Just pass the I can hand over to Roger to close.

Yes. Well, thanks, everyone, for listening. I think we've presented some very strong results here today. We're obviously not just clapping on these good results. We're actually working very hard to deliver on the 2026. The next results coming out will be our Q1, which will come out towards the end of April. So thanks, everyone, for listening, and have a good day. Thank you.