If you have been holding oil and gas stocks this year, you would have felt some pain.
The sector has been the worst performer so far in 2025, with the index down over 10% in just six months.
But sometimes, when prices fall too far, it opens the door for smart buying if the fundamentals are right.
Market value has taken a hit
That poor performance is mostly due to falling share prices. The total value of all eight listed oil and gas companies dropped from N7.4 trillion at the end of last year to N6.65 trillion by June 2025; a loss of almost N750 billion in value.
However, by Monday, July 14, the value had ticked up slightly to N6.68 trillion. Not a full recovery, but it shows the sector may be trying to find its footing.
Only three oil and gas stocks are in positive territory this year — Eterna is up a massive 71%, JapaulGold has gained 47%, and Total Energies is just about flat with a 1% gain.
But the rest of the pack is down. Seplat is down over 4%, Aradel is off by 11%, Oando has lost over 21%, MRS has crashed by 31%, and Conoil has taken the hardest hit, down nearly 40% so far this year.
The stocks may be down, but they appear not to be expensive
However, even though these stocks have underperformed, they actually look cheap when compared to other sectors.
In fact, when you stack them against consumer goods, the top-performing index so far this year oil and gas index looks like they’re selling at a discount.
Looking at the numbers, oil and gas stocks are going for much less than consumer goods even though many of them are making solid profits.
On average, investors are paying just N11 for every N1 of profit in oil and gas, compared to a whopping N33 in the consumer goods space.
That’s a huge gap. For value-minded investors, this could be the kind of mismatch that creates opportunity.
Oil and gas stocks are also cheaper when you compare their prices to the value of what they own — things like property, plants, and equipment.
The sector trades at just over 3x their book value, while consumer goods stocks trade at more than double that, over 7x.
That is big, and since oil and gas companies usually own a lot more physical assets, this low valuation appears reasonable.
The high share price angle:
Even though oil and gas stocks look cheap on paper — strong profits, low valuations — their high share prices may be keeping retail and small investors away.
Seplat is over N5,000 per share, Aradel is more than N500, and even Total is above N700. For a retail investor with N10,000 to spend, that is barely enough to buy a reasonable number of shares.
Meanwhile, banking and consumer goods stocks are often priced between N5 and N200. They just look more affordable, even if they’re not better value.
So, while oil and gas stocks might be solid fundamentally, their high price tags may be keeping them out of reach for the average retail player.
Meanwhile, all eight players are still trading below their 52-week highs — some by as much as 30% to 40%. For smart investors who like to buy low and wait for the rebound, this could be a good time to start building positions, while prices remain depressed.
This doesn’t mean diving blindly. But it does mean careful positioning — especially in names like Seplat, Oando, Aradel, or MRS, where the valuation is attractive, and the fundamentals are holding up.
As always, this is not a buy call — just a reminder that sometimes, opportunity abounds amid declining share prices. As well, it is important to note that stocks may look cheap now, but prices can stay low longer than expected, especially in a market where sentiment is weak.
It is important to do your own due diligence and understand the risks involved. If you’re not sure, consider speaking with a licensed financial advisor before making any big moves.
