Nigeria’s leading indigenous upstream oil companies, Aradel Holdings Plc and Seplat Energy Plc, had a combined asset base of N19.11tn as of June 2026, driven by asset consolidation and stronger realised crude prices, which led to sharp increases in revenue and profitability.
An analysis by The PUNCH of the unaudited half-year financial results of the two companies revealed that Aradel accounted for N10.87tn of the combined assets, while Seplat’s total assets stood at N8.24tn.
The companies also recorded stronger revenues during the period, although they achieved the growth through different routes.
Aradel’s revenue surged by 577 per cent, from N368.08bn in the first half of 2025 to N2.49tn in H1 2026, while Seplat’s revenue increased by 30.2 per cent, from $1.40bn to $1.82bn.
The disparity reflected Aradel’s rapid expansion of its consolidated asset base following major upstream acquisitions, while Seplat largely converted stronger realised crude prices and margins into higher revenue despite essentially flat-to-declining production volumes.
Aradel’s asset expansion has been particularly pronounced over the past three years. Its total assets rose from N923.43bn in 2023 to N1.75tn in 2024, representing an 89.5 per cent increase. The company’s asset base then expanded to N9.90tn by December 2025, representing a further 465.5 per cent increase in one year.
By June 2026, Aradel’s assets had climbed further to N10.87tn, up approximately 9.8 per cent from the year-end 2025 position. Taken together, the figures show that Aradel’s assets increased by about 1,077 per cent between 2023 and June 2026, with the largest step-change occurring during 2025 as the company consolidated newly acquired upstream interests.
The rapid expansion followed Aradel’s increased ownership of ND Western, which strengthened its exposure to OML 34 and significantly enlarged the assets and operations reflected in its group accounts.
Investment research by economist and investment specialist, Dr Vincent Nwani, described the ND Western consolidation as transformational for Aradel, noting that its increased ownership meant the volumes and cash flows of OML 34 would contribute substantially to the company’s reported earnings.
Nwani said, “Moving to 81.67 per cent ownership means OML 34’s volumes and cash flows become majority-owned, boosting reported earnings substantially in 2026.”
He also identified Aradel’s indirect exposure to Renaissance, the consortium involved in the acquisition of Shell Petroleum Development Company’s onshore assets, as another source of potential scale for the company.
Nwani said Aradel had a “53.3 per cent effective interest in Renaissance,” giving its shareholders exposure to what he described as the largest onshore divestment in Nigerian history.
The enlarged asset base was reflected in Aradel’s operating performance. Its gross profit jumped 782 per cent, from N163.16bn in H1 2025 to N1.44tn in H1 2026, while profit after tax increased 30.5 per cent, from N146.39bn to N191.05bn.
The slower growth in profit after tax compared with revenue and gross profit suggests that the enlarged group also carried substantially higher costs and expenses as it integrated its expanded portfolio.
In a phone interview with The PUNCH, former Managing Director and Chief Executive Officer of 11Plc, Adetunji Oyebanji, said the next stage of Aradel’s growth would depend on how effectively it extracted additional production and efficiencies from the enlarged asset base.
Oyebanji said, “When you consolidate, you take on new assets, new fields. There’s also an issue of scale. You get a bigger scale. And with that scale, hopefully, your production level increases because you now have greater efficiencies.”
When asked about guarantees for future growth, he observed that Aradel’s exceptional growth rate would not continue indefinitely without further acquisitions or organic expansion.
Oyebanji said, “Once you’ve consolidated, brought these assets on stream and you start to exploit them, you get to a plateau also. So further growth beyond that will only come from additional asset acquisition or organic growth.”
Similarly, National President of the Nigerian Association of Liquefied Petroleum Gas Marketers, Edu Inyang, said the available financial data pointed primarily to asset consolidation as the driver of Aradel’s extraordinary revenue expansion, although the absence of production data made it impossible to separate the acquisition effect from organic production growth precisely.
Inyang said, “Based on the findings, Aradel’s H1 2026 performance appears to have been driven primarily by asset consolidation rather than organic production growth.”
He agreed that the scale of growth would be difficult to repeat without another major acquisition. Inyang said, “Unless Aradel continues acquiring and consolidating additional producing assets, the exceptional growth rate would likely moderate.”
Seplat expands earnings
Seplat, meanwhile, achieved a more moderate but still significant increase in revenue without a comparable expansion in production volumes. Its revenue increased 30.2 per cent to $1.82bn from $1.40bn, while gross profit jumped 68.4 per cent to $815.9m from $484.6m.
Profit after tax rose by an exceptional 498 per cent, from $27.4m to $164m. Unlike Aradel, Seplat’s expansion in financial performance was not primarily the result of putting a dramatically larger asset base on its books during the period. Rather, the company benefited from stronger realised crude prices and margins on essentially flat-to-declining volumes.
That distinction leaves Seplat more exposed to movements in international crude prices. Oyebanji said, “Once there is a crisis and oil prices go up, then what you find is that oil companies start delivering very, very high profit numbers. And usually once the oil price starts to soften, then you see the same impact on their profits. Their profits start to soften.”
He noted that Seplat’s resilience would therefore depend increasingly on production efficiency and its cost per barrel.
Oyebanji said, “What then becomes the key factor is their operating costs. How much does it cost to produce a barrel? So their profitability will depend on their efficiency. If they are very efficient in their production, then the profitability will not be as impacted. But if they are not efficient, then once oil prices weaken, their margins will also shrink.”
Seplat’s investment case has nevertheless strengthened through the expansion of its Nigerian upstream footprint, including its integration of Seplat Energy Producing Nigeria Unlimited.
The investment expert Nwani described the company’s acquisition and integration programme as transformational, while also pointing to the first gas from the ANOH project in January 2026 as an additional revenue stream.
He also identified Seplat’s conversion to the Petroleum Industry Act fiscal regime as a potential structural improvement in cash flow through a lower effective tax burden. The company also benefits from its dual listing on the Nigerian Exchange and the London Stock Exchange, giving it access to a broader pool of investors and international capital.
Nwani said the company had set a target of returning more than $1bn to shareholders over its 2026–2030 five-year plan. However, he identified oil price exposure as a major risk to the investment case, noting that a prolonged Brent price below $60 per barrel could pressure dividend capacity.
The contrasting performances of Aradel and Seplat have also renewed debate over whether the growing role of indigenous operators is translating into better operational performance in Nigeria’s upstream sector.
The former oil executive Oyebanji said local operators could benefit from stronger relationships with host communities and potentially lower operating costs than international oil companies. He said, “Indigenous companies have less downtime, fewer interruptions from the community and so forth. So they can get more.”
He also said local operators could develop marginal assets more economically because they might not carry the same cost structure as international oil companies.
Oyebanji said, “I’m not saying the indigenous operators cut corners, but let us say they may not operate to the same playbook that the international companies operate.”
He explained that lower operating costs could improve the economics of assets that international oil companies previously considered less attractive.
However, NALPGAM chief Inyang cautioned against automatically equating the companies’ stronger financial results with improved underlying operational efficiency. He said, “Based on these findings alone, there is insufficient evidence to conclude that indigenous ownership has materially improved operational performance.”
He added that establishing such a conclusion would require longer-term evidence on production efficiency, recovery rates, uptime, reserve replacement and operating costs.
For Aradel, the immediate story is one of scale through asset consolidation, with its asset base expanding from less than N1tn in 2023 to almost N10tn by the end of 2025 and N10.87tn by June 2026.
For Seplat, the H1 2026 performance reflects price and margin expansion alongside its growing upstream footprint, rather than a comparable asset-consolidation effect.
The sustainability of the gains will ultimately depend on what both companies do with their enlarged asset bases, how efficiently they produce from them and how they manage exposure to volatile crude prices.
As the two indigenous operators continue to take larger positions in Nigeria’s upstream industry, their H1 2026 results show that asset ownership, production scale and crude prices are combining to reshape the earnings profile of Nigeria’s domestic oil industry.
SOURCE: PUNCH NEWS PAPER
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