Aradel Holdings Plc, an indigenous energy company, has announced the successful completion of its acquisition of the Olo and Olo West Marginal Fields from the TotalEnergies/NNPC Joint Venture for $19.5 million.
This strategic move, disclosed alongside the company’s 2024 audited results, marks a milestone in Aradel’s expansion strategy, positioning it for multi-field cluster development in the Niger Delta region.
Strategic acquisition & expansion
The Olo and Olo West Marginal Fields acquisition underscores Aradel’s commitment to consolidating its upstream portfolio and enhancing its asset base.
According to the company’s, the fields will complement Aradel’s existing operations, including the Ogbele Field (OML 54), Omerelu (PPL 247), and OPL 227 joint venture. The deal aligns with Aradel’s long-term vision of creating a contiguous production hub, optimizing infrastructure, and reducing operational costs through shared facilities.
A report by Africa Oil & Gas Report highlights that the Olo fields, located in the prolific Niger Delta basin, hold substantial untapped reserves.
With this acquisition, Aradel aims to leverage its technical expertise to ramp up production, targeting an integrated development approach that includes crude oil, gas, and refined products. The company plans to deploy advanced drilling technologies and infrastructure synergies to maximise output from the newly acquired assets.
Multi-Field cluster development strategy
With the Olo and Olo West fields now under its belt, Aradel is poised to implement a multi-field cluster development strategy, as detailed in the Africa Oil & Gas Report. This approach involves integrating nearby fields to streamline production, reduce downtime, and lower unit costs. The Olo fields, situated close to Aradel’s existing Ogbele asset, will benefit from shared infrastructure, including pipelines, processing facilities, and export terminals.
Industry analysts note that cluster development is a game-changer for marginal fields, which often face economic viability challenges due to high standalone development costs. By pooling resources, Aradel can achieve economies of scale, enhance recovery rates, and extend the lifespan of its assets. The company has also secured a 5.14 percent equity stake in Chappal Energies Mauritius Limited, further diversifying its portfolio across Africa’s upstream sector.
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Revenue & profit growth
Aradel’s revenue leaped to N581.2 billion in 2024, up from N221.1 billion in 2023, driven primarily by a 244.6 percent increase in export crude oil revenue, which accounted for 64.3 percent of total revenue.
The company’s profit after tax also saw an extraordinary rise to N259.1 billion, compared to N53.7 billion in the previous year. This growth was fueled by higher production volumes, improved crude oil evacuation systems, and strategic acquisitions, including the Olo and Olo West Marginal Fields.
Strong operational performance
Aradel reported significant improvements in its operational metrics. Crude oil production increased by 41.2 percent to 13,751 barrels per day (bbls/day), while gas production rose by 21.9 percent to 32.4 million standard cubic feet per day (mmscfd). The company also sold 240.5 million litres of refined petroleum products, marking a 14.5 percent increase from 2023. These gains were supported by enhanced utilisation of the Trans Niger Pipeline (TNP) and the Alternative Crude Evacuation (ACE) system, which reduced losses and boosted efficiency.
Expansions and investments
The year 2024 was marked by strategic moves to solidify Aradel’s market position. The company completed the acquisition of marginal fields from TotalEnergies/NNPC and secured a 5.14 percent stake in Chappal Energies Mauritius Limited. Additionally, Aradel’s listing on the Nigerian Stock Exchange (NGX) in October 2024 improved share liquidity and underscored its commitment to shareholder value. The company also advanced its drilling campaigns, with Phase 1 completed and Phase 2 underway, further strengthening its production capabilities.
Robust cash flow & dividend declaration
Aradel generated N311.9 billion in operating cash flow, a 124.4 percent increase from 2023, reflecting strong margins and efficient operations. Despite higher capital expenditures of N136.8 billion (up 179.9 percent YoY) for drilling and infrastructure, the company maintained healthy free cash flow of N175.1 billion.
In a move to reward shareholders, Aradel proposed a final dividend of N22 per share, subject to approval at the upcoming Annual General Meeting.