Aradel Holdings Plc, a prominent Nigerian energy company, has successfully completed its acquisition of the Olo and Olo West Marginal Fields for $19.5 million from the TotalEnergies/NNPC Joint Venture.
This acquisition marks a significant milestone in the company’s expansion strategy and was disclosed alongside Aradel’s 2024 audited financial results, further emphasizing its commitment to a multi-field cluster development strategy within the Niger Delta region.
By securing the Olo and Olo West fields, Aradel is enhancing its upstream portfolio and expanding its asset base.
These fields will complement its existing operations, which include the Ogbele Field (OML 54), Omerelu (PPL 247), and the OPL 227 joint venture.
The acquisition aligns with the company’s long-term goal of creating a contiguous production hub that optimizes infrastructure and reduces operational costs through shared facilities.
According to the Africa Oil & Gas Report, the Olo fields, located in the Niger Delta basin, contain substantial untapped reserves.
Aradel plans to leverage its technical expertise to boost production and integrate crude oil, gas, and refined product development.
The company is set to deploy advanced drilling technologies and infrastructure synergies to maximize the output from these newly acquired assets.
With these new fields in its portfolio, Aradel is positioned to implement its multi-field cluster development strategy.
This strategy involves integrating nearby fields to enhance production efficiency, reduce downtime, and lower costs.
The close proximity of the Olo fields to Aradel’s Ogbele asset will enable the company to utilize shared infrastructure, such as pipelines, processing plants, and export terminals.
This clustering approach is especially beneficial for marginal fields, which often face high standalone development costs.
By pooling resources, Aradel aims to achieve economies of scale, improve recovery rates, and extend the lifespan of its assets.
In addition to the Olo and Olo West acquisitions, Aradel has further strengthened its position in Africa’s upstream sector by acquiring a 5.14 percent equity stake in Chappal Energies Mauritius Limited.
The company’s financial performance in 2024 was stellar, with revenue surging to N581.2 billion, a significant increase from N221.1 billion in 2023.
This growth was largely driven by a 244.6 percent rise in export crude oil revenue, which accounted for 64.3 percent of total earnings.
Aradel’s profit after tax also soared to N259.1 billion, up from N53.7 billion the previous year, fueled by higher production volumes, improved crude oil evacuation systems, and strategic acquisitions like the Olo and Olo West Marginal Fields.
Operationally, Aradel saw impressive gains. Crude oil production increased by 41.2 percent, reaching 13,751 barrels per day (bbls/day), while gas production grew by 21.9 percent to 32.4 million standard cubic feet per day (mmscfd).
The company also sold 240.5 million liters of refined petroleum products, reflecting a 14.5 percent increase from 2023.
These achievements were driven by greater utilization of the Trans Niger Pipeline (TNP) and the Alternative Crude Evacuation (ACE) system, which minimized losses and enhanced efficiency.
Throughout 2024, Aradel made strategic moves to solidify its market position. In addition to completing the acquisition of the marginal fields, the company secured a 5.14 percent stake in Chappal Energies Mauritius Limited and listed on the Nigerian Stock Exchange (NGX) in October 2024, boosting share liquidity and investor confidence.
Aradel also advanced its drilling campaigns, completing Phase 1 and launching Phase 2 to further enhance its production capacity.
The company generated N311.9 billion in operating cash flow, marking a remarkable 124.4 percent increase from the previous year.
This growth was driven by strong margins and operational efficiency. Despite raising capital expenditures to N136.8 billion, a 179.9 percent year-on-year increase for drilling and infrastructure development, Aradel maintained a healthy free cash flow of N175.1 billion.
This strategic expansion and robust financial performance position Aradel Holdings for continued success in the Nigerian energy sector.
