Photo caption: Aradel Holdings logo
Aradel Holdings says it has set aside $20m to acquire Chappal Energies. The fund, it was said, contributed to a decrease in the company’s cash flows from operating activities.
In its unaudited report for the first quarter of 2025, it was stated that the company generated cash flows from operations of N30.6bn in the first quarter of 2025, down from N55.8bn generated in Q1 2024.
That was a decrease of 45.1 per cent, “as Q1 2025 was impacted by the non-receipt of crude and gas sales and other proceeds worth N70.3bn (to be received in Q2 2025), and an increase in restricted cash of $20m set aside for Chappal Energies acquisition.”
In December, Aradel Holdings entered into an agreement to acquire a 5.14 per cent equity interest in Chappal Energies, an energy company focusing on investments in deep value and brownfield upstream opportunities within Africa.
In a statement by the company’s Secretary and Group General Counsel, Titilola Omisore, the Managing Director/Chief Executive Officer, Adegbite Falade, stated that the acquisition is in line with the company’s plan to diversify its asset base while deepening its gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource,” the Aradel boss said.
He added, “We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.”
On December 6, Chappal announced the acquisition of Equinor Nigeria Energy Company, which holds a 53.85 per cent ownership in oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
In the Q1 2025 report, Aradel disclosed that net cash flow used in investing activities was N72.5bn, up 341.5 per cent from N11.7bn year-on-year.
“This increase is mainly driven by cash-financed investment in Renaissance amounting to N20.9bn in Q1 2025, further acquisition of financial assets amounting to N26.7bn (Q1 2024: N2.4bn) and capital expenditure of N29.1bn (Q1 2024: N12.6bn),” it was stated.
The report showed that net cash flows used in financing activities rose to N9.62bn, up 13 per cent from N8.5bn within the same period in 2024, due to net settlement of borrowings.
“A N50.1bn debt financing of the SPDC acquisition was recognised as a non-cash transaction for Aradel; the actual financing cash outflows occurred through ND Western Limited, our associate. This value was excluded from both investing and financing cash flows,” the report added.
The company reported a year-to-date growth in total assets of 4.7 per cent to N1.8tn from N1.7tn as of December 2024.
This increase is primarily attributable to the completion of Renaissance Africa Energy Holdings’ acquisition of the entire equity holding in the Shell Petroleum Development Company of Nigeria in Q1 2025.
Aradel holds a total equity stake of 33.3 per cent (12.5 per cent direct stake and 20.8 per cent through ND Western’s 50 per cent equity stake) in Renaissance.
Assets growth could also be linked to the value of assets of ND Western, the company’s associate, which increased to N495.2bn, up 1.1 per cent year-to-date from N490bn due to share of profit and other comprehensive income for the period.
On the other hand, total liabilities were said to have risen by 13.2 per cent to N391.3bn, down from N345.7bn as of the end of 2024.
“This increase is attributable to higher tax liability estimates from higher performance attained in the period and additional debts for the SPDC acquisition,” it was learnt.
Total equity also increased by 2.6 per cent to N1.44tn from N1.40tn in 2024, primarily due to the retention of total comprehensive income over the period.
The Chief Executive Officer of Aradel Holdings Plc, Mr Adegbite Falade, said the company’s Q1 2025 performance is in line with the desire to build on the momentum that the Company generated in 2024.
“The increase in crude production (and attendant revenues) was because of more volumes from the additional wells drilled, and the continued extended well test at the Omerelu Field. We expect an improvement in Q2, 2025.
“The completion of the acquisition of SPDC by the Renaissance consortium on March 11, 2025, brings to a conclusion a landmark transaction that further enhances our long-term prospects for significant upsides in our pursuit of value creation.
“An outcome of our 2024 financial performance was also the recommendation of NGN22/share in the final year dividend. This is in addition to the interim dividend of NGN8/s
