Geofluids Moves to Create Value for Stakeholders

Yusuf Ebiti

Geofluids Plc is set for high growth prospects as it successfully implements a wholistic growth strategy that will redefine its business operation aimed at driving up value for its current and prospective investors. The plan has three lane paths of a strengthened board, business line expansion, and rejigging of its operational structure, all aimed achieving a better value for investors and all stakeholders.

Besides, company looks forward to  the listing of its  shares on multiple exchanges both local and offshore, the current move by the company to reenvision and redefine its goals with needle-point implementation of its growth strategies is most timely.

According to the Chairman and Chief Executive Officer of Geofluids Plc, Jacob Esan,  this bold and ambitious turnaround strategy  will improve value and place the company at the top of its industry of operation.

Esan, a corporate finance expert, who initiated the strategic plans and has been overseeing its successful implementation to date, stated that the decision of the company to expand its business lines by entering into bitumen and hydrocarbon exploration and extraction is aimed at positioning it  for greater value delivery.

He said: “Geofluids holds significant interest in Bitumen blocs, each capable of producing a significant commercial quantity of tar sand (bitumen) and other hydrocarbons. These blocs are located in Ondo State, and has the capacity to trigger strong corporate revival for the company’s fortunes.”

He added that the process which started in 2012 has reached a stage where the company has now been completely stabilised with new focus and new energy for growth and value creation for its shareholders and all other stakeholders.

He noted that the shares of the company are currently listed and actively traded on NASD board, explaining that the plan is to list the company on the NGX and on other offshore international stock exchanges.

According to a report of a market analyst, the stock which trades around N5.50 on the OTC market has the potential for upside in hidden-market value opportunities if Geofluids succeeds in its new business direction and chooses to become a fully listed company on an alternative non-OTC market. The report further noted that even if the company chooses to remain on an OTC trading platform, there possible huge opportunities for investors to benefit from additional market value.

A review of the stock’s price performance in the course of the year shows that on the overall, excluding the outlier, Geo-Fluids’ price ranged from N1.62 to N5.00, characterised by high volatility, episodic liquidity, and event-driven swings typical of Nigerian small-cap energy stocks.

Geofluids is one of the players in the oil and gas sector. It was originally set up to supply drilling mud, barite, bentonite, and calcium carbonate. It also handled jobs on engineering, marketing, and project management services in the oil and gas industry, where it quickly built a strong reputation, attracting elite clients.

It will be recalled that Geofluids had a downturn in its operations leading to an erosion of value. The company found itself trapped in a commercial logjam. The shareholders abandoned a potential corporate revival and agreed to transfer the company to Esan on mutually agreed terms. And over the past several years, the business underwent several iterations until it emerged from its dire situation stable but with thin operating cash flow.

According to Esan, it took this long to fully reestablish Geofluids for very many good reasons.

“First, there were a lot of issues we needed to resolve, and that was successfully. Secondly, we had to clearly redefine the strategic focus of the company; that was necessary to give us a direction. Thirdly, we needed to review operational systems and put it in place such structure that will complement the new driving force to achieve the overall goal that has been established. And finally, we needed to put in place a financing structure that will give the company the necessary live blood that will keep it engines running,” he said.

The Chairman/CEO  noted, “it was a tough and rigorous process, but we are happy we took those right steps and have successfully gone through all that to lay a new foundation for the company, and we now have a very stable company that is ready to advance its fortunes for the benefit of all stakeholders.”

He further explained that Geofluids is now run by a new agile and versatile board with deep and broad experience in various sectors. “Our board shows regional spread, diverse expertise, and relevant experience.  The new board brings needed experience across energy, finance, law, governance, and strategic investments. It includes the following members:

It is expected that this new board will provide Geofluids with the socio-political and economic network, expertise, and governance support needed to drive the company’s subsequent evolution into one of Nigeria’s principal hydrocarbon businesses”.

It is of interest to note that these efforts have had very positive impact on the financials of the company, though marginally, but a clear indicator that the firm is on the path of recovery and growth.

The financials of Geofluids over the past 13 years shows a shift to a stable cashflow profile from a prior stream of operating losses. The positive change is underlined by some investment and financing activities that had significant impact on liquidity. Operating cash flows were volatile but gradually improved, moving from negative figures in the early years to steady positive inflows from 2018 onwards, and peaking at N35.51 million in 2022 and remaining robust at N34.34 million in 2024. This indicates better earnings quality and improved working capital management, as accounted for by the new operational structure of the organisation.

Though there have been spot cash inflows of N3.81 billion inflow in 2013 and N1.13 billion in 2024, the end of period cash levels remained modest, fluctuating between N1.34 million and N7.96 million, ending FY 2024 at N7.27 million. This underscores tight liquidity and a tendency to reinvest rather than hoard cash.

In all Geofluids’ cash flow pattern indicates a modest but emerging business, reliant on strategic financing cycles and asset monetisation to support growth, now entering a phase of stronger operational cash generation, consistent with its strategic repositioning.