Strategic Acquisition to Boost Production and Efficiency
The acquisition of the Olo and Olo West fields aligns with Aradel’s strategy to consolidate its upstream assets and optimize production through integrated infrastructure. Located in the hydrocarbon-rich Niger Delta basin, the fields are expected to complement Aradel’s existing operations, including the Ogbele Field (OML 54), Omerelu (PPL 247), and OPL 227 joint venture.
According to industry reports, the Olo fields hold significant untapped reserves, presenting an opportunity for Aradel to leverage its technical expertise and advanced drilling technologies. The company plans to adopt a cluster development approach, integrating nearby fields to streamline operations, reduce costs, and maximize output. This model is particularly beneficial for marginal fields, which often face economic challenges when developed in isolation.
Record Financial Performance in 2024
Aradel’s 2024 financial results reflect robust growth, with revenue surging to N581.2 billion, a staggering 163% increase from N221.1 billion in 2023. Export crude oil sales, which accounted for 64.3% of total revenue, drove much of this growth, soaring by 244.6% year-on-year.
Profit after tax also saw an extraordinary rise, reaching N259.1 billion compared to N53.7 billion in the previous year. This performance was attributed to higher production volumes, improved crude evacuation systems, and strategic acquisitions, including the newly acquired Olo fields.
Operational Excellence and Expansion Initiatives
Aradel reported significant operational improvements in 2024, with crude oil production increasing by 41.2% to 13,751 barrels per day (bpd) and gas production rising by 21.9% to 32.4 million standard cubic feet per day (mmscfd). The company also sold 240.5 million litres of refined petroleum products, a 14.5% increase from 2023.
Key infrastructure enhancements, including the utilization of the Trans Niger Pipeline (TNP) and the Alternative Crude Evacuation (ACE) system contributed to reduced losses and improved efficiency. Additionally, Aradel expanded its portfolio by acquiring a 5.14% equity stake in Chappal Energies Mauritius Limited**, further diversifying its upstream investments across Africa.
Strong Cash Flow and Shareholder Returns
The company generated N311.9 billion in operating cash flow, a 124.4% increase from 2023, reflecting strong operational margins. Despite higher capital expenditures—N136.8 billion, up 179.9% year-on-year —Aradel maintained a healthy free cash flow of N175.1 billion.
In a move to reward investors, the company has proposed a final dividend of N22 per share, pending approval at the upcoming Annual General Meeting. This decision follows Aradel’s listing on the Nigerian Stock Exchange (NGX) in October 2024, which has improved share liquidity and reinforced investor confidence.
Future Outlook: Growth and Sustainability
With the Olo and Olo West fields now under its control, Aradel is well-positioned to enhance its production capabilities and drive long-term value. The company’s multi-field cluster strategy is expected to unlock synergies, reduce costs, and extend the lifespan of its assets.
As Aradel continues to expand its footprint in Nigeria’s energy sector, industry analysts anticipate further growth in production, revenue, and profitability, solidifying its position as a key player in Africa’s oil and gas industry.