Following the significant increase in price of Premium Motor Spirit and other products, a total of six oil & Gas companies listed on the Nigerian Exchange Limited (NGX) generated N2.97 trillion revenue in in nine months of 2024.
This represents an increase of 115 per cent increase from N1.39 trillion generated in corresponding period of 2023.
Profit before tax stood at N626.3billion, about 384 per cent increase from N129.43 billion reported in nine months of 2023.
The companies; Conoil Plc, Seplat Energy Plc, Aradel Holdings, Eterna Plc, Totalenergies Marketing Nigeria Plc and MRS Oil Nigeria Plc have witnessed huge turnaround on the back of federal government reforms aimed at stimulating growth, increase transparency, and attract investment in the oil and gas sector.
Also, the reforms are aimed at enhancing operational efficiencies, increasing local participation, and encouraging a shift toward cleaner energy practices.
Part of the reforms include: Petroleum Industry Act (PIA), deregulation of the downstream sector, gas infrastructure development and promotion, ease of doing business initiatives, among others.
Analysis of the firms' unaudited results for the 9 months ended September 30, 2024, showed that Seplat Energy declared N366.7 billion profit before tax, about 483.4 per cent increase from N62.85 billion reported in corresponding period of 2023, while Aradel Holdings, a newly listed oil & gas company posted N191.5 billion profit before tax in nine months of 2024, about 412 per cent increase from N37.37billion reported in nine months of 2023.
In the same vein, Totalenergies announced N41.85 billion profit before tax in nine months of 2024, up by 151.8 per cent from N16.62 billion reported in nine months of 2023 while Conoil Plc declared N15.24 billion profit before tax in nine months of 2024, representing an increase of 38 per cent from N11.05billion in nine months of 2023.
In addition, MRS reported N9.37 billion profit before tax in nine months of 2024, 89 per cent growth from N4.96 billion in nine months of 2023, while Eterna migrated from a loss of N3.4billion in nine months of 2023 to N1.68billion in nine months of 2024.
Meanwhile, according to National Bureau of Statistics (NBS), the average retail price paid by consumers for PMS for September 2024 was N1030.46, indicating a 64.55 per cent increase compared to the value recorded in September 2023 (N626.21).
NBS also revealed that the average retail price of Automotive Gas Oil (Diesel) paid by consumers increased by 59.28 per cent on a year-on-year basis from a lower cost of N890.80 per liter recorded in the corresponding month of last year (i.e., September 2023) to a higher cost of N1418.83 per liter in September 2024.
"The average retail price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) increased by 4.19per cent on a month-on-month basis from N6,430.02 recorded in August 2024 to N6,699.63 in September 2024. On a year-on year basis, this increased by 59.90per cent from N4,189.96 in September 2023," NBS added.
Also, the reforms reflected on stock prices and corporate earnings of listed oil & gas companies on the NGX amid foreign exchange losses.
According to THISDAY investigation, the stock price of Seplat Energy closed November 8, 2024 at N5700 per share, gaining 147 per cent year-to-date YtD from N2,310.00 per share it opened for trading this year.
The stock price of MRS Oil Nigeria Plc closed trading at N132 per share November 8, 2024, gaining 25.7 per cent YtD from N105 per share, while Conoil Plc closed November 8, 2024 at N260 per share, an increase of 209.9 per cent YtD growth from N83.90per share the stock opened this year for trading.
In addition, Totalenergies Marketing Nigeria hit N673.9 per share, representing 75 per cent YtD growth from N385 per share it closed for trading in 2023.
Currently at 133.07 per cent YtD growth as of November 8, 2024, the NGX Oil & gas index is the best performing index on NGX amid significant growth by these oil & gas companies' stocks.
Capital market analysts have attributed the hike in these companies' stock prices to reforms in the oil & gas sector, urging investors to take positions in companies with fundamentals.
Speaking, the Vice President, Highcap Securities Limited, Mr. David Adnori, explained that the growth in the period under review was driven by increase in petroleum price, stressing that increasing business activities, also a driving factor
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According to him, "The crude oil price per barrel in the global commodity market was low in 2020 and it affected the price of petrol. The federal government was reliant on increasing the price of petrol at some time. Investors also compensated these companies considering their stock price appreciating so far in 2024. The growth recorded in revenue by these companies has a lot to do with improvement in business activities than the hike in price of petroleum products."
The Chief Operating Officer of InvestData Consulting Limited, Mr Ambrose Omordion, attributed the increase in revenue of these companies to higher-margin crude oil products, stressing that the ease of movement also contributed to revenue and profit.
According to him, "These companies reported an increase in revenue due to higher margin in products they sold this year. The reforms in the oil & gas sector have impacted on revenue that translates into profit."
