Moody’s Ratings has revised the outlook on Seplat Energy Plc to positive from stable and has affirmed the company’s B2 long-term corporate family rating and B2-PD probability of default rating. The move follows Moody’s August 28, 2026 decision to change the outlook on the Government of Nigeria to positive from stable while affirming Nigeria’s B3 long-term foreign and local currency issuer ratings.
The rating action on Seplat mirrors the change in Nigeria’s outlook because Seplat’s creditworthiness remains tightly linked to the country’s economic, political, legal, fiscal and regulatory environment. Moody’s said Seplat’s rating continues to be constrained by the lower of Nigeria’s foreign-currency country ceiling of B2 and by being one notch above the sovereign B3 rating, reflecting the company’s ongoing exposure to sovereign-related risks.
Operationally, Seplat has posted resilient performance. The company benefited from a stronger oil price environment following the escalation of geopolitical tensions in the Middle East in early 2026, which supported revenue and cash flow. Average daily production increased to 139.5 thousand barrels of oil equivalent per day (kboepd) in the six months ended June 2026, representing a 4% rise year-on-year. Management has set a target to expand output further to 170 kboepd by 2030, taking into account the recent announcement of a 10% divestment of the Seplat Energy Producing Nigeria Unlimited assets to the Nigerian National Petroleum Company Limited.
Seplat’s balance sheet metrics have improved substantially since closing the acquisition of Mobil Producing Nigeria Unlimited, now SEPNU, in December 2024. Moody’s-adjusted debt to EBITDA fell to 0.6x for the twelve months ended June 2026 from 3.0x at year-end 2024. Moody’s-adjusted net debt to EBITDA improved to 0.3x from 2.1x over the same period. Retained cash flow to debt strengthened to 70% for the twelve months ended June 2026, up from 7% in 2024. These shifts underscore material deleveraging and stronger cash generation over the period.
Moody’s noted the conditions that would likely be necessary for an upgrade of Seplat’s ratings tied to an upgrade of the Government of Nigeria. In addition to a sovereign upgrade, the company would need to maintain a strong financial profile: sustainably keeping debt/EBITDA below 2.0x and retained cash flow (RCF) to debt above 25%, consistently generating positive free cash flow and preserving adequate liquidity through cycles.
The rating determination therefore balances improved company fundamentals against the continued constraints imposed by Nigeria’s sovereign profile. While Seplat’s operating and credit metrics have materially strengthened since the SEPNU acquisition, the company’s rating remains linked to the sovereign ceiling and the possibility of sovereign-related risks.
Additional context
The outlook revision signals Moody’s recognition of both the company’s improved leverage and cash-flow metrics and the influence of Nigeria’s changed outlook. The affirmation of the B2 ratings, combined with a positive outlook, leaves open the potential for an upgrade should sovereign and company-level conditions align with the agency’s stated thresholds.