Seplat Energy: A High-Cash-Flow Growth Story in Africa's Energy Sector

In the dynamic landscape of African energy, Seplat Energy Plc has emerged as a standout performer, combining operational excellence with a disciplined approach to shareholder returns. The company's recent financial and operational results underscore its transformation into a high-cash-flow entity, positioning it as a compelling long-term investment. By leveraging strategic acquisitions, gas monetization projects, and a robust dividend policy, Seplat is not only reshaping Nigeria's energy sector but also delivering tangible value to its stakeholders.

Strategic Operational Execution: Scaling Production and EBITDA

Seplat's operational execution has been nothing short of remarkable. For the nine months ended September 30, 2025, the company reported a 185% year-on-year surge in production, achieving an average working-interest output of 135,636 barrels of oil equivalent per day (boepd) according to a Guardian report. This growth was driven by the successful integration of Mobil Producing Nigeria Unlimited (MPNU) assets, which added 33,400 barrels per day in gross capacity through an idle well restoration program, as noted in the Guardian report. Offshore production, accounting for 60% of total output, has become a cornerstone of Seplat's operational efficiency.

The financial implications of this growth are equally impressive. EBITDA for the period surged to $1.11 billion, a 190% increase year-on-year, reflecting strong cost management and higher production volumes, as reported by a BusinessDay analysis. This expansion was supported by operating cash flow exceeding $1 billion, enabling Seplat to reduce net debt by 43% and fund aggressive shareholder returns, as noted in a BusinessDay article. Such performance highlights the company's ability to convert operational scale into financial resilience.

Shareholder Returns: A Dividend Policy with Momentum

Seplat's commitment to rewarding shareholders is evident in its bold dividend policy. For the same nine-month period, the company declared a total dividend of 7.5 U.S. cents per share, comprising a 5.0 U.S. cents base dividend and a 2.5 U.S. cents special dividend, as reported in the Guardian report. This represents a 63% quarter-on-quarter and 108% year-on-year increase, far outpacing many peers in the sector. The payout ratio for Q3 2025 stood at 51%, indicating a balance between reinvestment and returns, as noted in a SimplyWall.St page.

This approach is underpinned by Seplat's strong cash flow generation. With operating cash flow exceeding $1 billion, the company has demonstrated the capacity to sustain and even accelerate dividend growth without compromising its financial flexibility. As one analyst noted, "Seplat's ability to deliver rising dividends while reducing debt is a rare combination in the energy sector," as reported in the BusinessDay article.

2030 Roadmap: Gas Monetization and Long-Term Value

Looking ahead, Seplat's 2030 roadmap offers a clear vision for sustained growth. The company aims to achieve 200 kboepd working-interest production and deliver $1 billion in cumulative dividends, according to the Guardian report. Central to this strategy is the development of gas monetization projects, including the ANOH gas plant, which is on track for first gas in Q4 2025, as noted in the Guardian report. This project, along with the company's Liquefied Petroleum Gas (LPG) initiatives, is expected to unlock significant value.

The ANOH gas plant alone is projected to generate $6 billion in cumulative cash flow by 2030, assuming a $65-per-barrel oil price and 200,000 barrels per day of production, as reported in a Semafor article. Meanwhile, Seplat's LPG ventures have already demonstrated their potential. For instance, Dorian LPG Ltd., a subsidiary, reported $124.1 million in Q2 2026 revenues and declared an irregular cash dividend of $0.65 per share, returning $27.8 million to shareholders, as noted in the Guardian report. These initiatives not only diversify Seplat's revenue streams but also align with global trends toward cleaner energy.

Conclusion: A Compelling Investment Thesis

Seplat Energy's combination of operational execution, disciplined capital allocation, and a forward-looking 2030 roadmap makes it a standout in Africa's energy sector. The company's ability to scale production, expand EBITDA, and deliver rising dividends has already transformed its financial profile. With gas monetization projects set to drive the next phase of growth, Seplat is well-positioned to deliver both cash flow stability and long-term capital appreciation. For investors seeking exposure to a high-quality African energy play, Seplat offers a rare blend of resilience and ambition.