Get Guardian on GoogleAradel Holdings Plc generated N2.46 trillion in net cash from operating activities in the nine months ended September 30, 2026, moving from a net debt position of N475.1 billion at the end of 2025 to a net cash position of N532.3 billion, as the consolidation of newly acquired subsidiaries and increased production strengthened its financial position.
The indigenous energy company recorded revenue of N3.95 trillion, while earnings before interest, taxes, depreciation and amortisation (EBITDA) reached N2.10 trillion. Average production rose to 144,700 barrels of oil equivalent per day (boepd), from 24,000 boepd in the corresponding period of 2025.
The enlarged production base also improved EBITDA margin to 53 per cent from 49 per cent a year earlier, while unit field operating costs declined by 28 per cent to US$7.9 per barrel of oil equivalent from US$11.0, reflecting improved operational efficiency.
The increase in production and revenue followed the consolidation of ND Western and Renaissance, which became Aradel subsidiaries after the completion of the acquisitions on December 31, 2025. This is the first reporting period in which both businesses have been fully reflected in the group’s results, significantly expanding its production capacity, revenue base and operational footprint.
Crude oil production averaged 57,900 barrels per day (kbopd), while gas production rose to 503.6 million standard cubic feet per day. The performance was supported by expanded processing capacity, sustained pipeline availability and continued customer demand. Revenue grew by 633 per cent, with crude oil and gas accounting for the major contributions.
The group also recorded N253.1 billion in other income, principally from crude handling fees generated through third-party use of its evacuation infrastructure. The income reflects additional revenue opportunities from the enlarged operations, particularly the use of its infrastructure by other industry players.
While upstream operations recorded significant growth, refining performance remained constrained. Net refined product output declined by 18 per cent to 194.2 million litres, with refinery utilisation standing at 45 per cent. However, output improved sequentially in each quarter after the first, reflecting progress in restoring and improving refinery operations.
Despite the operational expansion and acquisition-related obligations, the group recorded stronger cash generation, which supported its investment and financing requirements during the period.
Net cash from operating activities rose to N2.46 trillion from N205.4 billion in the corresponding period of 2025. Aradel spent N570.6 billion on capital expenditure, while interest and principal repayments amounted to N580.5 billion. It also made lease payments of N81.4 billion, dividend payments of N110.5 billion and earnout payments of N543.9 billion.
The improved cash position saw the group move from net debt of N475.1 billion at the end of 2025 to net cash of N532.3 billion as of September 30, 2026. Total borrowings declined by approximately 25 per cent following the full repayment of two facilities in the first quarter.
Cash and cash equivalents stood at approximately N2 trillion at the end of September, with an additional N41.5 billion in restricted cash. Including restricted cash, total cash for the net cash calculation amounted to approximately N2.04 trillion, compared with total borrowings of N1.51 trillion.
Operating cash flow before working-capital movements stood at approximately N2.48 trillion, indicating that the group’s cash generation was largely supported by its operating performance rather than favourable working-capital movements.
Despite the stronger operating performance and cash generation, reported earnings declined, largely due to acquisition-related costs and the tax profile of the enlarged group.
Profit after tax (PAT) fell to N43.3 billion from N245.1 billion in the corresponding period of 2025. Profit attributable to shareholders also declined to N141.5 billion from N242.9 billion, while earnings per share dropped to N32.57 from N55.90. The difference between group profit and profit attributable to shareholders reflects a N98.2 billion loss attributable to non-controlling interests.
A major factor behind the earnings performance was a N529.1 billion earnout charge arising from Renaissance’s acquisition of Shell Petroleum Development Company (SPDC).
Under the arrangement, the seller retains an economic interest in a defined perimeter of Renaissance’s assets, with payments calculated by reference to net revenues generated within that area. The related contingent consideration is recognised within finance costs. The group also made cash payments of N543.9 billion under the arrangement, while the outstanding liability stood at N1.32 trillion as of September 30, 2026.
Tax expense similarly increased to N721.4 billion from N55.6 billion in the corresponding period of 2025, reflecting the higher tax rates applicable to ND Western and Renaissance. The earnout charge and increased tax expense contributed to the difference between the group’s operating performance and reported profit.
Aradel, however, reported profit after tax before the earnout charge of N572.4 billion, representing a 134 per cent increase over the previous year. The company said the figure was an alternative performance measure intended to provide additional insight into its performance before the charge. It attributed no tax effect to the adjustment and stressed that the figure should be distinguished from reported profit under International Financial Reporting Standards (IFRS).
The board also expressed concerns that the earnout arrangement no longer reflected the balanced participation originally intended by the parties. Aradel and other Renaissance shareholders are engaging the seller on the matter. However, without prejudice to the discussions, the earnout is expected to continue accruing for the remainder of 2026.
Following production levels above its earlier expectations, Aradel raised its full-year 2026 production guidance to between 140,000 and 150,000 boepd, from its previous range of 110,000 to 140,000 boepd.
Management expects EBITDA, operating cash generation and liquidity to remain robust after earnout payments. Its priorities include optimising the enlarged asset base, improving operational uptime, increasing production and maintaining disciplined capital allocation.
The group’s nine-month performance reflects the increased scale of its operations following the consolidation of ND Western and Renaissance. Higher production, improved operational efficiency and stronger cash generation have contributed to its transition into a net cash position.
With higher production guidance and an expanded portfolio of oil, gas and refining assets, Aradel enters the final quarter of 2026 with an improved financial position and increased capacity to pursue its growth priorities. Its ability to sustain production growth while managing acquisition-related obligations will remain important in consolidating the benefits of the enlarged business.
