Closing 2024 at 160.01%, Oil & Gas Leads Others as Best Performing Stocks on Nigerian Exchange

Kayode Tokede

As the Nigerian stock market closed the 2024 financial year with a gain of 37.65 per cent on investors’ return, the stocks of the oil and gas sector emerged as the best-performing index on the Exchange, an analysis of the market performance for the year under review has revealed.
The companies in the oil and gas sector recorded significant growth in stock prices amid the federal government’s reforms in recent years to stimulate growth, increase transparency, and attract investment in the oil and gas sector.

These reforms were aimed at enhancing operational efficiencies, increasing local participation, and encouraging a shift toward cleaner energy practices.
The enactment of the Petroleum Industry Act (PIA), deregulation of the downstream sector, gas infrastructure development and promotion, and ease of doing business initiatives, among others, were some of the reforms.
Some of the companies in the NGX Oil & Gas Index are: Seplat Energy Plc, Conoil Plc, Eterna Plc, Totalenergies Marketing Nigeria Plc, and Japaul Gold & Ventures Plc.

Amid these reforms, the stock price of Seplat Energy closed in 2024 at N5,700 per share, gaining 147 per cent from the N2,310.00 per share closed for trading in 2023.
The stock price of Conoil closed the year at N387.20 per share, representing an increase of 387.2 per cent growth from the N83.90 per share the stock closed for trading the previous year.
 Eterna closed the year under review at N24.3 per share, representing an increase of 75.45 per cent from the opening price of N13.85 per share at the beginning of trading in 2024.

During the year, TotalEnergies Marketing Nigeria listed among the NGX Oil & Gas stock hit N698 per share, representing 81.3 per cent YtD growth from the N385 per share it closed for trading in 2023.
 Oando Plc appreciated by 529 per cent to close 2024 at N66.00 per share from N10.50 per share at the beginning of the year, while MRS Oil Nigeria closed 2024 at N217.8 per share, up by 107.4per cent from the N105 per share the stock opened for trading this year.

Amid a significant increase in the price of petrol, among other products, a total of six listed oil and gas companies on the NGX generated an estimated N626.3 billion profit before tax in nine months of 2024.
This is about a 384 per cent increase from the N129.43 billion reported in the first nine months of 2023.

From the unaudited nine months that ended September 30, 2024, Seplat Energy declared N366.7 billion profit before tax, about 483.4 per cent increase from the N62.85 billion reported in the corresponding period of 2023, while Aradel Holdings, a newly listed oil and gas company posted N191.5 billion profit before tax, representing about 412 per cent increase from the N37.37billion reported in nine months of 2023.

 TotalEnergies also 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 declared N15.24 billion profit before tax, representing an increase of 38 per cent from the N11.05 billion recorded during the same period in 2023.
In terms of revenue, Seplat Energy, and five others generated N2.97 trillion in the period under review, representing an 115 per cent increase from the N1.39 trillion generated in the corresponding period of 2023.
Analysts have attributed the hike in these companies’ stock prices to the reforms in the oil and gas sector.

A group of analysts at Cordros Securities in a report stated that the Nigerian downstream oil and gas sector witnessed significant strides in 2024, including the transition to market-reflective prices and the increasing refining capacity.
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.
 “These companies reported an increase in revenue due to higher margins in products they sold this year. The reforms in the oil and gas sector have impacted on revenue that translates into profit,” he added.