This study examined effect of corporate financing options and the financial performance of oil and gas firms in Nigeria for a period of 10 years (2015-2024). The specific objectives were to: examine the effect of total equity and short term debt on asset of oil and gas firms in Nigeria. The study employed annual report of the selected oil and gas firms (Conoil Plc, Total Nigeria limited, Oando Plc, MRS oil Nigeria Plc and Caverton Offshore Support Group Plc). Ex-post facto research design was adopted. The study employed multiple regressions of Panel Least Squares method. The result revealed that total equity financing had negative (coefficient -0.282573) and significant (P-value 0.1452) effect on return on assets of oil and gas firms, short term debt financing had a positive (coefficient 0.498277) and significant (P-value 0.0013) effect on return on assets of oil and gas firms in Nigeria. The following recommendations were made: oil and gas firms in Nigeria should reconsider their heavy reliance on equity financing, as the study showed a negative and non-significant effect on profitability. Instead, firms might benefit from focusing more on debt financing options, which have shown positive effects on profit, to drive performance. Additionally, companies should work on optimizing their capital structure by balancing equity and debts to enhance financial efficiency and improve profit outcomes and oil and gas firms should prioritize short term debts sustainability in their financing decisions. This includes considering the environmental, social, and governance (ESG) factors associated with different financing sources, as well as the potential impact on the firm's performance and social license to operate.
Ogbodo et al. (2026) studied this question.