Crude Production and Export Dominance
Aradel Holdings Plc released its unaudited H1 financial statement for the six months ended June 30, 2026, showing a massive expansion in operations. The company benefited from global oil price spikes linked to supply chain disruptions from the US-Israeli War against Iran, which erupted in February 2026 and impacted the critical Strait of Hormuz energy chokepoint.
Average daily oil production jumped by 258%, while average daily gas output increased by 1,121%. This operational surge drove revenue up nearly seven times to N2.49 trillion, compared to N368.08 billion in the corresponding period of 2025. Crude oil sales remained the dominant contributor, generating N1.98 trillion or approximately 79% of total revenue, and delivering N545.70 billion in pre-tax profit.
Export sales outside Nigeria accounted for N1.94 trillion, representing nearly 78% of total revenue. Meanwhile, gas sales contributed N512.10 billion, and the refining business at the Ogbele field in Rivers State, which can process 11,000 barrels of crude daily, generated N129.44 billion from refined products, up 8.1%.
Rising Costs and Tax Drag on Earnings
Despite the revenue boom, Aradel's after-tax profit grew at a much slower pace, rising 30% to N191.04 billion from N146.39 billion. This divergence was driven by a sharp escalation in operating and finance costs. Cost of sales rose to N1.05 trillion from N204.92 billion, driven by royalties and statutory expenses of N415.49 billion, depreciation and amortisation of N319.73 billion, and operational and maintenance expenses of N212.73 billion.
Finance costs rose to N326.14 billion from N11.08 billion, driven by interest expenses on bank borrowings and the unwinding of decommissioning obligations. Additionally, other losses, which included a N489.42 billion underlift position and foreign exchange-related losses, totalled N213.1 billion compared to a gain of N8.6 billion in the prior year. Share of profit from associates fell to zero from N71.3 billion in H1 2025.
A massive 1,150.4% surge in tax spending to N561.7 billion further compressed the bottom line, despite a 293.4% leap in pre-tax profit to N752.71 billion. However, the company's EBIT margin improved to 42.4% from 32.2% in the prior-year period, and gross profit expanded to N1.44 trillion, up 807% from N163.16 billion.
Balance Sheet and Market Reaction
Aradel's balance sheet strengthened during the period, with total assets rising 10% to N10.88 trillion from N9.90 trillion at December 2025. Cash and cash equivalents rose 14% to N1.72 trillion from N1.50 trillion. Operating activities generated N975.61 billion in cash, despite tax payments of N429.88 billion.
According to CEO Adegbite Falade, the firm price environment supported performance and helped reduce net debt to N46.5 billion, down from N475.1 billion in the prior year. Total external debt fell 10% to N1.81 trillion from N2.00 trillion at December 2025.
On the Nigerian Exchange, Aradel's share price closed at N1,526.8 on Friday, July 31, 2026, maintaining the level it has held since July 10. This price represents a 127.88% year-to-date increase from the N670 close at the end of 2025. The H1 performance builds on a strong 2025 financial year, where Aradel reported a pre-tax profit of N835.0 billion and paid a total dividend of N33.00 per share.
