Here’s what to know about Aradel, its listing on NGX

The Nigerian Exchange Limited on Monday, October 14, welcomed another company into the Bourse. It is the listing of Aradel Holdings Plc, an integrated energy company. The company listed its 4.34 billion shares by way of introduction at N702.69 per share. Upon its listing, Aradel Holdings boosted the NGX equities market capitalisation by N3.05 trillion, marking a significant milestone in the oil and gas sector’s participation in the stock market. While commemorating the listing, Aradel leveraged it for the Facts Behind the Listing presentation and Closing Gong Ceremony on NGX in Lagos. During the Facts Behind the Listing event, senior executives presented the company’s growth strategy and financial performance to investors and stakeholders. Chapel Hill Denham acted as financial adviser to Aradel Holdings Plc on its successful listing by introduction.

What is listing by introduction?

The difference between listing by way of introduction and a regular Initial Public Offer (IPO) is that no new shares were issued, but the existing shareholders of the company applied to the NGX to list their old shares. For Aradel Holdings, existing shareholders are now provided with the opportunity to sell to the public leveraging the platform of the Nigerian Exchange Limited. Aradel Holdings Plc is committed to returning value to shareholders and has consistently done that through the payment of dividends. This is evidenced in over 16 years of consistent dividend payments to shareholders.

The company

Aradel is an integrated energy Company with operations spanning upstream, midstream, downstream, power and renewables. Its offering comprises a robust portfolio of energy solutions, delivering reliable, clean and sustainable energy sources and driving innovation that traverses the entire value chain. Its portfolio encompasses exploration, production, refining, and distribution, as it strives to deliver exceptional value and secure the energy needs of communities locally and globally. The recent listing on NGX offers investors the opportunity to engage with one of Nigeria’s most diversified energy companies, positioning it as a key entity on the Exchange.

As the global energy landscape rapidly evolves, Aradel recognises the importance of embracing the energy transition and is taking proactive steps toward a sustainable future. One of the central elements of the energy transition is the accelerated deployment of renewable energy sources. Nigeria and several African countries possess abundant renewable energy resources, such as solar, wind, hydro, and geothermal.

Aradel acknowledges that renewable energy sources play a crucial role in achieving a low-carbon future, hence its commitment to investing in renewable energy projects that harness the power of solar, and other sustainable sources. By diversifying its portfolio, Aradel aims to reduce its carbon footprint while creating opportunities for sustainable economic growth.

Here are the company’s assets

OML 54 (Ogbele Field)

The Ogbele Marginal Field, located in Rivers State is Aradel’s flagship asset. The Company acquired the Ogbele Marginal Field, situated within the OML 54 block, in 2000 from the NNPC/Chevron Joint Venture (JV). It was the first ever Marginal Oil Field Farm-Out Agreement to be negotiated in Nigeria, between a Multinational /NNPC JV and a Nigerian Independent Company. Oil production commenced in November 2005 and in 2010, a 1000bbls/d diesel topping plant was installed. Since then, the field has developed into a fully integrated oil and gas-producing asset.

OML 53 (Omerelu Field)

The Omerelu Field is located in OML 53 about 42 kilometres Northwest of Port Harcourt in Rivers State, Nigeria. The Company acquired a 100 percent stake and operatorship of the Omerelu Field in 2014 from the NNPC/Chevron Joint Venture. The field license for OML 53 was renewed for 3 years in January 2021.

OML 34 (Utorogu Field, Ughelli East Field, and Ughelli West Field)

NNPC with a 55percent participating interest in the asset is the Operator on record. However, the asset is jointly operated by an Asset Management Team (AMT) made up of personnel from both NNPC and ND Western Limited in which Aradel is a significant Shareholder. OML 34 is located in the Western Niger Delta and covers an area of some 950 square kilometres.

In 2012, the Aradel led consortium, through a special purpose vehicle – ND Western Limited, completed the acquisition of the 45 percent interests of the Shell/Total/Agip JV in Oil Mining Lease (OML) 34, after a historic signing ceremony with NNPC/Shell/Total and Agip JV.

The producing fields within the assets are the Utorogu, Ughelli East, and Ughelli West, the Warri River asset is being revamped and developed into a producing entity. Due to its high gas reserves and production capacity, OML 34 is of national importance for domestic gas supply, as well as feeding gas supply into the West African Gas Pipeline (WAGP) to neighbouring countries of Benin, Togo, and Ghana.

OPL 227

OPL 227 is located 40km offshore Niger Delta and covers an area of 974km. The field is bounded to the North by OML 109 and the Ogedeh/Akepo Marginal fields (OML 90), to the East by OPL 282, to the West by OML 79, and to the South by OML 88. The asset was awarded to a consortium of ADDAX Petroleum Limited, Express Petroleum and Gas Company Limited, Petroleum Prospects International Limited, and Aradel. With the exit of Addax Petroleum from the asset, Aradel was nominated as the Operator by the partners subject to approval of the regulator which is currently being processed. As part of its mandate to fast-track the development of the asset, an extensive review of previous works was carried out, and we look to embark on further exploration activities. The field license for OPL 227 was renewed for 3 years in March 2021.

Read also: Aradel Holdings listing boosts NGX market capitalisation by N3.05trn

Impressive financial performance

Over the past five year (2019 to 2023), the company revenue grew from 2019 level of N45.958billion to N221.142billion in 2023. Also, its profit before tax (PBT) has risen from N20.592billion in 2019 to N112.163billion in 2023, while Profit After Tax (PAT) increased from 2019 low of N19.497billion to N53.737billion in 2023. Basic Earnings Per Share (EPS) which was 89.8kobo in 2019 grew to 247.4 kobo in 2023.

For Aradel, the listing is a historic milestone

Ladi Jadesimi, chairman, Aradel Holdings Plc while highlighting the company’s focus on innovation and sustainability, noted that Aradel is poised to expand its footprint in the renewables space while maintaining its leadership in the oil and gas sector.

“The listing of Aradel Holdings on NGX represents a pivotal moment for us. We are committed to driving sustainable growth in Nigeria’s energy industry, particularly in the renewables space, while continuing to excel in petroleum product exploration and refining. This listing provides us with the platform to unlock further value for our shareholders,” Jadesimi said.

Adegbite Falade, Managing Director/Chief Executive Officer, Aradel said, “this will mark a historic milestone for Aradel as we list on the NGX, underscoring our commitment to creating long-term value for our shareholders and deepening our contributions to Nigeria’s economic landscape”.

“This listing is a testament to our resilience, adaptability, and our unwavering dedication to providing sustainable energy solutions that drive growth across our communities and industries. As we embark on this new chapter in Aradel’s transformation journey, we remain focused on operational excellence, strategic expansion, and delivering returns that reflect our track record and vision for an energized future,” Falade Falade.

The listing excites NGX Group

Umaru Kwairanga, Chairman of Nigerian Exchange Group, highlighted the importance of the listing, saying, “This achievement is not just a win for Aradel, but also a clear indication to both local and global investors that Nigeria’s capital market remains vibrant, resilient, and full of opportunities. We are honored to facilitate capital raising for companies like Aradel that play a critical role in Nigeria’s economic progress.”

Temi Popoola, Group Managing Director/CEO of NGX Group, who emphasised the broader significance of the listing said “the benefits of an equity market listing for the upstream sub-sector of the oil and gas industry is especially crucial in light of its dire capital requirements and chronic underinvestment”.

“Aradel has come to the market at a critical time as this and we are confident that our infrastructure here at NGX, both market and technology, can unlock the capital flows needed to ensure the sector thrives,” Popoola.

Likewise, Jude Chiemeka, CEO of NGX, who echoed similar sentiments, stressed the role of NGX in supporting corporate growth and innovation. “Aradel’s listing highlights NGX’s ability to support leading companies in their growth journey. This is not just a milestone for Aradel, but a key moment for the energy sector, demonstrating how the capital market can fuel efficiency and development in critical industries,” Chiemeka said.