Nigeria’s oil and gas sector is staging a notable comeback, with the NGX Oil/Gas Index surging more than 5% in the first week of October, bringing the benchmark tantalizingly close to breaking through a critical resistance level that has eluded it for nearly a year.
The sector index opened October trading at 2,523.1 points and has climbed steadily to 2,664.0 points as of October 8, 2025, powered by robust performances from three heavyweight stocks: Aradel Holdings, Seplat Energy, and Eterna Oil. The rally puts the index within striking distance of the psychologically significant 2,700-point level—a threshold that has proven resilient since the sector peaked at 2,712 points in December 2024.
A Rocky Road to Recovery
The current momentum represents a dramatic turnaround for a sector that has spent much of 2025 in the doldrums. Following its December 2024 peak, the oil and gas index tumbled 9.34% through the first quarter of this year, as investors grappled with uncertainty over production levels, regulatory challenges, and broader market volatility.
While a 4.7% rebound in June provided temporary relief, it wasn’t enough to erase the damage—the index still closed the second quarter marginally lower, down 0.86% overall. For much of the year, the sector painted a picture of red candlesticks and cautious sentiment.
But the tide began shifting decisively in the third quarter. Renewed buying interest and stronger price action across select oil and gas counters lifted the sector by 3.51% in Q3, setting the stage for October’s explosive start. Market analysts point to improving fundamentals and a more bullish investor outlook as key drivers behind the reversal.
Aradel: The Anchor Stock
At the heart of the sector’s resurgence is Aradel Holdings, which has emerged as the steady hand guiding the index through turbulent waters. The company delivered an impressive 19.53% return in the third quarter, with its share price climbing from N514.50 at the start of July to N615 by quarter’s end. Trading volumes were substantial, with 195.7 million shares changing hands during the period.
Aradel’s September performance was particularly striking—a 20.59% surge that single-handedly accounted for much of the sector’s quarterly gains, even as an August dip of 3.77% threatened to derail momentum. Given that Aradel commands more than 37% of the NGX Oil & Gas Index with a market capitalization of N2.7 trillion, its movements carry outsized influence on the sector’s overall trajectory.
September proved to be a watershed month for the index, closing with a 5.94% gain—the best monthly performance of the quarter—largely on the back of Aradel’s rally. In October, the stock has added another 2.41%, maintaining its position comfortably above the N600 mark.
Seplat and Eterna Join the Party
While Aradel held the fort through much of Q3, October has seen two additional players step up to amplify the sector’s gains: Seplat Energy and Eterna Oil.
Eterna has been the standout performer in early October, soaring over 23% to trade at N41.50. Technical analysts suggest the stock could test its April 2025 high of around N49.95 if current momentum continues and buying pressure remains robust.
Seplat Energy, the sector’s heavyweight with a market capitalization of N3.5 trillion—representing approximately 48% of the entire index—has also posted solid gains. The stock has risen 10% in October, breaking through a key resistance level near N5,600 to trade around N5,917. As the largest component of the NGX Oil & Gas Index, Seplat’s upward trajectory has been instrumental in pushing the sector closer to the 2,700-point threshold.
Production Gains Fuel Optimism
The recent rally in oil and gas stocks appears to be underpinned by tangible improvements in Nigeria’s upstream sector. According to Senator Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), Nigeria’s daily crude oil output climbed to between 1.7 million and 1.83 million barrels per day between January and July 2025.
Even more encouraging for industry watchers is the increase in active drilling rigs, which surged from 31 to 50 by July—a sign of renewed investment and operational activity in the sector. Senator Lokpobiri disclosed these figures at the Africa Energy Week conference in Cape Town, highlighting the government’s efforts to stabilize production and attract investment.
These production improvements suggest a steadier operating environment for Nigeria’s oil and gas industry, which has long grappled with theft, pipeline vandalism, underinvestment, and regulatory uncertainty. The uptick in output and drilling activity may be providing the fundamental support needed to restore investor confidence and sustain the current rally.
What’s Next?
As the sector approaches the 2,700-point resistance level, market participants will be watching closely to see whether the bulls can maintain their grip. A decisive break above this level could open the door to further gains and potentially pave the way for a test of the December 2024 highs.
However, analysts caution that volatility remains a constant companion in the Nigerian equity market, and external factors—including global oil prices, currency fluctuations, and policy decisions—could still influence the sector’s trajectory.
For now, though, Nigeria’s oil and gas stocks are riding a wave of renewed optimism, driven by a combination of strong corporate performances, improving production metrics, and a market that appears increasingly willing to bet on the sector’s recovery.
WHAT YOU SHOULD KNOW
Nigeria’s oil and gas sector is experiencing a strong comeback, with the NGX Oil/Gas Index surging over 5% in early October to approach the crucial 2,700-point resistance level.
After months of decline, three major stocks—Aradel, Seplat, and Eterna—are driving the recovery, supported by significantly improved fundamentals: Nigeria’s crude oil production has risen to 1.7-1.83 million barrels per day, while active drilling rigs nearly doubled from 31 to 50 between January and July 2025.
This combination of corporate performance and tangible production gains signals a genuine turnaround for a sector that lost over 9% in early 2025, suggesting renewed investor confidence backed by real operational improvements rather than mere speculation.
