Get Guardian on GoogleAradel Holdings Plc recorded a 633 per cent increase in revenue to N3.95 trillion in the nine months ended September 30, 2026, as a sharp expansion in oil and gas production following the consolidation of newly acquired subsidiaries boosted its operating performance.
The indigenous energy company averaged 144,700 barrels of oil equivalent per day (boepd), up from 24,000 boepd in the corresponding period of 2025. The performance, which exceeded its previous production target, prompted the group to raise its full-year guidance to between 140,000 and 150,000 boepd, from a range of 110,000 to 140,000 boepd.
The stronger production base also lifted earnings before interest, taxes, depreciation and amortisation (EBITDA) by 702 per cent to N2.1 trillion, while its EBITDA margin improved from 49 to 53 per cent.
Profit after tax (PAT) fell by 82 per cent to N43.3 billion, from N245.1 billion a year earlier, largely due to a N529.1 billion earnout charge arising from Renaissance’s acquisition of Shell Petroleum Development Company (SPDC).
The significant increase in production and revenue reflects the enlarged group following the consolidation of ND Western and Renaissance, which became Aradel subsidiaries following the completion of the acquisitions on December 31, 2025. Both companies were previously accounted for as associates, making the current-period figures not directly comparable with those of the preceding year.
Aradel, however, said its profit after tax excluding the earnout charge stood at N572.4 billion, representing a 134 per cent increase over the previous year. The company stressed that the figure was an alternative performance measure and not a profit measure recognised under International Financial Reporting Standards (IFRS).
The earnout arrangement, under which Shell retains an economic interest in a defined area within Renaissance’s assets and receives payments based on revenue generated from that perimeter, has emerged as a significant financial burden for the enlarged group.
The arrangement attracted a N529.1 billion charge during the period, while the outstanding liability stood at N1.32 trillion after payments of N543.9 billion.
Speaking on the performance, Aradel’s Chief Executive Officer, Adegbite Falade, said the arrangement was originally designed to ensure an equal sharing of value generated from the defined area but had produced an imbalance in its implementation.
He said the company had formally raised concerns and was engaging Shell to resolve the matter. Although he described the discussions as constructive and expressed optimism about reaching an agreement before the end of 2026, he acknowledged that the outcome would depend on both parties finding common ground.
The earnout was also among the factors behind the sharp increase in finance costs, which rose to N797.3 billion from N6 billion in the corresponding period of 2025. The increase also reflected interest on borrowings inherited from the consolidated companies and loans used to finance the acquisitions.
Tax expense similarly climbed to N721.4 billion from N55.6 billion. Falade attributed the increase partly to the group’s expanded production base, explaining that most of its current output comes from assets subject to an 85 per cent petroleum profit tax regime, higher than the rate applicable to Aradel’s legacy assets.
Despite the substantial charges weighing on reported earnings, the group recorded stronger cash generation and a significant improvement in its financial position.
Net cash from operating activities rose to N2.46 trillion, while Aradel moved from a net debt position of N475.1 billion at the end of 2025 to a net cash position of N532.3 billion as of September 30, 2026.
Cash and cash equivalents increased to N1.998 trillion, while total borrowings declined by 25 per cent to N1.51 trillion.
The improved cash position informed the board’s decision to declare an interim dividend of N7 per share, amounting to approximately N30.4 billion. This compares with the N10 per share paid for the corresponding period of 2025.
Falade said the dividend decision reflected the need to balance shareholder returns with the capital requirements of the enlarged business.
While upstream operations recorded significant growth, the group’s refining business faced operational constraints. Refinery output declined by 18 per cent to 194.2 million litres, with capacity utilisation at 45 per cent.
The company attributed the decline to limited feedstock availability, evacuation constraints and planned maintenance. However, it said output recovered in the second and third quarters.
On the outlook for crude oil prices, Falade said the group’s production remained resilient even if international prices declined from current levels. Although he declined to disclose the company’s break-even price, he said investment decisions were based on conservative price assumptions to protect the business against market volatility.
According to him, a sustained decline in oil prices would have a greater effect on the pace of new investments than on existing production.
On domestic gas supply, Falade said ND Western channelled all its gas production, averaging about 200 million standard cubic feet per day, to the local market.
Renaissance, meanwhile, supplied approximately 170 million standard cubic feet per day domestically, nearly twice its volume a year earlier, and was targeting a fivefold increase in domestic supply by 2030.
Looking ahead, Falade said Aradel’s 2027 investment plan was being developed in consultation with its joint venture partners, including the Nigerian National Petroleum Company Limited. The proposed spending is expected to sustain existing production and support further growth across the group’s assets.
