Moody’s Ratings Changes Seplat Energy’s Outlook to Positive
Moody’s Ratings has changed the outlook of Seplat Energy Plc (Seplat) to positive from stable and affirmed the B2 long-term corporate family rating (CFR) and B2-PD probability of default rating (PDR).
Seplat’s operations are based in Nigeria, and the rating action follows our decision on 28 August 2026 to change the outlook on the Government of Nigeria to positive from stable, while affirming its B3 long-term foreign-currency and local-currency issuer ratings.
Moody’s said the rating action on Seplat reflects the change in the outlook for the Government of Nigeria from stable to positive. Seplat’s credit profile is closely linked to Nigeria’s economic, political, legal, fiscal and regulatory environment.
Accordingly, its rating remains constrained by the lower of Nigeria’s foreign-currency country ceiling of B2 and the sovereign rating of B3, reflecting the company’s ongoing exposure to sovereign-related risks.
Seplat’s operating and financial performance has remained robust, benefiting from the stronger oil price environment since the escalation of the geopolitical conflict in the Middle East in early 2026.
The company has also continued to deliver production growth, with average daily production rising to 139.5 thousand barrels of oil equivalent per day (kboepd) in the six months ended June 2026, a 4% increase against the prior year.
Management targets further production growth to 170 kboepd by 2030, taking into account the recently announced 10% divestment of the Seplat Energy Producing Nigeria Unlimited (SEPNU) assets to Nigerian National Petroleum Company Limited (NNPC).
Credit metrics have improved materially since the completion of the acquisition of Mobil Producing Nigeria Unlimited (MPNU), now known as SEPNU, in December 2024.
Moody’s-adjusted debt to EBITDA declined to 0.6x for the twelve months ended June 2026 from 3.0x at year-end 2024, while Moody’s-adjusted net debt to EBITDA improved to 0.3x from 2.1x over the same period.
“We expect leverage to remain low and comfortably within the company’s stated target of less than 1.5x net debt to EBITDA over the next two to three years, even under a materially lower oil price environment”.
Seplat’s retained cash flow (RCF) to debt ratio strengthened to 70% for the twelve months ended June 2026, up from 7% in 2024, and we expect this metric to remain robust over the next two to three years, supported by strong cash generation and disciplined financial policies.
The B2 CFR continues to reflect the company’s leading exploration and production (E&P) position in Nigeria, supported by long-dated oil and gas field licenses that provide visibility over its operations.
This includes its large reserve base, as evidenced by a 2P reserve life of around 18 years, alongside a clear plan to materially increase production over the next five years.
The rating also considered Seplat’s growing gas business, with ongoing investments expected to increase the share of gas in the revenue mix over time, providing some insulation from oil price volatility through contracted revenues and benefiting from a lower tax burden, as well as strong credit metrics and prudent financial policy.
Moody’s said the rating is constrained by the company’s exposure to Nigeria (B3 positive) and its political, legal, fiscal and regulatory environment; exposure to oil price volatility and highly cyclical market conditions.
The constraints include a degree of operational and asset concentration in the Niger Delta that increases the company’s event risk; significant capital investment requirements over the next five years to monetise its large 2P reserve base, and related execution risks; and foreign currency transfer and convertibility risk stemming from the requirement to repatriate proceeds from oil sales to Nigeria within 90 days of receipt for a short period, typically 24-48 hours.
The positive outlook reflects the expectation that Seplat will maintain solid credit metrics over the next 12–18 months, supported by continued high oil prices, a larger reserve base and robust liquidity, despite increased capital spending and dividend distributions.
The outlook also aligns with the positive outlook on the Government of Nigeria, reflecting Seplat’s credit linkages to the sovereign given its exposure to the country’s political, legal, fiscal, and regulatory environment, Moody’s said. Crude Oil Prices Decline as Trump Plans to End Iran War
