Due to projected poor dividend payouts by Oil and Gas companies listed on the Nigerian Exchange Limited (NGX), the NGX Oil & Gas index has emerged as the worst-performing indicator, with a -7.82 percent YtD return as of March 21, 2025.
Also, the likes of the NGX Insurance Index and NGX Industrial Goods Index closed the period at – 4.51 percent and -2.31 percent, respectively.
With a return of 170 percent ini 2024, the NGX Oil & Gas Index outperformed the NGX Banking Index, and NGX Consumer Goods Index, among other indices as the best-performing index, attributable to reforms by the federal government.
So far in 2025, the NGX Oil & Gas stocks have seen downward momentum over delayed dividend payout to shareholders and unimpressive 2024 unaudited results and accounts.
The index has recorded negative returns to shareholders over the past few years. For instance, in 2018, the NGX oil and gas declined by 8.61 percent. This indicates that, on average, investors in this sector experienced a negative return of 8.61 percent for the year.
Similarly, the sector declined by 14.6 percent in 2019. Also, in 2020 and 2021, the index recorded a loss of 13.03 percent and 8.73 percent, respectively.
However, succor came the way of investors as the sector witnessed a turnaround in performance, achieving a gain of 98.3 percent in 2023.
Despite releasing 2024 unaudited results and accounts for the period ended December 2024, investors’ negative sentiment has continued to rock the listed Oil & Gas companies.
Analysis of trading numbers showed that Etern Plc, out of seven listed Oil & Gas companies appreciated in stock price, while Seplat Energy Plc has remained flat since 2024.
The stock price of Eterna closed on March 21, 2025, at N38 per share, gaining 56.4 cents YtD from N24.30 per share it closed for trading in 2024. On the other hand, Seplat Energy traded flat at N5,700 despite an impressive 2024 financial year.
As of the close of trading activities on March 21, 2025, the stock price of MRS Oil Nigeria Plc has dropped by 25.6 percent YtD to N162.00 per share from N217.8 per share it closed for trading in 2024, while
Oando Plc’s stock price depreciated by 22.7 percent YtD from N66.00 per share to close on March 21, 2024, at N51.00 per share.
With a drop of 22.7 percent YtD, the value of Oando has depreciated by N186.47 billion as of March 21, 2025.
In the period under review, the stock price of Conoil dropped by 14.46 percent YtD to close on March 21, 2025, at N331.20 per share from N387.2 per share it closed for trading in 2024.
In addition, the stock price of Aradel Holdings Plc fell by 12.7 percent to N522.00 per share as of March 21, 2025, from N598.00 per share it closed in 2024, while Totalenergies Marketing Nigeria Plc’s stock price depreciated by 8.7 percent YtD to close March 21, 2025, at N637.00 per share from N698.00 per share it closed the previous year.
Capital market analysts linked the performance of the sector in -7.28 percent YtD to the late filing of 2024 results and accounts and declaring dividend payout to investors.
The Vice President, of Highcap Securities Limited, Mr. David Adnori, said, “The Oil & Gas sector was propelled in recent times by Oando. Oando’s stock price appreciated significantly and when Aradel Holdings was listed, the price was very high and it drove the index growth in 2024.
“However, since the beginning of the year, Oando and Aradel Holdings have taken a serious beating. Totalenergies also lost momentum as the released 2024 unaudited result and accounts were not impressive, leading to investors pulling out.”
“The NGX Oil & Gas Index’s worst performance has to do with listed companies not with the industry itself. Investors’ confidence around Oando dropped and Aradel Holdings could not sustain the high tempo which it migrated from NASA to NGX. Totalenergies did not perform well in the fourth quarter of 2024. All these have impacted the NGX Oil & Gas Index in its YtD performance, “ he added.
The Managing Director, of Globalview Capital Limited, Mr. Aruna Kebira, attributed the downward movement in the NGX Oil & Gas index to profit-taking in Oando.
He said, “The management of Oando proposed a bonus of one new ordinary share for every 12 existing ordinary shares and other listed companies’ bonuses have a terminal date of 90 days. The management put a bonus for three years, which is to be credited for 36 months. Investors felt the management of Oando was taking them for granted and opted to take profit.”
He added that the poor performance in the NGX Oil & Gas is based on investors’ sentiment that Conoil, among others may declare a dividend that is not commensurate with their 52-week high.
“Investors believed that the dividend they are expecting from listed Oil & Gas companies cannot be commensurate with their prices. So they are exiting ahead of the dividend payout. Investors can exit quietly now when the dividends are not declared. When the dividends are declared and it is worst, a lot of investors will want to sell immediately, which is the worst, ” he added.
On his part, the National Coordinator Independent Shareholders Association Of Nigeria (ISAN). Mr. Moses Igbrude attributed the NGX Oil & Gas -.7.82 percent YtD performance to the late filing of the 2024 audited result and declaration of dividend payout.
He noted unstable global oil prices over President Donald Trump’s policies have sent a signal to investors to trade the oil & gas stocks with caution.
“The 2024 audited results will tell investors which stock will appreciate. We must consider global and local trends to downward movement in the Oil & Gas stocks. The dividend payout for 2024 will determine movement in Oil & Gas stocks. Before now, the stock price of listed Oil & Gas has appreciated and now is time for price correction,” he added.
