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Why Seplat Energy Stock is a Top Buy Among NGX 30 Firms

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Seplat Energy Plc, which enjoys a rally in crude oil price, stands out among Nigerian most liquid and capitalised firms as it recorded the fastest profit expansion while its shares have also gained the most so far.

The biggest indigenous oil and gas firm in Africa’s largest economy by market capitalisation saw net income surge by 143.53 perc4ent as at September 2022, according to data gathered by MoneyCentral.

That compares with FBN Holdings profit expansion of 123.47 percent; Nigerian Breweries (+80.06 percent); Dangote Sugar, (+60.07 percent); Okomu Oil, (+55.56 percent); Sterling Bank, (+41.56 percent); Transcorp, (+41.38 percent); Stanbic IBTC, (+38.14 percent); Fidelity Bank, (+31.86 percent); MTN Nigeria , (+22.12 percent); Nestle Nigeria, (+19.56 percent); Nascon Allied, (+19.31 percent); Union Bank of Nigeria, (+16.74 percent); Custodian Investment, (+14.29 percent); Access Bank, (+12.27 percent); Lafarge Africa, (+11.15 percent); United Bank for Africa, (+10.94 percent);m Zenith Bank, (+8.55 percent), and Guaranty Trust Holding Company (+0.73).

The ones that saw a drop in net income are: (-45.86 percent); Guinness Nigeria, (-32.03 percent); Dangote Cement, (-23.41 percent); BUA Cement, (-43.80 percent); Total Energies, (-6.58 percent), and Airtel Africa (-1.49 percent).

The stock prices of Seplat and oil majors across the globe are among the best performers on their various exchanges as rising crude oil price on the back of the Russian invasion of Ukraine added strength to earnings growth.

That is on top of the reopening of the economy or relaxation of the lockdown measures imposed by the government across the globe to curb the spread of the coronavirus pandemic.

Brent crude oil price, with which Nigeria’s oil is traded, surged to as high as $130 a barrel on March 7 and now sells for $74.46 per barrel.

Seplat shares have gained 61.54 percent as at November 11, 2022, outperforming the NGXASI index of 11.33 percent.

The NGXASI oil and gas has a year to date (YTD) return of 28.34 percent, the best sector performance so far.

The company’s balance sheet remains strong, with good liquidity and a solid cash flow position means it can finance drilling activities, pay debt, and reward shareholders in the form of dividend payment.

The oil and gas giant received total proceeds of $10.8 million under the revised OML 55 commercial arrangement with BelemaOil to monetise 298.4 kbbls of crude oil.

In 2022, sabotage along the Nembe Creek Trunk Line and the Trans Niger Pipeline affected recovery, with theft factors ranging from 30% to 90%.

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