Moody’s changes Seplat Energy outlook on Nigeria upgrade

Moody's Ratings has upgraded the outlook on Seplat Energy Plc, a Nigerian energy company, from stable to positive while maintaining its B2 long-term corporate family rating and B2-PD probability of default rating. This change in outlook is a direct reflection of the improved outlook on the Government of Nigeria, which Moody's also upgraded from stable to positive.

Seplat's credit profile is heavily influenced by the economic, political, legal, fiscal, and regulatory environment in Nigeria. Despite this, the company's operating and financial performance has been robust, with average daily production reaching 139.5 thousand barrels of oil equivalent per day in the six months ending June 2026, marking a 4% increase compared to the previous year.

Management aims to further boost production to 170 thousand barrels of oil equivalent per day by 2030, accounting for a 10% divestment of assets to the Nigerian National Petroleum Company Limited.

Recent credit metrics, such as Moody's-adjusted debt to EBITDA and net debt to EBITDA, have improved significantly, falling from 3.0x and 2.1x in 2024 to 0.6x and 0.3x in 2026. Similarly, retained cash flow to debt has surged to 70% in 2026 from just 7% in 2024. Moody's suggests that Seplat's ratings could face further upgrades if the Government of Nigeria's rating is upgraded.

For an upgrade to take place, Seplat would need to consistently maintain a debt/EBITDA ratio below 2.0x, retain a debt-to-interest coverage of over 25%, generate positive free cash flow, and maintain strong liquidity throughout market cycles.