Good morning and welcome to Seplat Energy Plc. full year results 2024. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session through the phone lines, and instructions will follow at that time. I would like to remind everyone that this call is being recorded. I will now hand over to James Thompson, Head of Investor Relations, to open the presentation. Please go ahead.
Thank you, Krista. Hello, everybody. Good afternoon. Good morning. Welcome to Seplat Energy's financial results for the full year 2024 and our first since the completion of the acquisition of MPNU. On the call today are our CEO, Roger Brown, CFO, Eleanor Adaralegbe, and COO, Samson Ezugworie. After the presentation, we will move straight to the Q&A. Before we just start, I would just draw attention to the forward-looking statement on slide two. Now I'll pass the call over to Roger. Over to you.
Thank you. Good morning. Good afternoon, everyone. We're delighted to come here with our full year 2024 results. If you look on the slide, we just highlight some of the operational financial highlights for the year. This is obviously now part of the enlarged group. We had, I think, 19 days of the Mobil Producing or Seplat Energy Producing, it's now called. It's not fully felt here, but you can see some of the impact. In terms of the production, we're delighted that we met guidance. We're in the middle of the guidance range. If you add in the impact of the Seplat new acquisition, it adds, it takes the 48,600 barrels of oil equivalent up to 52,000 almost 53,000 barrels of oil equivalent. That's obviously up in last year. Look at the reserves.
The reserve numbers are 2x with the acquisition. If you actually look at our existing assets, our existing onshore assets, we're seeing an organic reserve replacement ratio of approaching 200%, 176%. That is really an upgrade moving some of our contingent resources into reserves. That increase is on the basis of almost 80 million barrels of production. That is great for the existing business. MPNU brings on board a very sizable increase in reserves. Look at the adjusted EBITDA numbers. That says $539 million, of which $440 million is the contribution from our onshore business. For Seplat, it is almost $100 million for the 19 days. The final one here is around dividends. We have a lot of confidence in our business, a lot of stability. This is why we've increased our dividend.
We have moved our $0.15 a share dividend up to $0.165. We have paid $0.096 to date. Therefore, we are declaring a core dividend and a special dividend, which is in aggregate $0.069. It will be paid shortly after the AGM in May, assuming it is approved by the shareholders. That is a real confidence in terms of the business going forward. Next slide. Looking at, I will summarize our year of delivery in 2024. It was a big year for the company. You can see there, obviously, we completed the MPNU transaction on the 12th of December. That has increased oil production three times and two times against reserves. What we have seen since the acquisition is a very motivated workforce at Seplat.
It's about 1,000 people have come across and very excited to actually start to expand and grow these really prolific assets within Seplat. We'll talk about that in a second. Also, we have also seen in terms of delivery this year where we had previously predicted a decline post-acquisition. We're actually not seeing that. I think that decline has been abated. We'll start to talk about some of the growth we're going to be doing in those blocks. We completed three major oil and gas projects on our, we call it now onshore existing assets. That's Abya Yala, Siberia, and Seplat Gas Plant. Sam, our COO, will cover some of that in his slides. In terms of the drilling campaign, again, Sam will deal with this, but we've been very active with the drill bit this year.
We can start to see some big increases with 13 wells being drilled. It's the most active we've been since listing in 2014. In terms of the board itself, we continue to refresh the board. During the year, we had a new Chairman, a new independent senior INED, another new INED on the board. Of course, our CFO, Eleanor, came on as CFO in May this year or April, May this year. Pretty active from the board perspective. If we then look at Seplat itself, and we'd set a 100-day target post-CIC change of control on the 12th of December, we are in the middle of that. We're probably about 80 days through that. What I would classify that as being is it's been very active. In terms of those activities post 100 days, a lot of them have been completed.
The transfer across decoupling from the Exxon mothership into Seplat has been very smooth. It's worked very well. The staff are very motivated and ready to really grow these assets. In terms of them, what we're looking at now is obviously the integration. Of course, this year, we'll be working through with consultants on board to look at putting the two businesses together in a very integrated fashion and really look at the group and positioning it for the future. In terms of the 2025 budget cycle, we've just approved that through the board. There's a motivated partner that sees the real growth in these assets. We're delighted to say we've got full support to accelerate what we're doing in terms of the work program. You can see there on the right-hand side of the slide some of the operations.
Again, you can see an increase in production, and we'll work through that this year. Moving on in terms of transforming our business, let's just do a recap. Obviously, the ExxonMobil or the Mobil Producing Nigeria Unlimited transaction has brought four blocks: 67, 68, 70, and 104. It's a 40% interest. We have an almost 10% unitized interest in the Amunam field with TotalEnergies. It brings very significant infrastructure. You've got over 120 shallow water and offshore facilities, 1,500 km of pipelines, 190 producing wells. Importantly, you can see there are 413 idle wells. That's something we're going to focus on. There are three operated export terminals: EBO, Yuhu, and Bonny River Terminal. There is a broad range of facilities in the shallow water offshore with the idle limit of that obviously 100 km offshore. It's fairly shallow water.
What it is, is a closed loop system from wellhead right through to export of the oil. We control and operate all of that. That has really quite materially changed the business. If you then look at the foundation for growth, we have a massive launchpad for that. In terms of the subsurface, some of the best in the world subsurface. We have large proven oil and gas accumulations in the license area. I think this really is, we have said it before, a bit of a sleeping giant. I think when we start to wake this up, we are really going to see some real growth here. In terms of 2P reserve, 2C resources, world-class reservoir systems, you can see there in the bottom left some of the production numbers and reserve numbers against all these assets, correct material.
If I then look at the right-hand side and beyond liquids, if you look at the gas side, what we're going to be doing this year is really working with our reserve auditor to really narrow the gap between what we saw on the way in when we had CPR, which ERC did under the prospectus. Of course, that's limited what can be done around that process. Actually, what our management estimates are and what even Wood Mackenzie is carrying on this, which is quite a big delta between the 6 TCF you can see there in terms of 2P, 2C, and 3C up to effectively 14 TCF, which management estimates are and Wood Mackenzie. We're going to be spending a big part of this year working and narrowing that gap. We're very excited in the big upside potential, particularly in gas.
If you then look at the portfolio itself, and again, we talk about the change of risk profile of the business. If we compare the onshore, which is the existing business, with Proforma Seplat, which obviously includes the Seplat, we're moving from five offtake points to eight. Obviously, there's three new terminals. Third-party-owned export were 100% on our onshore business. When you can blend and combine the two, now 30% are third-party-owned and 70% are obviously operated by us. You can see there the onshore 0% operated, now Proforma 70%. Very different and a lot more control over the end-to-end production here. Evacuation routes were 76% for Cadence, now it's 55% QIT. Look at the export volumes. There's the three times, the 3X. You can see that on the right-hand side of that slide, you can see the exports by volume.
You can see a big chunk of it is obviously COI EBO, which is the onshore terminal, and Yuhu, which is the FSO on ML104. Significant reduction in reliance on third parties is really going to pay dividends for us into the future. On to the next slide, looking at growth opportunities. Again, this is low-cost, short-cycle growth opportunities. If you recall, we have 413 locked-in wells. A lot of that activity level this year is going to be at reopening wells that are previously locked in. There are other deep bottlenecking activities we can do. You can see that there, which is the EAP IGE, which is the Inlet Gas Exchanger Project. The equipment is in country, and it is going to be installed. That will have an impact on reserves and production.
We are going to be operating at least two jack-up barges this year, possibly more. We are looking to see how we can accelerate this. That has a meter term reserve addition and production addition and good payback with very good MPV volumes there. You can see some of the projects and where they are going to be EAP is really out in the east, and it is quite a prolific gas opportunity for us as well. On the next slide, I will just summarize before I hand across to Sam to run through some of the operations. If we then look at the longer-term growth in the offshore businesses, we dimension this under four areas. Infrastructure. Infrastructure really is about deep bottlenecking. We have some water handling constraints at the QIT terminal. We have some deep bottlenecking to do at the Bonny River terminal.
Those will then allow us to increase production and be able to handle the water, etc. That is something that's focused on this year. We put it 2026 plus, but really, we are looking at some of that now. Drilling. This would be beyond reopening wells. We're going to be looking at infill drilling and bringing up jack-up rigs to do that. What we need to do this year is obviously look at the subsurface, just making sure that we know to place the wells before we then launch that campaign. Again, we need to contract. Some of this, of course, we will talk about when we have a capital markets day in Q3. In gas, we're very excited with the gas. The gas has very, very big potential here from domestic gas to export gas through LNG.
That will be around also EAP and Yuhu. We are working with our partner NNPC to really advance this and start to develop the gas in the near term. Future field development, I think beyond getting the production up and looking at infill drilling, there is a lot of exploration potential here. Certainly, our regulator is very focused on ensuring that we actually have a long-term plan for the business, which does look at exploration. That will be probably 2026 plus. That just sort of whets the appetite of what is coming up in the future for us. Let me hand across to Sam.
Thank you very much, Roger. Very good morning, good afternoon, good evening, depending on where you are joining us from. Let me go a little bit deeper into sharing with us the operational performance in 2024.
Roger already highlighted the production performance in terms of numbers. We delivered almost 53,000 barrels of oil equivalent and 48.6 of those from our legacy business against the guidance of 46-52. Going beyond that, what is behind the numbers? In terms of oil growth, we delivered and brought on stream Siberia and Abya Yala fields. Siberia is currently producing at about 3,000 barrels of 100% JV oil. Abya Yala is also producing to storage tank. The plan is to ramp up Abya Yala to 5,000-6,000 barrels of oil per day in the second quarter of this year. In the year under consideration, we delivered all 13 wells that we planned in the year. Eight of those wells are currently producing in the level of 6,000 barrels of oil equivalent per day and 46 million scfd of gas.
Our gas delivery also got some very good boost in the year following the successful completion of the statutory turnaround maintenance of the Oben Gas Plant, where we also leveraged the opportunity of the turnaround maintenance to displace the diesel engines into gas generators. The turnaround was delivered in time and under budget. If we look at that and the SIGP project as well, where we brought in the module one of that unit in the last quarter of last year. Now ANOH also is fully ready to receive gas bearing the OB3 completion. We are now well positioned to deliver an additional 400 million scfd of gas to the domestic market, thereby positioning ourselves to meet the growing demand of gas in the domestic market. Our infrastructure in the year as well held out very well, underlined by favorable security outlook.
TFP zone four or zone six in the east returned to full 24-hour operation in the last quarter of the year. If you look at the western asset, we had 40 days of downtime in the TFP at the Trans Forcados pipeline, where this downtime was fully mitigated by the alternative line, the Amukpe-Escraos pipeline, bringing the overall losses on the line to barely less than 4%, which is the best in the year and in the period, actually, and in the recent history.
Lastly, our sustainability journey also continued to make good traction, where though our CO2 emission went up a bit because of the increased production out of the eastern asset following the return of TMP zone six and the shutdown we took during the turnaround maintenance, we also see good progress in the other end-of-routine flaring projects like the VEPO recovery unit in Amukpe, Oben, and Seplat, where all delivered in the course of the year. If you go straight then into the next slide, you will then see a massive transformation in our resource base following the ExxonMobil acquisition that happened in the end of the year. The headline message here is there is a very big scale. Our 2P reserve went up by 85%, and our 2C reserve also rose by 430%.
This brings an aggregate value in terms of combined 2P to 2C of in excess of 1.2 billion barrels of resource volume. If you look at the bottom right corner of this chart, you will see our CAPEX spend over the last three years, which shows consistent growth in the CapEx spend. This, in essence, demonstrates clear commitment on our side in growing and maximizing value from these assets. If we then go to the next slide, this is giving you a deeper insight into the production performance across all the assets in the course of the year. We delivered a 2% increase year-on-year compared to 2023. With the inclusion of SEPNU, our end-year performance ended up at 11%. In this case, you continue to see as well our continued drive in cost efficiencies and for cost of our operations.
The operating cost, if we peel off some, call it underlying OpEx that we incurred in the course of the year, we would have ended operating costs at about $10.50 per barrel of oil equivalent, which is actually very competitive in the operating environment where we are. Next slide is focusing on our midstream business performance. Our midstream business also continues to demonstrate a high level of resilience in the course of the year, realizing competitive gas price of $3.06 for 1,000 scfd and our full-year revenue of $125 million, which is a bit up from the previous year. Of note here is that with the completion of the turnaround maintenance of Oben, establishing its resilience, and now Seplat Integrated Gas Plant coming on stream and ANOH due to come on stream, we expect a major step change again in our gas performance in 2025 going forward. Next slide.
On this, Roger Brown highlighted the growth opportunities on the SEPNU asset. At this point, I will then take a few moments to highlight key activities and key growth opportunities that we have on the onshore side. Following the success that we have recorded in Siberia and Abya Yala, we now have planned three additional wells in Siberia and Abya Yala also ramping up to full potential in the second quarter of this year. The benefit of this is nearly 10,000 barrels of oil equivalent addition in our portfolio. With the eastern asset as well, we are going to resume drilling in the east following the availability of the TMP zone six. Anna and SIGP already highlighted why we focus on delivering the LPG products or the LPG projects, which are the remainder of our end-of-routine flaring projects in the course of the year. Okay.
Let me then go into the guidance for the year. Group guidance is also going to take a step change in 2025, given the integration of SEPNU into our asset. We expect 20,000 barrels of oil per day, year-on-year growth, which takes us to the top end of our guidance. The guidance for the group will be 120,000-140,000 barrels of oil equivalent. This is made up of 75%-80% of liquids and 20%-25% of gas. If you then dig deep into the onshore asset, our guidance is 48,000-56,000. This is split 57%, 43% liquid and gas, while SEPNU is 72,000-84,000, split into 88% liquid and 12% of gas in the course of the year. All right. I will end up with the outlook for CAPEX as well, which is on the next slide.
The importance here is to highlight that our strategy is, first of all, to stem the decline in SEPNU asset and return to growth first time in over 10 years. We have been on this asset now, as Roger highlighted earlier, for about 80 days. The early indications are very positive. We see quite a significant opportunity to focus and deliver more value in this asset in the course of the year. We will lay a strong foundation for growth in the short term. We will maintain OPEX activities to improve integrity and reliability and uptime. That will be our first and primary focus, while we then bring in the Well Work badge to commence operations in the second quarter of this year. In the second year, there will be Jack Jackal badge that will continue to drive integrity work starting from April this year.
It is important to also highlight that in this asset, we are going to take a little bit of some downtime because some of the integrity activities will require that we take some downtime. That is required at this point in time for us to be able to lay the serious foundation, the strong foundation for growth. Last but not the least, we have also included some long lead items for drilling activities in the CapEx guidance for the SEPNU activities for this year, while the technical work is ongoing to mature the subsurface opportunities to commence drilling starting from 2026. That is the highlight of the key guidance for the year. At this point, I'll be handing over to Eleanor, who will take us through the financials. Thank you very much.
Thank you, everybody. Welcome again to our call. Thank you for listening.
Our first slide here, just to highlight some of what Roger has already alluded to. Strong revenues, over $1 billion, including lifting that came in post-completion from our SEPNU asset. I think what is positive here is the commodity prices remained fairly high in 2024, and we benefited from that. Maybe not so much in the fourth quarter, but overall, our realized oil price ended at $80 per barrel. On adjusted EBITDA, with the introduction of SEPNU as well, that went up slightly. If you think about the business before SEPNU, compared to prior year, it was largely flat, but still very positive. I think we really benefited from increases in our oil production from the underlying business.
I mean, on the gas side, maybe it dipped slightly, but we had the benefit of slightly higher gas prices that made the revenue sort of supported the revenue growth that you see on the screen. Pre-tax profit, very positive. I mean, we did have some one-off items that I'm going to get into on the next slide. I think the most positive points on this slide is really our confidence on the outlook. This supports the dividend growth that we've highlighted. 10% year-on-year on total dividend. For 2024, it's $0.165 per share. On the next slide, some more details on the financials. You see on the oil revenue, it sort of highlights the impact of the additional liftings we got in Q4.
Gas revenue still exceeded our 2023 performance, mostly from, like I described, I mentioned earlier, the gas prices offset by slightly weaker production. Again, we did have some turnaround maintenance that happened on our gas plants in the year, again, part of showing up the quality of the gas production. Now we're beginning to see better performance even in the fourth quarter going into 2025. Total revenue, again, over $1 billion. Cost of sales, I think one thing that we would highlight, I think I'll highlight that in the coming slides, is we did have a number of one-off costs that impacted our cost of sales or our production costs and also our G&A. A lot of that is mostly tied to the transaction costs that were included as part of G&A. Normally, this would have come as part of a capitalized cost in the transaction.
Because of the nature of the acquisition, we had to report this in G&A. The bargain purchase simply is what you would call sort of a negative goodwill, but it is really the difference between the valuation on the books and the value of the asset. Positive there, it is a non-cash accounting impact on the books. Overall, profit before tax was quite significant after adjusting for the financing costs. On the tax side, we see some big jumps there. A lot of that is coming from SEPNU's post-completion tax. I will explain that in a bit more detail. Ending this slide really with the strong capital investment.
Again, one of the things we'll see in our business is that year-on-year, we've continued to invest in the business, drilling wells, growing production, arresting decline that we see happen on our existing business and part of what we're going to be doing on the SEPNU assets as well. We completed 11 wells with additional two wells. We completed 11 wells in 2024 with the additional two wells completed very early in January. Good cash generated from operations, again, impacted by some of the one-offs that I already mentioned. Q4 is where we would see the impact of the acquisition. There was quite a lot going on in Q4 ahead of when we completed the transaction. You see that on the next slide in the cash flow waterfall. Cash remains very strong.
We started the year with $450 million and ended the year with $470 million. I think the biggest impact, like I said, is in the fourth quarter of the year. We did a lot in getting the office ready for the new staff that we inherited, along with a number of other items, including the transaction costs. Also, we had some tax audits. The impact of that, the impact of that is showing on our Q4 performance. I think another, maybe one important point is also the lifting. I mean, we did have around $40 million, almost 500,000 barrels of crude on the underlying business that we see the cash came in in Q1. The impact of that is showing. I think it's all positive because everything that we did in Q4 was really around supporting the new business.
In addition, we inherited some net cash flow transactions from the SEPNU acquisition. All in, you see the impact of CapEx and proceeds from our other assets. Of course, what we paid in dividend is showing up on this slide. Again, part of what we've done to support the shareholder activity. We paid some of our debts and financed our debts around almost $130 million. Next slide, just going over to the balance sheet again, still maintain a very strong balance sheet post-transaction at $470 million in gross cash. Our gross debt doubled with the drawdown, the full drawdown of the RCF and the additional advance payment facility that we got from ExxonMobil to fund the transaction, along with $22 million of cash that we used to complete the cash consideration in December of $800 million.
I think what's to highlight here is on the leverage side, still very positive. We've maintained our leverage even with the gross debt because, again, the combined business increases our EBITDA. Net debt EBITDA numbers on a pro forma basis feel very much in line with what we've seen in our underlying business. You can see the diversified debt structure in the chart. The doubling of our gross debt is a combination of our senior notes and the RCF, along with the advance payment facility. The next slide is a slide I'll end with. It's really looking forward. I know there've been a number of questions around the cash taxes, especially with the historical performance of the MPNU asset. That historical information has shown that taxes have been around 85% on the cash flow from operations.
We're looking to sort of optimize that and bring that down in 2025 by really focusing on investing in the business, both onshore, both via CapEx and also OpEx. I mean, Sam talked about the investments we want to put into the towards drilling longer term, but there's quite a lot of investments in the operating expenditure. That's taking advantage of the tax opportunities there. Now, we are also looking to, on the PIA side, looking to convert SEPNU. We'll start the conversations with NUPRC in 2025, again, because of the transition and also the period while we were trying to acquire the asset. That request for conversion was not done, but we'll start that process. There are benefits there. Royalties are going to be a lot lower, and there are some advantages on the total tax side.
Now, for our existing business, we've progressed quite well, and we've gotten recent feedback from our regulator supporting our application. We are expecting to close that out in the first half of this year. On our debt structure, we have the RCF, which matures in June of 2025. Once we are able to refinance our 2026 notes, the RCF extends to the end of 2026. On the hedging side, we've been quite proactive. We've hedged our crude now up to the third quarter of 2025 in view of, obviously, the bigger business. We've assured, we've done assurances of that, and we're quite focused on doing that fairly quickly. Quite pleased that we managed to get that done. Maybe finally on this slide is sort of to pick up on how we've managed our working capital.
I think the JV partners have been, we've gotten real good feedback from the JV partners on cash calls, very positive in 2024. I think we've sort of seen a lot of the JV cash call performance very positive in the last two years, improved quite well. We are looking forward to those opportunities constantly improving in 2025. With this, I'd like to hand over to Roger to do the wrap-up. Thank you.
Thank you. Just to wrap up the last slide, I think the key messages here is that, obviously, the group now is much bigger, and it'll really unlock a number of material value creation opportunities. In terms of production numbers, there's going to be decent uplift in production. Now, this is an average greater than 20,000 barrels of oil equivalent a day working interest. This is an average.
This is really going to be largely the drilling campaign on the onshore assets, as well as really looking to reopen up shut-in wells in our shallow water offshore assets in SEPNU. The timing of that, we've been conservative in how we look at this. That should add quite significant production. In the bottom left, there is our low leverage. We're really running a fairly low leverage of 0.7x net debt to EBITDA, which is well below our in-house or company-approved target and well below the covenants in the debt. In terms of the reserves, we're looking at 2P2C. It's 1.2 billion barrels working interest, and it's probably more than that. The game will work through this year in really reconciling what we're reporting in the CPR and what the management estimates are. We do expect that to grow in terms of reserves and resources.
In terms of post-tax cash from operations, Eleanor has talked about some of the stuff we are going to go on the tax. Really, this is about investing and spending the money in the ground, and that then should reduce our effective tax rate accordingly. The company is well poised for growth, and it is going to be quite an exciting 2025 and onwards. That wraps up the presentation. Now I will hand it back to the operator for a Q&A. Thank you.
Thank you. Participants can submit questions in written format via the webcast page by clicking the Ask a Question button. If you are dialed into the call and would like to ask a question, please press * 1 on your telephone keypad to raise your hand and join the queue. We will pause for a moment to assemble the queue.
Our first question comes from Nikolas Stefanou with Redd. Please go ahead.
Hi, guys. It's Nikolas Stefanou taking my questions. I have a couple to ask on the operational side of things and a couple on the financial side of things. Just for the development plan on the offshore assets, I can sort of understand the sort of fiscal appeal of doing workovers in sort of like shutting wells, as well as kind of like the early sort of like payback times there. I want to understand a bit more. Are you targeting reserves there that are not really captured by the CPR? If you can give me a bit of background, those wells that are going to reopen, why were they shutting to begin with?
Was it in a period of kind of like low oil prices that were not very economic to kind of like have been running, and now you think it's sort of like more appropriate environment, or are there other reasons? The second one on the operational side, I just want to get an understanding. I think around 12% sort of the production from SEPNU will be gas. Where are you selling that gas, and what is the price you get for that? Thank you. Of course, some financial questions. Thanks.
Thanks, Nick. Okay. Just in terms of the development plan, obviously, we are looking to reopen previously shut-in wells. Maybe I start with that, and now I'll talk about some of the reserves, etc. In terms of why we shut in, we shut in for a whole host of reasons.
Let's put them in broad categories. One is bottlenecking. A big part of this is obviously mature assets are going to bring water with them. There was not the investment put into QIT for water handling. Therefore, when the additional water came in, there was a processing constraint at QIT, and therefore, the wells were shut in accordingly. There is plenty of storage at QIT, and again, we are looking at putting in together some projects to de-bottleneck that. We have done that existing at Seplat anyway in the past, and the team is very clear how to do that. Part of it is bottlenecking water handling constraints. There is the project, the IGE project we talked about, and I will not go into that in any level of detail. There are some back pressure issues in some of the wells, and again, we are looking at alternative solutions around that.
are other reasons, like some of the platforms, or some of the wellhead platforms have got aging infrastructure. Things like ladders and rails and stuff like that were rusting, and they were not replaced because Exxon was in divestment mode and has been for quite a number of years, so had no appetite to invest in it. What we are going to be doing with these barges is going around wellhead by wellhead, platform by platform, etc., and really fixing infrastructure and then reopening the wells accordingly. There is a plan around it. I mean, we are talking probably, I do not know, 10% of the locked-in wells, that is sort of the target for this year, but maybe it is going to be more than that. It is going to be quite a systematic process. We need to spend money on these assets.
We've showed that in our existing business, and Seplat's pretty well versed in how we do it. That'll be the focus this year. In terms of the reserves, and again, it's not so much, probably less on the oil side of things, but I mean, certainly, I think there will be some reserve upgrades. Really on the gas side, which the gas gets sold in through BRT, which ultimately goes into Nigerian LNG. It's about 100 million scuffs a day. There's obviously a project to increase that to about 170. Realistically, there was no gas solution, which means a lot of those gas are resources because there's no development plan. We're looking at a whole range of development plans, domestic gas plans, LNG, floating LNGs, etc.
Now, looking at the management estimates and looking at things that would map what they're carrying, there's quite a big delta. The problem is that when you go into these acquisitions, the constraint around the competent person's report is they have to assume that Exxon are running this into perpetuity. The stuff that Seplat will do, they couldn't assume that. Very little investment, decline rates, etc., no reduction in taxes and everything else or investments to reduce the effective tax rate. That is why you get quite a big delta between the two. The ability to look at the actual assets themselves is very limited. We will be working with a reserve auditor, Ryder Scott, this year and really going bit by bit with the team we have now, obviously with the Exxon acquisition.
The team is at Seplat, and we will work our way through that. We will narrow that gap, and that will then communicate that into our capital markets day. That is why we have set it for Q3, because we need to do that technical work and have the CPR relook at the reserves, etc. We are very confident that these resources are greater than we are projecting here, and also we will be able to convert them into reserves in the near term. In terms of gas pricing, again, it is a bit early in this, but realistically, at the minute we are supplying into Nigerian LNG and we are getting dollars for that, we would expect gas prices to be in the $2-$3 range, I think, long term.
That sits with our existing business, and there may be potential for uplifts on that into the future with more access to international markets.
Very clear. Thank you. The financial questions. Eleanor, these are probably for you, both of them. I saw there was this massive $200 million plus working capital built up in the fourth quarter. My understanding is that is related to the acquisition. I just want to know a bit more, what is the nature of that buildup? Is it sort of like something that could revert in 2025, or it's just kind of like maybe call it like a hidden acquisition cost? The other question is on the refinancing plans. My impression is that you do need to kind of refinance the notes by March and there's like three months in order to extend the RCF.
Is the idea to kind of do one refinancing for both the RCF and the notes, or are you thinking of doing maybe two sort of like two different bonds or a bond and something else? What is the thinking about refinancing? Thank you. All right.
Thank you, Nick. On the first question, and you're right, we did spend significant cash flows in the fourth quarter to support the acquisition. Again, a lot of it was getting the office ready. We had systems, software, insurance, a lot of things that will allow us not to have disruptions. That's where the focus was, along with a number of one-off items that you would have seen in OPEX and G&A around things like gas flare. We also had fairly significant underlift in the period, which I think we would catch up in the first quarter.
A lot of it is not, that's why we call it one-off, is not what we expect to see in 2025. A lot of this is really associated, most of it associated with the acquisition. On the second point, yes, as we've reported, our notes become current on the 1st of April 2026. The RCF as well will get also at the end of June of 2025, also expires then. If we get the notes refinanced, then there's the opportunity for the RCF to be extended to the end of December of 2026. We have until the 30th of May anyway to consider that. Yes, that is definitely in our plan to consider that. Again, if you look at what we've shared already, you could see our maturity balance sheet is still very strong. We're very confident about the outlook.
Again, depending on the markets, what the market's saying, we will be looking to come into the market. Thank you.
Thank you.
If you would like to ask a question, please press * 1 on your telephone keypad. There are no further questions on the conference line. I will now hand over to James Thompson, Head of Investor Relations, to read out the written questions.
Thank you, Krista. Yeah, we do have a few. Thank you very much for sending those in. If you have any more, please continue to do so. Maybe I could start. We had a few questions in terms of kind of capital allocation and the dividend. As a bigger business, Roger, how are we sort of thinking about the balance between growth, the dividend, and obviously the debt piece, and specifically maybe the dividend?
Obviously, investor was pleased to see the uplift today. How do we think about sort of 2025 in the current environment?
Okay. On the dividend itself, and you're seeing an uplift in the dividend. As we communicated previously, we have certain covenant constraints on our debt package, particularly in the bond. We are limited to how much we can pay out as dividend. It is the higher of $0.15 a share or 7% of the market cap, which is why you've seen us increase it slightly. As Eleanor has indicated, obviously, we're looking at refinancing opportunities and that. One of the aspects will be having an amendment to some of the covenants, which will allow us to put in place a progressive dividend policy. That's what we want to be doing.
We spent a lot of time in the capital allocation, just thinking about it as a board and what makes sense for the company going forward. Clearly, you can see massive growth opportunities here. Now, the assets themselves can fund that growth opportunity. You can certainly see that they will be, all the assets will be self-funding. On the gas side of things, it's a bit early to be saying how we do this. It looks like some of the gas opportunities we should be able to do is not requiring a massive amount of investment for us as a business to monetize in the near term. A lot of the capital allocation will be focused on, obviously, growth, maintenance, integrity work, looking at advancing the gas and having a progressive dividend policy.
We will, probably later this year, we actually will be coming out with some changes to that. We'll communicate this to the investors over the course of this year. Really, the focus in this year is, at the minute, to get SEPNU working and really growing and then really setting the future for the business on a long-term basis. There will be changes that will come. Again, we've said capital markets day, we're debating whether we have that earlier in the year. What we want to be doing is setting the capital markets day, the real future, the five-year plan, and capital allocation will be part of that. Watch the space. We'll be coming through every quarter with some uplift, some future projections, etc. The bulk of it will really come in Q3 in the CMD.
Great. Thanks.
We've got another one here. Thinking about the first 100 days of the business, could you maybe kind of elaborate on any of the positive surprises that might have come through it compared to December and going into this now that you've had a bit of a chance to look at the assets firsthand?
Yeah. I think for us, I mean, obviously, we look at this carefully. We obviously signed a sale and purchase agreement back in 2022. We were very limited in what information we could get because of the court case and the arbitration between ExxonMobil and NNPC. There was no doubt about it that these are first-rate, the best subsurface in the world. These assets, I mean, I think 1,400 sq km of acreage, full supply system end-to-end.
I think one of the upsides being here is, I don't know why we have challenges, but it's just the personnel that came across. One of the things that you worry about is just the morale because it had been suspension mode for quite a number of years. This has really pleasantly surprised us. There's a thousand staff I've come across really fired up. They are really grabbing opportunities. I think in a way, they know what these assets can do. Quite a number of people in the leadership team and just below leadership team were in the company in the early 2000s when the company was heading at that point on its way to a million barrels a day. Quite a number of them were drilling the wells, etc. They know what's possible.
Now having a shareholder that is absolutely 100% focused on Nigeria that is really going to spend the money and grow it, the enthusiasm is very good. I also think, also to add to that, the interaction between the Seplat existing staff and the new, it's almost as if they've been together forever. I think there's a really good camaraderie there. I think, yes, subsurface and technical and all that sort of stuff determines the future. I think also it's the culture, it's the people. The enthusiasm around the people will really deliver that. We can see it already. I mean, we were expecting some drop in production. We're seeing an increase in the production. We are absolutely seeing an enthusiasm to grow this very big. Very good.
Thanks, Roger. We have a few questions on the tax side of things, Eleanor.
Can we provide any kind of guidance in terms of, obviously, outlook for tax rates for the year, the impact of the investment that is being made in 2025, provide some more color effectively around the effective tax rate maybe between P&L and also kind of cash tax rates as we go through this year?
Thank you, James. Thanks for the question. I think, like I said, we would be working towards bringing the tax rates down. I think the focus for us, as we've been talking on this call, is really building the foundation again, focusing on integrity. You would be seeing, especially when we start releasing our performance, that a lot of this is going into OpEx, some very important projects and work we need to do that are really short-term generating oil, bringing the wells back on stream.
We are even bringing in Jacob badges to do that. The focus really is on building the business and also starting to provide for drilling in the coming years. I think we are focused on this. We are quite keen on bringing the cash taxes down. Again, the more we build the business as a whole, the more that we pay the right taxes to the government as well as managing the business more effectively. What I can say is that we will be obviously bringing the cash taxes down in 2025 compared to what we saw, which was around 85% in the past three years. I mean, by double digits, we will be double-digit percentage. We will be bringing that down. We will guide as we go on.
The more that we understand the business, again, there's also a focus on trying to convert this to PIA. There are some benefits there. It will take some time to do that for our existing, for the underlying business. We started the process on the PIA conversion in 2022. Just recently, we are getting to the point where NUPRC is looking to approve this. There are quite a number of moving targets. I think what to focus on is the fact that we're bringing investments back into this thing. We've done that historically. Anytime we've taken assets from IOCs, I mean, we've worked them, invested. Long-term, this is what would ultimately build the shield and the capital allowances that we need to have a more efficient business. Thank you.
Thanks, Eleanor.
Maybe pivoting back to the onshore business question here, the legacy business, Seplat onshore production is looking to go over 50,000 barrels a day this year. First time being up there for a little while. What are the main drivers there? Can we say anything about exit rates? Also rolling into this in terms of ANOH and our thinking about ANOH for 2025, there's continuously some challenges there. What are we doing to avoid kind of downside outcomes of continued challenges with the OB3 line? Maybe Sam, you could pick that one up.
Yeah. Let me deal with that. Thank you, James. Thanks for that question. On the onshore side, we've continuously built some level of resilience within the assets. Operational efficiency, driving operational efficiency, and using technology to ensure that we don't incur unnecessary downtime has been a key driver.
What we're also getting a very good handle of is making sure that our export route systems are also very resilient in the course of the year. If you recall, prior to this past year, 2024, we had three years running where we had failures in the export systems in the third quarter of the year. That did not happen in 2024. Now, with leveraging the government security agencies and the government set up on the security, you will have also seen that the losses on the line had now gone to not just single digit, but somewhere 3.4% in the whole of the year. Those are the key things that we are driving, making sure that operationally we are stable. The export route system that used to be a challenge, we also maintain some level of resilience there.
In terms of exit rate for the year as well, we actually intend to exit pretty high with ANOH coming on stream. On the legacy business, we see a potential to go up to 70,000 barrels for an equivalent. And then on the SEPNU side, we have a potential to go somewhere around 80, 90. So overall, we have quite a strong exit rate for the year because we intend to run a very operationally efficient business because of the year. That's the key outlook.
Thanks, Sam. Thanks, Sam. We've got any more on the call? Anyone on the line? Okay, not at this point in time. Maybe we could touch back on we got some sort of granular points. Obviously, we're given CapEx and OpEx guidance for 2025.
Is there anything more we can say maybe around beyond that in terms of changes to OpEx, obviously, optically a bit higher than we've had historically? What can we say about CapEx, sort of more longer-term outlook, I guess, that's principally to do with the offshore?
Okay. Maybe I'll just pick up on that one. I mean, we have guided $14-$15 OpEx per BOE for 2025. I think one thing to highlight there is around $4 per barrel is very much focused on maintenance, what would normally sort of be maintenance CapEx type activity. We need to do that in 2025 in the short term. I think going forward, we should be sort of looking to bring that down and sort of staying around sub-$10 per BOE on our business. That's always been our drive and our target.
We're hoping to get to that in the medium term. More importantly, what we've said on this call is CapEx is going to be quite key for us longer term. We need to start building CapEx activity, drilling wells. The true value of this business, we'll start to see it combined with bringing back a lot of these idle wells. I think the opportunities are huge. Seplat historically has been a low-cost producer. In the last two years, there have been a number of one-offs, but now we're going to stabilize it a lot more. We'll start to see a lot of these metrics coming down. It is a very, very positive outlook to the future. Thank you.
Thanks, Eleanor. We've got another one in terms of hedging strategy, minor point, plans for 2025.
I mean, obviously, we put some of that on the slide and just hedging strategy going forward.
I think right now, pretty much the same. I mean, the focus for us is to ensure the downside. I mean, these are simple puts that we've put in place. We've done that historically. We'll continue to maintain that subject to any changes or discussions with our board. Thank you.
Okay. That covers most of the questions we've had on the line. Actually, one more here, just in terms of granularity. Maybe another one for you actually, Eleanor. Can we say anything in terms of unit cost, in terms of G&A? Yeah.
Yeah. I mean, so for G&A, I mean, we'd always want to be sub-5, lower than 5. I think isolating all these one-offs, G&A is something that we'll continue to should remain fairly flat on our combined business.
We can sort of share more on that as we share our results quarter- on- quarter. Thank you.
One bit more of an oblique one here, but maybe more in terms of geopolitics, Roger. Have we got, it's a bit of a volatile environment out there at this point in time with new regimes, particularly in the U.S. How do we see that affecting Seplat, if at all?
Yeah. I think we agree. I guess we design our business to run through every cycle. If you're a producer, that's what you need to be able to do. We've seen real variety of oil price. COVID, we saw $10 a barrel. When we design our business, our business, we're able to, because we're short-cycled, actually dial it up, dial it back as we need to. We've proved that in the past. That won't change.
Obviously, with the big focus on cost, cost control, efficiencies, etc., and with obviously SEPNU acquisitions, we have a lot more control end-to-end. I think that will then obviously change the risk profile of the business. Gas is going to become more and more prevalent in our business going forward. That is obviously decoupled largely to the oil price. On a macro level, that is where we are in terms of running our business. We had predicted a softening of oil prices this year. Eleanor's covered that we obviously continue to hedge as a downside protection.
We run our budget at $70 oil, but we run a range of different scenarios, 60 and below, and see how the business is going to react to that, looking at breakevens, etc., and low leverage for us as a business to make sure that we can continue to operate in all sorts of cycles. It is a long answer to your question, but we can't predict what's going to go in the future. We've seen what's happening with OPEC. We've seen what's happening in the U.S. on the macro side of the business. We're armed for lower oil prices this year. I think over time, as a mix of our business changes and gas is going to be a much bigger part of our business in the future, I think we're going to be set up to manage it. It's a dynamic process.
But we're not overly concerned where we are at the minute. We'd obviously love higher oil prices. Everyone would. The reality is we're already armed and ready for lower oil prices. Very good.
Thanks, Roger. That covers most of the key topics and the questions. Maybe I can pass back to Krista if there's any more from the call.
As a reminder, if you would like to ask a question, please press *1 on your telephone keypad. We have no further questions on the phone at this time. I will now turn the conference back over to Roger Brown for closing remarks.
Thanks, everyone, for listening. Thanks for those questions. We're looking forward to an exciting 2025 and beyond. We are obviously coming out with our Q1 results towards the end of April. Again, we will be updating the market accordingly.
We'll probably tighten some of those guidance ranges as we go throughout the year. Obviously, working forward and looking forward to a cap of markets day as early as we can, but it looks like indices reading. Thanks, everyone. Have a good day.