Seplat to boost shareholder payouts with $1 billion dividend plan

Seplat Energy, a leading Nigerian oil and gas company, has pledged to hand investors $1 billion in dividends to shareholders over the next five years, marking its boldest promise yet to investors.

The new policy, unveiled Thursday, commits Seplat to return between 40 and 50 percent of free cash flow to investors from 2026 through 2030. That equates to an average of $200 million in dividends annually. The company also introduced a minimum payout of $120 million a year — or five cents per share quarterly — as long as Brent crude prices stay above $50 a barrel.

For a company that has always paid dividends, the announcement represents a step-change. Seplat has already returned more than $700 million since its 2014 listing in Lagos and London, but executives say the expanded resource base following last year’s purchase of Mobil Producing Nigeria Unlimited gives it scope to reward investors more generously while still funding growth.

“We set out our roadmap to 2030, our vision for the medium term which will see us materially grow production and cashflow to drive significantly enhanced shareholder returns,” said Roger Brown, Seplat’s chief executive.

Seplat plans to spend between $2.5 billion and $3 billion over the same period to drill as many as 150 wells and develop up to three gas projects. The company has guided that efficiencies should push its cost per barrel down to about $10 by the end of the cycle.

Independent reserve audits support the more ambitious dividend policy. A recent review of Seplat’s offshore assets showed proven reserves climbing to 551.7 million barrels of oil equivalent from 394.6 million, while contingent resources leapt nearly fivefold. Across the group, proven reserves now stand at just over one billion barrels, with combined proven and contingent volumes of 2.3 billion barrels.

Still, the payout plan is conditional. Seplat’s forecasts assume oil averaging $65 a barrel, natural gas at $2.75 per thousand cubic feet, and a net leverage ratio capped at 1.5 times earnings. A sharp drop in prices or operational setbacks could alter the outlook.

Investors will see an immediate uptick: the company said its third-quarter dividend for 2025 will rise 10 percent to five cents per share to align with the new base commitment.

Selling to NNPC

Meanwhile, Seplat is in talks with the Nigerian National Petroleum Company over a possible 10 percent sell-down in their joint venture, which would hand NNPC a majority stake. Seplat stressed that even if that deal goes ahead, the dividend policy — including the $120 million minimum — will not change.

The move underscores Seplat’s dual challenge: to persuade investors that Nigerian oil can deliver reliable returns, and to deliver the steady cash flows required to make good on its $1 billion promise.