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Stock Markets May 22, 2026 12:57 PM

S&P Upgrades Seplat Energy to B+ After Nigeria Rating Lift

Rising sovereign assessment and improved external metrics underpin the issuer and bond upgrades, while company exposure to Nigeria and oil-and-gas concentration remain constraints

By Avery Klein

S&P Global Ratings raised Seplat Energy PLC's long-term issuer credit rating to B+ from B and upgraded the company's $650 million senior unsecured notes to B+ from B. The move follows S&P's recent upgrades to Nigeria's sovereign ratings and country risk assessment. While the rating action reflects stronger credit metrics and policy safeguards at Seplat, the company's full exposure to Nigeria, modest size, and concentration in upstream oil and gas continue to limit its rating ceiling.

S&P Upgrades Seplat Energy to B+ After Nigeria Rating Lift

Key Points

  • S&P raised Seplat Energy's long-term issuer credit rating to 'B+' from 'B' and upgraded its $650 million senior unsecured notes to 'B+' from 'B'.
  • The rating action follows S&P's upgrades to Nigeria's sovereign ratings (to 'B' from 'B-') and its country risk assessment (to '5' from '6'), citing firmer growth, economic reform commitment, and an improved external position.
  • S&P cites Seplat's policy of holding at least 70% of cash in hard currency, with at least 70% of that offshore, as a key support for passing sovereign stress tests, while forecasting FFO to debt of 45%-60% and net debt leverage of 0.5x-1.5x.

Overview

S&P Global Ratings has raised the long-term issuer credit rating for Seplat Energy PLC to 'B+' from 'B'. The international ratings agency took the same step for Seplat's $650 million senior unsecured notes, moving their rating to 'B+' from 'B'.

Link to sovereign actions

S&P said the rating changes for Seplat followed its earlier adjustments to Nigeria's sovereign ratings and country risk assessment. On May 15, 2026, S&P raised Nigeria's foreign and local currency ratings to 'B' from 'B-'. The firm attributed that upgrade to firmer economic growth, a commitment to economic reform, and an improved external position, which includes higher foreign exchange reserves. On May 19, 2026, S&P revised its country risk assessment on Nigeria to '5' from '6'.

Constraints and company profile

Despite the upgrade, S&P highlighted several constraints that continue to limit Seplat's rating. The firm noted Seplat's complete exposure to Nigeria, the company's relatively small scale, and its concentration in the inherently volatile oil and gas exploration and production sector. Those factors keep the company's rating tethered to sovereign developments and sector cyclicality.

Liquidity and currency policy

S&P expects Seplat to remain resilient to the sovereign stress scenarios it applies. The ratings agency pointed to Seplat's policy of holding at least 70% of its cash in hard currency, with at least 70% of that hard-currency cash held offshore, as a key supporting feature for the company's ability to meet the stress tests.

Stand-alone credit profile and metrics

S&P's assessment of Seplat's stand-alone credit profile remains at 'b+'. That reflects a balance between what S&P calls relatively strong credit metrics on the one hand and the company's modest size and concentration on the other. The agency projects funds from operations to debt in the 45% to 60% range across the cycle and expects Seplat to keep net debt leverage between 0.5x and 1.5x. Production is forecasted at an annual average of 135,000 to 155,000 barrels of oil equivalent per day.

Outlook and assumptions

S&P assigned a stable outlook to Seplat, citing comfortable headroom on both the company's stand-alone profile and Nigeria's rating. The agency expects Seplat's credit metrics to improve over 2026-2027, forecasting funds from operations to debt to average 50% to 60% during that period. Those projections are conditioned on an assumed Brent crude price of $100 per barrel for the remainder of 2026 and $75 per barrel in 2027.

Note on limitations

Details presented here are taken from S&P's published actions and commentary. Where S&P provided ranges, forecasts, or policy descriptions, those figures are reported as stated by the ratings agency.

Risks

  • Seplat's rating remains constrained by its complete exposure to Nigeria, meaning sovereign developments could materially affect the company's credit profile - impacts energy and financial markets.
  • The company's relatively small size and concentration in oil and gas exploration and production leave it vulnerable to sector volatility - impacts energy sector investors and commodity-sensitive credit markets.
  • Outlook and metric improvements are conditioned on specific Brent crude price assumptions ($100/bbl for remainder of 2026 and $75/bbl in 2027); deviations from these price assumptions could affect projected credit metrics - impacts oil markets and credit analysts.

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