Seplat Energy Reports Strong Q1 2026 Results, Increases Dividend to 9.0 Cents Per Share

Gas and NGL growth give Seplat another leg of support

There were a couple of genuine growth markers in the update. First gas at ANOH arrived in January 2026 and contributed working interest volumes of 17.0 mmscfd, with a planned increase from 2Q 2026 onwards. NGL production also jumped, with working interest output of 9,802 bopd versus 3,376 bopd a year earlier.

NGLs are natural gas liquids, products like propane and butane that sit between gas and oil in value terms. Stronger NGL output is useful because it broadens the revenue mix and reduces reliance on plain crude volumes.

Seplat also said the Yoho restart is on track for 2Q 2026 and the Oso-BRT 1 gas expansion project remains on track for 3Q 2026 start-up. If those milestones land on time, the second half should look stronger operationally than the first quarter did.

Seplat financial results: revenue rose, but costs were the weak spot

Revenue increased to $840.7 million, up 4% year on year, helped by a higher realised oil price of $86.16 per barrel. That is a solid result given lifted volumes were lower at 8.7 million barrels versus 9.9 million barrels a year earlier.

There is one nuance worth flagging. Reported revenue included an overlift of $92.0 million, versus $53.5 million in 1Q 2025. An overlift is when a producer sells more crude cargoes in the period than its underlying entitlement. It is a normal industry accounting feature, but investors should remember it can make one quarter look stronger than another.

The weaker line in this update was cost. Unit production operating cost came in at $17.1 per boe, above Seplat’s guidance of $13.5-$14.5 per boe and up from $12.6 per boe in 1Q 2025. Management blamed accelerated planned maintenance at Yoho and lower volumes in the quarter, and said costs should normalise in later quarters.

That higher cost base fed straight into EBITDA, which fell 7.3% to $371.3 million, with margin at 44%. Operating profit dropped 10.4% to $213.5 million and profit before tax fell 20.2% to $165.6 million. Interestingly, profit after tax rose 62.7% to $37.9 million, but the detailed drivers of that swing are not disclosed in this announcement.

Cash generation and debt reduction are the standout positives

This is where the result gets more convincing. Cash generated from operations rose 10% to $337.9 million, while end-March cash at bank increased to $461.7 million from $332.3 million at the end of 2025.

Net debt fell to $531.6 million from $673.0 million at year-end. Net debt to EBITDA improved to 0.43x from 0.53x. That leverage ratio is a simple measure of how many years of EBITDA would be needed to cover net debt, and lower is better.

Seplat also refinanced and upsized its undrawn revolving credit facility to $400 million, cutting borrowing cost to SOFR plus 4.5% from SOFR plus 5% plus CAS. Management says that is a saving of 76 basis points. In plain English, the balance sheet is getting stronger and cheaper to fund.

Seplat dividend increase to 9.0 cents per share: why income investors will care

The headline investors will probably remember is the dividend. Seplat declared a 1Q 2026 dividend of USD 9.0 cents per share, made up of a USD 5.0 cents base dividend and a USD 4.0 cents special dividend. The total cost is about $54 million.

That is up 8% quarter on quarter and a hefty 96% year on year. You do not usually see that sort of increase unless management feels pretty comfortable about cash flow and balance sheet strength. On that basis, the dividend move sends a strong signal.

Seplat also highlighted its put-option hedge strategy, saying it preserves 100% of price upside. In simple terms, that means the company has downside protection from weaker prices without capping the benefit if oil prices rise. In a volatile market, that is a useful set-up.

What matters most for Seplat shareholders in the 2026 outlook

Guidance was reiterated across the board. Production is still expected at 135-155 kboepd, capex remains guided at $360-440 million, and unit operating cost guidance stays at $13.5-$14.5 per boe.

That tells me management sees the first quarter as a temporary wobble rather than a change in direction. The big question is execution. Seplat now needs to prove that April’s stronger production, the Yoho restart, and ANOH ramp-up can translate into better second-quarter and second-half numbers.

There are also a couple of softer positives that should not be ignored. Carbon emissions intensity improved 13% year on year to 41.6 kg CO2/boe, and the company remained lost time injury free in the quarter, taking total hours without LTI to more than 9.1 million. Those are not the figures that move the share price on their own, but they do point to a business improving operational discipline.

My take on the Seplat Energy Q1 2026 RNS

I think this was a good update with one obvious blemish: costs. The production miss was frustrating, but it was tied mainly to third-party pipeline downtime rather than an apparent deterioration in the asset base. April’s rebound makes that explanation more believable.

The strongest parts of the release were cash flow, debt reduction and the dividend increase. When a company is producing strong free cash flow, deleveraging, refinancing more cheaply, and paying shareholders more, that deserves attention.

The catch is that Seplat now has to deliver on the promised normalisation. If operating costs stay high or if project timing slips, the market may be less forgiving next time. But based on this RNS alone, Seplat looks like a company that had a messy quarter operationally and still managed to strengthen financially – and that is usually a decent place to start.

• Positive: Dividend up to USD 9.0 cents/share, strong cash generation, lower net debt, April production recovery.
• Negative: Unit operating cost of $17.1/boe was above guidance, EBITDA and profit before tax fell, and lifted volumes were lower year on year.
• Key watchpoint: Delivery of Yoho restart, ANOH ramp-up and a return to guided cost levels.