Effects of Operating Costs on Financial Performance of Oil and Gas Companies in Nigeria

Abstract

This research examined the effects of operating costs on the financial performance of Oil and Gas companies in Nigeria. The study sampled five (5) firms out of all the listed Oil and Gas companies on the Nigerian Exchange Group plc. Secondary data were sourced to obtain panel data. The data collated were analyzed using descriptive and inferential statistical techniques. The study found that the coefficient of administrative cost is positive and statistically significant. The beta value of distribution cost is positive and statistically significant, the beta value of firm size is positive and statistically significant, but the beta value of selling cost is negative and statistically significant. This research therefore concluded that administrative and distribution costs of oil and gas companies and degree of their size contributed positively to the improvement of their financial performance, but selling cost contributed negatively meaning that money spend on was improperly utilized. The study recommended that selling costs of oil and gas companies in Nigeria need absolute control by those concern and should be minimized to enhance their financial concert. Keywords: Financial performance, operating costs, Nigerian Oil and Gas companiesThis research examined the effects of operating costs on the financial performance of Oil and Gas companies in Nigeria. The study sampled five (5) firms out of all the listed Oil and Gas companies on the Nigerian Exchange Group plc. Secondary data were sourced to obtain panel data. The data collated were analyzed using descriptive and inferential statistical techniques. The study found that the coefficient of administrative cost is positive and statistically significant. The beta value of distribution cost is positive and statistically significant, the beta value of firm size is positive and statistically significant, but the beta value of selling cost is negative and statistically significant. This research therefore concluded that administrative and distribution costs of oil and gas companies and degree of their size contributed positively to the improvement of their financial performance, but selling cost contributed negatively meaning that money spend on was improperly utilized. The study recommended that selling costs of oil and gas companies in Nigeria need absolute control by those concern and should be minimized to enhance their financial concert. Keywords: Financial performance, operating costs, Nigerian Oil and Gas companies