The NGX Plug

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[The NGX Plug @TheNGXPlug]

@Maverique_R @MudiTheInvestor That’s the unaudited FS. We are waiting for the audited one.

[The NGX Plug @TheNGXPlug]

@Rxbremen Personally, I’m expecting something in the region of 45 naira. But they should hurry up and drop.

[The NGX Plug @TheNGXPlug]

@efearue It’s like they’re in another timezone o 😅💀

[The NGX Plug @TheNGXPlug]

Aradel should better do the needful today.

[The NGX Plug @TheNGXPlug]

I see no reason why we should be at work today. We should have just carried the public holiday through into the weekend.

[The NGX Plug @TheNGXPlug]

@Rxbremen I totally agree. Here’s my thesis on it.

[The NGX Plug @TheNGXPlug]

Aradel Is Bigger Than The Market Thinks

Before going further, it is important to note that I am bias towards Aradel, I have a decent position in them too. A post about that can be found here: https://t.co/Gk7eHiXb3z

So lets get into it.

Every now and then, a listed company changes so fundamentally that looking at it through the lens of its old numbers stops making sense.

That may well be where we are with Aradel.

For many investors, Aradel is still the company they came to know over the last few years: a well-run indigenous oil producer with solid cash flows, a refinery business that added some diversification, and a sometimes rewarded shareholders.

The problem with that view is that the Aradel of today is not the Aradel of yesterday.

I would like to make a somewhat compelling argument that the market may still be underestimating just how much the business has changed following its acquisition of an additional 40% stake in ND Western, completed in December 2025.

The transaction pushes Aradel’s effective economic interest in Renaissance Africa Energy Company (RAEC) to 53.3%, crossing the threshold for full consolidation. In plain English, this means Aradel is no longer merely taking a share of profits from RAEC. It is now bringing the business fully onto its books, including revenues, production, assets, debt and cash flows.

That distinction matters more than many people appreciate.

Before now, Aradel’s investment story was partly obscured. Investors could see earnings flowing in from associated businesses, but the economics beneath were harder to fully appreciate because they sat outside the reported operating line. Going forward, the company begins to look very different. Bigger. More asset-heavy. More cash generative. And perhaps more deserving of a different valuation framework altogether.

The easiest way to think about this is simple: Aradel has moved from having exposure to a giant upstream business to effectively controlling one.

And scale changes everything (yes, size matters...sometimes).

According to some analysts' estimates, consolidated production could rise to 48.7 mmboe in 2026, increasing to 68.1 mmboe by 2028 as RAEC ramps production toward its longer-term targets.

But here is where the story gets even more interesting.

At the same time that Aradel is becoming a materially larger company, oil prices have been unexpectedly supportive.

The geopolitical tensions in the Middle East have inserted a risk premium into global oil markets, with Brent spending much of early 2026 around the $100/bbl mark, even if analysts expect prices to normalize over time.

For an upstream oil company, price matters immensely.

If you own a business producing meaningfully more barrels while simultaneously selling those barrels at a higher price than previously expected, operating leverage kicks in hard.

Personally, I believe upstream gross margins could expand to over 56% in 2026, while group EBITDA may cross $1.2 billion. I expect revenue to rise to about $2.4 billion in 2026 under the new consolidated structure too.

Now, before anyone accuses this of sounding overly euphoric, there are important caveats. Oil is cyclical.

The same geopolitical premium helping oil prices today could disappear tomorrow. If tensions in the Middle East ease faster than expected and Brent drifts back toward the $65 to $70 range, earnings expectations would need to be revised lower. I am aware that Aradel is benefiting from tailwinds that may not last forever.

There is also execution risk...

Much of the upside case depends on RAEC continuing to ramp production smoothly toward its targets. Operational bottlenecks, underperforming wells, delays or integration issues could all slow the earnings trajectory investors are currently beginning to price in. The refinery business also faces timing risks after the expansion timeline shifted from late 2025 to early 2027. None of these risks are fatal, but they matter.

Still, even after accounting for those risks, one question remains difficult to ignore:

Is the market fully pricing in the new Aradel?

This is where the bull case becomes harder to dismiss.

Personally, I value the stock at about NGN2,500 per share (this valuation is not driven by one heroic assumption. It comes from a sum-of-the-parts framework that separately values the upstream business and refinery segment).

Interestingly, even on reserve-based peer comparisons, Aradel does not appear outrageously priced. On an EV/2P reserves basis, it trades broadly around peer averages despite arguably having a higher quality, newly consolidated reserve base through RAEC. That suggests the market may still be treating Aradel partly like the company it used to be, rather than the one it is becoming.

And then there is the dividend conversation.

This is probably the question many retail investors care about most.

Though the management has not yet announced a formal post-consolidation dividend policy, which is understandable given the enlarged balance sheet and integration process. But if Aradel were to broadly maintain its historical approach of paying the higher of 50% of PAT or 20% of operating cash flow, dividend capacity could increase materially simply because the earnings and cash generation base is now much larger.

That said, expecting management to aggressively distribute cash immediately may be optimistic. Debt reduction, operational integration and reinvestment into growth will likely compete for attention. Investors expecting an overnight windfall could be disappointed.

But perhaps that misses the bigger picture.

The real debate around Aradel today is not whether next year’s dividend will be slightly higher or lower.

It is whether the market has fully internalized that this is now a fundamentally different company.

For years, Nigerian investors have often been slow to re-rate businesses after transformational shifts, particularly when the change is buried in accounting consolidation and not immediately obvious in headline earnings. Markets sometimes anchor themselves to old narratives long after reality has moved on.

Aradel may be testing that tendency in real time.

Because if the underlying assumptions prove broadly right, investors are not looking at the same Aradel that traded a few years ago.

They are looking at something significantly larger, more cash generative, and potentially more valuable.

PS. This is not financial advice.

[The NGX Plug @TheNGXPlug]

@HabuSadeik Aradel supremacy 🙏🏽

[The NGX Plug @TheNGXPlug]

Aradel Is Bigger Than The Market Thinks

Before going further, it is important to note that I am bias towards Aradel, I have a decent position in them too. A post about that can be found here: https://t.co/Gk7eHiXb3z

So lets get into it.

Every now and then, a listed company changes so fundamentally that looking at it through the lens of its old numbers stops making sense.

That may well be where we are with Aradel.

For many investors, Aradel is still the company they came to know over the last few years: a well-run indigenous oil producer with solid cash flows, a refinery business that added some diversification, and a sometimes rewarded shareholders.

The problem with that view is that the Aradel of today is not the Aradel of yesterday.

I would like to make a somewhat compelling argument that the market may still be underestimating just how much the business has changed following its acquisition of an additional 40% stake in ND Western, completed in December 2025.

The transaction pushes Aradel’s effective economic interest in Renaissance Africa Energy Company (RAEC) to 53.3%, crossing the threshold for full consolidation. In plain English, this means Aradel is no longer merely taking a share of profits from RAEC. It is now bringing the business fully onto its books, including revenues, production, assets, debt and cash flows.

That distinction matters more than many people appreciate.

Before now, Aradel’s investment story was partly obscured. Investors could see earnings flowing in from associated businesses, but the economics beneath were harder to fully appreciate because they sat outside the reported operating line. Going forward, the company begins to look very different. Bigger. More asset-heavy. More cash generative. And perhaps more deserving of a different valuation framework altogether.

The easiest way to think about this is simple: Aradel has moved from having exposure to a giant upstream business to effectively controlling one.

And scale changes everything (yes, size matters...sometimes).

According to some analysts' estimates, consolidated production could rise to 48.7 mmboe in 2026, increasing to 68.1 mmboe by 2028 as RAEC ramps production toward its longer-term targets.

But here is where the story gets even more interesting.

At the same time that Aradel is becoming a materially larger company, oil prices have been unexpectedly supportive.

The geopolitical tensions in the Middle East have inserted a risk premium into global oil markets, with Brent spending much of early 2026 around the $100/bbl mark, even if analysts expect prices to normalize over time.

For an upstream oil company, price matters immensely.

If you own a business producing meaningfully more barrels while simultaneously selling those barrels at a higher price than previously expected, operating leverage kicks in hard.

Personally, I believe upstream gross margins could expand to over 56% in 2026, while group EBITDA may cross $1.2 billion. I expect revenue to rise to about $2.4 billion in 2026 under the new consolidated structure too.

Now, before anyone accuses this of sounding overly euphoric, there are important caveats. Oil is cyclical.

The same geopolitical premium helping oil prices today could disappear tomorrow. If tensions in the Middle East ease faster than expected and Brent drifts back toward the $65 to $70 range, earnings expectations would need to be revised lower. I am aware that Aradel is benefiting from tailwinds that may not last forever.

There is also execution risk...

Much of the upside case depends on RAEC continuing to ramp production smoothly toward its targets. Operational bottlenecks, underperforming wells, delays or integration issues could all slow the earnings trajectory investors are currently beginning to price in. The refinery business also faces timing risks after the expansion timeline shifted from late 2025 to early 2027. None of these risks are fatal, but they matter.

Still, even after accounting for those risks, one question remains difficult to ignore:

Is the market fully pricing in the new Aradel?

This is where the bull case becomes harder to dismiss.

Personally, I value the stock at about NGN2,500 per share (this valuation is not driven by one heroic assumption. It comes from a sum-of-the-parts framework that separately values the upstream business and refinery segment).

Interestingly, even on reserve-based peer comparisons, Aradel does not appear outrageously priced. On an EV/2P reserves basis, it trades broadly around peer averages despite arguably having a higher quality, newly consolidated reserve base through RAEC. That suggests the market may still be treating Aradel partly like the company it used to be, rather than the one it is becoming.

And then there is the dividend conversation.

This is probably the question many retail investors care about most.

Though the management has not yet announced a formal post-consolidation dividend policy, which is understandable given the enlarged balance sheet and integration process. But if Aradel were to broadly maintain its historical approach of paying the higher of 50% of PAT or 20% of operating cash flow, dividend capacity could increase materially simply because the earnings and cash generation base is now much larger.

That said, expecting management to aggressively distribute cash immediately may be optimistic. Debt reduction, operational integration and reinvestment into growth will likely compete for attention. Investors expecting an overnight windfall could be disappointed.

But perhaps that misses the bigger picture.

The real debate around Aradel today is not whether next year’s dividend will be slightly higher or lower.

It is whether the market has fully internalized that this is now a fundamentally different company.

For years, Nigerian investors have often been slow to re-rate businesses after transformational shifts, particularly when the change is buried in accounting consolidation and not immediately obvious in headline earnings. Markets sometimes anchor themselves to old narratives long after reality has moved on.

Aradel may be testing that tendency in real time.

Because if the underlying assumptions prove broadly right, investors are not looking at the same Aradel that traded a few years ago.

They are looking at something significantly larger, more cash generative, and potentially more valuable.

PS. This is not financial advice.

[The NGX Plug @TheNGXPlug]

Aradel Is Bigger Than The Market Thinks

Before going further, it is important to note that I am bias towards Aradel, I have a decent position in them too. A post about that can be found here: https://t.co/Gk7eHiXb3z

So lets get into it.

Every now and then, a listed company changes so fundamentally that looking at it through the lens of its old numbers stops making sense.

That may well be where we are with Aradel.

For many investors, Aradel is still the company they came to know over the last few years: a well-run indigenous oil producer with solid cash flows, a refinery business that added some diversification, and a sometimes rewarded shareholders.

The problem with that view is that the Aradel of today is not the Aradel of yesterday.

I would like to make a somewhat compelling argument that the market may still be underestimating just how much the business has changed following its acquisition of an additional 40% stake in ND Western, completed in December 2025.

The transaction pushes Aradel’s effective economic interest in Renaissance Africa Energy Company (RAEC) to 53.3%, crossing the threshold for full consolidation. In plain English, this means Aradel is no longer merely taking a share of profits from RAEC. It is now bringing the business fully onto its books, including revenues, production, assets, debt and cash flows.

That distinction matters more than many people appreciate.

Before now, Aradel’s investment story was partly obscured. Investors could see earnings flowing in from associated businesses, but the economics beneath were harder to fully appreciate because they sat outside the reported operating line. Going forward, the company begins to look very different. Bigger. More asset-heavy. More cash generative. And perhaps more deserving of a different valuation framework altogether.

The easiest way to think about this is simple: Aradel has moved from having exposure to a giant upstream business to effectively controlling one.

And scale changes everything (yes, size matters...sometimes).

According to some analysts' estimates, consolidated production could rise to 48.7 mmboe in 2026, increasing to 68.1 mmboe by 2028 as RAEC ramps production toward its longer-term targets.

But here is where the story gets even more interesting.

At the same time that Aradel is becoming a materially larger company, oil prices have been unexpectedly supportive.

The geopolitical tensions in the Middle East have inserted a risk premium into global oil markets, with Brent spending much of early 2026 around the $100/bbl mark, even if analysts expect prices to normalize over time.

For an upstream oil company, price matters immensely.

If you own a business producing meaningfully more barrels while simultaneously selling those barrels at a higher price than previously expected, operating leverage kicks in hard.

Personally, I believe upstream gross margins could expand to over 56% in 2026, while group EBITDA may cross $1.2 billion. I expect revenue to rise to about $2.4 billion in 2026 under the new consolidated structure too.

Now, before anyone accuses this of sounding overly euphoric, there are important caveats. Oil is cyclical.

The same geopolitical premium helping oil prices today could disappear tomorrow. If tensions in the Middle East ease faster than expected and Brent drifts back toward the $65 to $70 range, earnings expectations would need to be revised lower. I am aware that Aradel is benefiting from tailwinds that may not last forever.

There is also execution risk...

Much of the upside case depends on RAEC continuing to ramp production smoothly toward its targets. Operational bottlenecks, underperforming wells, delays or integration issues could all slow the earnings trajectory investors are currently beginning to price in. The refinery business also faces timing risks after the expansion timeline shifted from late 2025 to early 2027. None of these risks are fatal, but they matter.

Still, even after accounting for those risks, one question remains difficult to ignore:

Is the market fully pricing in the new Aradel?

This is where the bull case becomes harder to dismiss.

Personally, I value the stock at about NGN2,500 per share (this valuation is not driven by one heroic assumption. It comes from a sum-of-the-parts framework that separately values the upstream business and refinery segment).

Interestingly, even on reserve-based peer comparisons, Aradel does not appear outrageously priced. On an EV/2P reserves basis, it trades broadly around peer averages despite arguably having a higher quality, newly consolidated reserve base through RAEC. That suggests the market may still be treating Aradel partly like the company it used to be, rather than the one it is becoming.

And then there is the dividend conversation.

This is probably the question many retail investors care about most.

Though the management has not yet announced a formal post-consolidation dividend policy, which is understandable given the enlarged balance sheet and integration process. But if Aradel were to broadly maintain its historical approach of paying the higher of 50% of PAT or 20% of operating cash flow, dividend capacity could increase materially simply because the earnings and cash generation base is now much larger.

That said, expecting management to aggressively distribute cash immediately may be optimistic. Debt reduction, operational integration and reinvestment into growth will likely compete for attention. Investors expecting an overnight windfall could be disappointed.

But perhaps that misses the bigger picture.

The real debate around Aradel today is not whether next year’s dividend will be slightly higher or lower.

It is whether the market has fully internalized that this is now a fundamentally different company.

For years, Nigerian investors have often been slow to re-rate businesses after transformational shifts, particularly when the change is buried in accounting consolidation and not immediately obvious in headline earnings. Markets sometimes anchor themselves to old narratives long after reality has moved on.

Aradel may be testing that tendency in real time.

Because if the underlying assumptions prove broadly right, investors are not looking at the same Aradel that traded a few years ago.

They are looking at something significantly larger, more cash generative, and potentially more valuable.

PS. This is not financial advice.

[The NGX Plug @TheNGXPlug]

My ARADEL Investment Journey
Most of us have heard the phrase, “time in the market beats timing the market.” It sounds simple, but in my experience, it has proven true.

I started buying ARADEL shares in January 2025. My investment thesis was based on its 9M’24 unaudited results.

At the time, ARADEL had grown revenue by 30% in USD terms to about $274 million. This was driven by higher production volumes across crude oil, gas, and refined products. I expected the company to continue leveraging its existing assets and newly acquired assets from SPDC to drive further volume growth.

Based on this conviction, I purchased 3,460 units at an average price of ₦540.90 per share, investing approximately ₦1.8 million.

As the year progressed, the company delivered strong results and the share price appreciated accordingly.

Later, I bought an additional 1,910 units at ₦770 per share, costing ₦1,470,700. In total, I invested ₦3,270,700.

Today, that investment is worth ₦6,975,630, in just over a year.

When I bought at ₦770, my price target was around ₦1,050. At the current price of ₦1,299, the stock has exceeded my expectations. Because I remain well in profit and still believe in the fundamentals, I can continue accumulating if liquidity allows.

However, that may not be suitable for everyone, especially short-term investors or those whose capital or risk tolerance cannot withstand potential retracements.

Why I Still Believe in ARADEL
I maintain a positive long-term view on ARADEL.

Indigenous oil and gas players generally have a stronger grasp of the local regulatory environment and are better positioned to unlock shareholder value.

Despite ongoing industry M&A activity, significant opportunities remain. Approximately 10 oil wells holding about 2,006mmboe of reserves are still available through IOC and NNPC JV divestments. ARADEL is well positioned to capitalise on these opportunities.

The management team has demonstrated strong execution capability. Following the acquisition of OML 34 via ND Western, crude oil and gas production increased meaningfully.

Given that ARADEL shares similar partnership structures across ND Western and Renaissance Africa Energy, there is reason to expect that the SPDC acquisition will also be value accretive.

The company benefits from:
#1. Underutilised gas processing and refining capacity
#2. Access to long-term debt capital
#3. Diversification through stakes in ND Western, Renaissance Africa Energy, and Chappal Energies

These factors could extend reserve life beyond the current 10.7 years and sustain strong growth metrics.

FY25 Performance Overview
In FY25, ARADEL reported:
- Revenue up 17% year on year to USD459.63 million
- Gross profit down 23% to USD184.57 million
- Gross margin compressed to 40%, from 61% in FY24

The decline in gross margin was largely due to an 81% increase in cost of sales, driven by:
- 40% rise in depreciation and amortisation
- Higher royalties
- Increased crude handling costs

Operational Performance
- Crude oil production increased 3% to 14.4 kbbls/d
- Gas production surged 59% to 51.4 mmscf/d
- Refined product volumes grew 18% to 313.4 million litres

The sharp rise in gas production was driven by new gas wells, including Ogbele 16, and enhanced recovery initiatives.

Other Income and Acquisitions
Other income rebounded to USD144.52 million from a loss in FY24, largely due to a USD132.5 million bargain purchase gain from acquiring a 40% stake in ND Western for USD300 million, below its estimated fair value of USD433 million.

Profitability
- Operating profit declined 9% to USD179.44 million
- Net finance costs fell 18% to USD3.47 million
- Share of profit from associates increased fivefold to USD129.83 million

Profit before tax rose 43% to USD305.79 million.

Although tax expense increased modestly, the effective tax rate fell to 14%, largely because the bargain purchase gain boosted PBT without a corresponding tax charge.

As a result:
- Profit after tax increased 51% to USD264.60 million
- Net profit margin expanded to 58%, from 45% in FY24

My Outlook
Looking ahead to FY26, I expect further earnings growth.

The core business remains solid, and the yield from the ND Western acquisition comfortably exceeds the cost of debt used to finance the transaction. This positive spread should enhance equity returns.

For me, this reinforces the principle that disciplined conviction and time in the market, when backed by strong fundamentals, can be more powerful than trying to time short-term price movements.

That said, this is not financial advice. Every investor must align decisions with their own risk tolerance, liquidity profile, and investment horizon.

[The NGX Plug @TheNGXPlug]

Ladies and gentlemen, what are your dividend predictions for Aradel?

Maybe later today I’ll write a post regarding my thoughts on Aradel & target price I’m looking at.

[The NGX Plug @TheNGXPlug]

@Officially_Kriz Haha valid. They did say they’d release it on or before May 29TH.

Perhaps they’ve earned that trust…

[The NGX Plug @TheNGXPlug]

@JAMBHQ Take charge of it is killing me bro

[The NGX Plug @TheNGXPlug]

New week huh

[The NGX Plug @TheNGXPlug]

@HadizaB85863870 Let him put half his networth in Golden Guinea. 🙏🏽
Then the balance in OMATEK.

Not financial advice o.

[The NGX Plug @TheNGXPlug]

Realistically, what do you expect Aradel to declare as its FY2025 dividend?

[The NGX Plug @TheNGXPlug]

More of this.

[Premium Times @PremiumTimesng]

In a rare show of toughness against a corrupt official, the judge ordered that the sentences attached to each of the 12 counts run consecutively, not concurrently. A concurrent term would have amounted to seven years’ imprisonment, the highest imposed for any of the counts.

https://t.co/FyHET0AezU

[The NGX Plug @TheNGXPlug]

@Promythious Food prices aren’t high enough. When food prices become higher, the sellers make more money. (Jk jk pls) 😅😅

[The NGX Plug @TheNGXPlug]

@ngnstx Won so pe kin ma lo sun le
Wipe kin order Rosé
Moni mo like champagne oh
Emi Omo ope o

🤣🤣

[The NGX Plug @TheNGXPlug]

@carter6f Imagine having this mindset in your 50s. Jheeze.

[The NGX Plug @TheNGXPlug]

@JAMBHQ Why do you abhor excellence?

[The NGX Plug @TheNGXPlug]

@AdewaleTinubu Enjoyed watching this. Mostly because I agree with a couple of the decisions and the lack of hesitation with making them.