Posted by Chris Ugwu
Investors of three top oil and gas companies quoted on the Nigerian Stock Exchange (NSE) gained N95.288 billion in the first seven trading days of June, following gradual stability recorded in foreign exchange and other macro-economic sentiments. Investors of these major oil companies quoted on the Exchange had reacted positively to the Federal Government’s new policy on forex.
The trio are Seplat Petroleum Development Company, Forte Oil Plc and Total Nigeria Plc. Specifically, checks by New Telegraph showed that Seplat, which is quoted on both the Nigerian and London Stock exchanges and currently occupied the leading position in terms of share price with N468.56 per share, led the top three league with a gain of N65.681 billion or 33.12 per cent to close at N264.007 billion on June 9, 2017.
This is against the opening balance of N198.326 billion at the beginning of trading in June. Forte Oil Plc followed with a gain of N23.835 billion to close from N59.914 billion to N83.749 billion last Friday, accounting for 39.78 per cent growth.
Total Oil Plc. which occupied the second position in terms of share price with N282.00 per share, trailed with a gain of N5.772 billion or 6.4 per cent, from N89.973 billion to N95.745 billion during the period under review. Foreign and local investors have renewed interest on the oil and gas stocks, which was unprecedented in recent times.
Before the recent action by government, the sub-sector had witnessed persistent sell pressure as the price of crude dropped on concerns that measures the Central Bank of Nigeria (CBN) put in place to stem capital outflows would hinder their ability to sell their holdings in the country.
Forte Oil Group Executive Director, Finance & Risk Management, Mr. Julius Omodayo-Owotuga, while addressing financial journalists at a news conference in Lagos, said: “What we have seen recently is that there is renewed foreign interests on the shares of the company, when the country was battling with the knotty issues of forex, we saw a sell down on our shares, but with the recent new FX windows, the shares has been gaining.
“Interests of foreign investors in any country are mainly on capital gains, that is why whenever there is an issue they are always the first to exit.
The downstream businesses were practically operating below expectations because of FX. The situation impacted the share prices negatively.”
Market analysts also believe the recent rally witnessed on the shares of Seplat was fuelled by the operational update issued by company on the reopening of the Forcados crude oil terminal.
The news of the Forcados crude oil terminal boosted confidence in the shares of Seplat, leading to a gain of 10 per cent last Thursday. Seplat Petroleum had said that the lifting of the force majeure helped it to successfully reinstate gross production at OMLs 4, 38 and 41, to levels last seen before the terminal’s closure.
The company, which stated this in its operations update issued to the NSE, said it received notification from the operator of the Forcados terminal, Shell Petroleum Development Company of Nigeria Ltd (SPDC), that the Force Majeure on exports from the terminal has been lifted.
“Since the recommencement of oil and condensate injection into the Forcados system at the end of May, Seplat has been able to successfully reinstate gross production at OMLs 4, 38 and 41 to pre-Force Majeure levels of around 75,000 bopd and 290 MMscfd, or 125,000 boepd.
On a net working interest basis this equates to around 34,000 bopd and 130 MMscfd, or 56,000 boepd,” the company said in a statement by Dr. Mirian Kene Kachikwu, its Company Secretary.