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Aradel Holdings Plc is going to increase its share of the oil industry as the recent acquisition of some assets would magnify the company’s 2P Oil Reserves to 664.7 Million barrels of oil equivalents (mmboe) from 35.9mmboe, according to a latest report by investment firm Chapel Hill Denham.
2P reserves means proved plus probable reserves. “Proved reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
Crude oil production increased to 65.5kbbls/day from 15.3kbbls/day, and gas output scaled up to 145.3mmscf/day from 50.6mmscf/day.
In the oil and gas parlance, kbbl/d means thousand barrels per day.
“We expect the strategic initiatives undertaken by Aradel’s management, most notably the acquisition of an additional 40 percent equity interest in ND Western, which increases Aradel’s effective stake to 81 percent, to be earnings-accretive and value-enhancing,” said analysts at Chapel Hill led by Tajudeen Ibrahim.
“This is considering that the transaction further strengthens the company’s fundamentals and has supported renewed bargain-hunting interest in the stock,” said analysts at Chapel Hill Denham.
The leading indigenous integrated energy company, consummated a deal by acquiring additional 40 percent additional equity interest in ND Western Limited (NDW), following the fulfilment of all regulatory and contractual conditions precedent.
NDW holds a 45 percent participating interest in OML 34 (OML 34), a producing Oil Mining Lease located in the Western Niger Delta and owns 50 percent of the share capital of Renaissance Africa Energy Holding Company Ltd, the parent company of Renaissance Africa Energy Company Limited which operates the Renaissance Joint Venture.
This acquisition is consistent with Aradel’s long-term strategy of disciplined portfolio consolidation, asset base expansion, and sustainable value creation. It further strengthens the Company’s position within Nigeria’s upstream oil and gas sector, enhances operational scale, and supports improved efficiency and resilience across the Company’s asset portfolio.
Upon consolidation, Aradel’s indirect ownership in Renaissance Africa Energy Company Limited increased to 53.3 percent from 33.3 percent, according to Chapel Hill Denham.
“The completion of this acquisition represents a further step in the execution of our growth and consolidation strategy. Increasing our equity interest in ND Western reinforces Aradel’s position as a leading indigenous integrated energy company and enhance s our ability to drive long-term value for shareholders through scale, operational efficiency, and portfolio optimization,” said Adegbite Falade, Chief Executive Officer of Aradel Holdings Plc.
Aradel Price Target hits N1,500
Post-acquisition, Aradel’s revenue is expected to rise to $2.14 billion, from $349.95 million. Profit is expected to move to $679.51 million after the acquisition, from $104.91 million, according to data from Chapel Hill Denham.
Using an enterprise value (EV)/2P valuation basis, analysts at Chapel Hill Denham benchmarked Aradel against a range of global peers and derived an adjusted average multiple of 4.44x at the lower end and 6.90x at the upper end.
Applying these multiples to post-consolidation metrics implies an enterprise value (EV) in the range $2.95 billion – $4.59 billion.
“After adjusting for debt and cash balances as of 9M-25, we estimate a fair value range for Aradel of N1,009 –N1,544 per share, representing upside potential of 37 percent – 110 percent relative to the current market price,“ said analysts at Chapel Hill Denham.
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