We have today initiated coverage on Seplat Petroleum and Development Company Plc., a blue chip upstream and midstream oil and gas producer with a £0.5bn market cap and a 7.6% dividend yield - it didn't cut its 2020 dividend, differentiating it from most in the sector. With consensus risked NAV of 158p per share we believe there is significant upside potential here on current assets alone. Its successful history of asset and corporate acquisitions combines with a fertile environment for these to continue, suggesting material growth potential ahead. We believe the market is under-pricing two imminent and highly certain catalysts, so we expect the shares to re-rate significantly once (i) a new oil pipeline starts flowing in early 2H21 and (ii) its new gas 300MMscfd processing plant comes online in 1H22. Neither appears to be priced in.
