Oil and Gas Industries Financing and Financial Performance in Nigeria : The Case of Intelligent Capital Led Model

This study ascertained the linkage between intelligent capital components and financial performance of oil and gas industries quoted on the Nigerian Stock Exchange over a period of eight (8) years from 2008 to 2015. This study was necessitated by the mixed results on the nexus between intelligent capital and firm's performance. Specifically, the effect of human capital efficiency, social capital efficiency and capital employed efficiency on return on assets, return on equity, net profit margin and gross revenue growth were evaluated. Using annual data from statement of value added section of their annual reports and applying panel estimation technique, we identify a positive insignificant relationship between capital employed efficiency and return on assets, return on equity, net profit margin and gross revenue growth. Social capital employed positively and insignificantly relates with return on assets but negatively associates with return on equity, net profit margin and gross revenue growth. Human capital efficiency positively and insignificantly relates with net profit margin and gross revenue growth but negatively associates with return on assets and return on equity. From the granger causality perspective, we observe the significant effect of human capital efficiency on net profit margin and gross revenue growth; social capital efficiency on return on equity; capital employed efficiency on return on assets. Subsequently, we recommend that oil and gas industries should improve their human capacity development (workforce be up to date with ever changing technology) to enhance productivity. Investment in physical assets via modernized exploration, refining, product storage/delivery facilities will enhance availability and efficiency in delivering of oil and gas services which in turn, lead to increase turnover/rise in revenue