… as production rises 502 percent to 144.7kboepd
… operating cash generation strengthens to N2.46 trillion
Aradel Holdings Plc reported a significant expansion in its operating performance in the nine months to September 2026, with revenue rising 633 percent to N3.95 trillion, supported by higher production volumes, improved commodity prices and the consolidation of its interests in ND Western and Renaissance Africa Energy Company.
The Nigerian energy group also recorded a 703 percent increase in earnings before interest, taxes, depreciation and amortisation(EBITDA) to N2.10 trillion, while net cash generated from operating activities rose to N2.46 trillion, compared with N205.4 billion in the corresponding period of 2025.
Average production increased 502 percent to 144.7kboepd, reflecting growth from legacy assets and the consolidation of production from ND Western and Renaissance, which were equity-accounted associates in the comparable period of 2025.
The stronger operating performance lifted Aradel’s EBITDA margin to 53 percent from 49 percent, indicating improved profitability at the operating level despite higher production costs.
The company also raised its full-year production guidance to between 140,000 and 150,000 barrels of oil equivalent per day, from its previous range of 110,000 to 140,000 barrels.
Read also: Aradel’s profit jumps 192% on acquisition gains, higher sales
Higher realised commodity prices also supported revenue growth. Average realised crude oil prices increased to $97.50 per barrel from $75.60, while gas prices rose to $2.64 per thousand standard cubic feet from $1.64.
Crude oil accounted for 69 percent of revenue, gas contributed 26 percent and refined products made up the remaining five percent.
Adegbite Falade, chief executive officer of Aradel Holdings, said the company had recorded first oil from its Olo marginal field and that Renaissance made an exploration discovery following the JK-004 well in shallow waters offshore Nigeria, within Oil Mining Lease 74.
He described the discovery as a significant development, noting that the exploration campaign in the area was the first in about a decade.
The company did not provide a quantified estimate of recoverable resources from the discovery in its nine-month report.
Cash generation strengthens balance sheet
The operating gains also strengthened Aradel’s financial position, with net cash generated from operating activities reaching N2.46 trillion, compared with N205.4 billion in the corresponding period of 2025.
The company ended September with cash and cash equivalents of N2.00 trillion and total borrowings of N1.51 trillion, moving from net debt of N475.1 billion at the end of December 2025 to net cash of N532.3 billion.
Falade said the cash position demonstrated the resilience of the enlarged business despite the impact of the earnout arrangement on reported earnings.
The company’s cash position must also be considered alongside its remaining obligations. The contingent consideration liability associated with the earnout stood at N1.32 trillion at September 30, after N543.9 billion in payments during the nine-month period.
The group also spent N570.6 billion on capital expenditure and recorded substantial finance costs, reflecting the borrowings of its consolidated businesses and other charges.
Read also: Aradel’s mini-refinery plans petrol output in 2027
Engagement continues on Renaissance earnout arrangement
While revenue and operating earnings recorded substantial growth, profit attributable to shareholders fell 42 percent to N141.5 billion.
The earnings decline reflects a N529.1 billion charge associated with the earnout arrangement under Renaissance’s acquisition of SPDC, according to the company’s unaudited results.
Falade said discussions with the seller of Shell Petroleum Development Company (SPDC) were progressing constructively, with both parties continuing their engagement on the earnout arrangement.
“We are optimistic that it should be resolved sooner than later, hopefully before the end of this year,” Falade said during a call with BusinessDay.
The CEO said the arrangement, which was designed to give the seller and Renaissance equal economic interests in a defined portion of the acquired assets, in execution, no longer reflected the balanced participation the parties intended. The company is in constructive conversations with the vendor to make it more equitable.
The outcome could be significant for investors seeking to assess the returns from Aradel’s expanded asset base, particularly as the company works to sustain its production growth and strengthen its balance sheet.
Aradel’s growth run has improved investors’ sentiment, ranking it 19th on the Nigerian Exchange in terms of year-to-date performance.
The stock has returned 115 percent in value to shareholders since the beginning of this year, closing at N1,439.90 per share on the local bourse on Friday.
Dividend reflects cash strength
Despite the decline in shareholder earnings, Aradel’s board approved an interim dividend of N7 per share, amounting to approximately N30.4 billion, compared with N10 per share in the corresponding period of 2025.
The company said the payout reflected a balance between its strong cash generation and net cash position, on one hand, and capital commitments, debt service and other obligations, on the other.
For investors, the dividend decision highlights the distinction between Aradel’s underlying operating performance and the earnings reported under International Financial Reporting Standards.
Read also: Aradel executives sell N10.9bn stake amid share price decline
Excluding the earnout charge, profit after tax attributable to shareholders was N572.4 billion, up 134 percent from the previous year, according to the company’s alternative performance measure.
That figure, however, is not a substitute for reported earnings and excludes the earnout charge without attributing any tax effect to the adjustment.
As Aradel continues to integrate its expanded asset base and build on its improved production and cash generation, the company’s ability to sustain its operating momentum and advance its ongoing engagement on the earnout arrangement will remain important considerations for investors.
Falade’s expectation of an outcome before the end of 2026 provides a potential near-term milestone, although the company has not announced a definitive settlement date.
Wasiu Alli is a business, economics cum data journalist with strong expertise covering macro trends, capital markets, government policies, corporate earnings and comparative economics analysis. Alli turns raw data into trends that not only tells compelling stories but nudges investors to make valued and informed decisions. He’s an alumnus of Lagos State University and trained at Lagos Business School. He formerly heads the Companies and Markets desk at BusinessDay where he writes and supervises the production of well researched articles on earnings updates, corporate sectoral comparisons, market intelligence as well as interviews with C-suite executives.
