Monday, October 14, saw the arrival of a new giant in the Nigerian listed equities scene, Aradel Holdings. It listed with a N3 trillion market capitalisation, making it the most capitalised oil and gas stock on the exchange, ahead of Seplat Energy and Oando Plc.
Aradel listed 4.345 billion ordinary shares of 50 kobo each at a price of N702.69, marking a market capitalisation of N3.05 trillion. In less than an hour of listing, the share price appreciated by 10 percent to close at N772.90 due to immense BUY pressure.
Investor enthusiasm for Aradel is suprising, considering the company’s growth potential with respect to its oil and gas assets, as well as the over 2600 percent growth recorded in the NASD Exchange this year. Aradel Holdings was initially listed on the unlisted securities exchange, NASD, until October 11, 2024. The stock started trading on NASD in 2013, with nominal shares of N10 each trading at a share price of N350. After rebranding as Aradel Holdings, the stock started trading in 2024, with a share price of market N516.95 and a market capitalisation of N112.3 billion.
Read also: Aradel Holdings listing boosts NGX market capitalisation by N3.05trn
The share price appreciated to a whopping N9,867.38, leading to a stock split with the one nominal share of N10 split into 20 ordinary shares of N50 kobo each, resulting in a share price of N469.95 on September 30.
Aradel exited NASD with a share price of N702.69 and listed on the NGX with a N702.69 share price.
Aradel Holdings, formerly known as Niger Delta Exploration and Production Company (NDEP), was incorporated in 1992 as Midas Drilling Fund. The name was changed in 1996 to NDEP Plc and to Aradel Holdings Plc in 2023.
2024 has seen a massive surge in the share price of Nigerian oil and gas stocks, with Oando Plc appreciating by 585 percent year-to-date (YTD), Seplat rising by 126 percent; Conoil, 100 percent; Eterna Plc, 78.3 percent; and Total Energies, 75 percent YTD. Investor enthusiasm for oil and gas stocks is fueled by the launch of the country’s first privately owned PMS-producing facility, Dangote Refinery, which is also slated for a stock market listing in 2025.
The introduction of Aradel to the mix is a huge boost for the exchange, with the market capitalisation pushing up to almost N60 trillion, as the market makes a slow climb to the N100 trillion market capitalisation mark.
Read also: Aradel Holdings grows half year profit by 695% to N104bn
Here are some of the key facts that are driving the bullish sentiments about Aradel Holdings Plc:
1. The group is part of the consortium involved in the purchase of Shell’s onshore assets
In January 2024, Aradel Holdings Plc came together with three other local upstream oil companies, ND Western, First E& P, and WalterSmith Group to form Renaissance Africa Energy Limited. Renaissance is set to acquire a 100 percent stake in Shell Petroleum Development Company of Nigeria (SPDC), pending regulatory approvals.
SPDC is one of the four businesses owned by Shell International in Nigeria, and the company controls Shell’s onshore and shallow-water oil and gas assets. The company has 30 percent participating interest in its joint venture assets, including about 250 oil wells, 37 gas wells, four gas plants, and two oil export terminals.
The acquisition of SPDC has a net book value of $2.8 billion, with an upfront payment of $1.3 billion. However, the acquisition is awaiting regulatory approval.
If the transaction is complete, Aradel Holdings’ assets will surge above its current N1.37 trillion.
2. Aradel Holdings’ oil production, refining capacity
The local upstream company is consistently driving itself to new frontiers in the oil production space. The company’s crude oil production capacity hit 13,250 barrels per day at the end of the first quarter of 2024 (Q1 2024), marking a 103 percent year-on-year growth from 6,515 barrels per day as at the end of Q1 2023.
The group’s gas production also hit 6,237 barrels of oil equivalent per day, marking a 93 percent year-on-year growth from the 3,220 recorded in Q1 2023.
In the first quarter of 2024, Aradel Holdings refined about 59.9 million litres of products, marking a 166 percent year-on-year growth from the 22.5 million litres refined in H1 2023.
Aradel’s refinery contributed about N50.2 billion to the company’s revenue in Q1 2023, marking about 50 percent of the total revenue.
Aradel Holdings currently owns four oil fields, OML 54, OML 34, OML 53, and OPL 227, and an 11,0000 barrels per day modular refinery.
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