Exploration and production of oil and gas companies globally prepare their financial statements using either full cost or successful efforts historical accounting methods. Although, there have been numerous attempts by different standard setting organs to narrow the choice of accounting methods so that the financial statements of petroleum companies are more comparable, the question as to which historical accounting method provides investors with more informative numbers, and this should be mandated for all oil and gas companies is still unresolved. This study aimed to analyze empirically, the relationship between petroleum accounting methods and financial performance of quoted oil and natural gas companies in Nigeria. Time series data on different types of petroleum accounting methods an return on equity from 2009-2019 were collected from the central bank of Nigeria statistical bulletin, National Bureau of Statistics, Annual Central Bank of Nigerian reports and Federal Inland Revenue Service. Ordinary least regression analysis, Auto-Regressive Distribution Lag (ARDL) cointegration and error correction model was used in analyzing the data. The empirical results indicate that petroleum accounting methods significantly relate to financial performance; explaining about 79.3% of the total variation in return on equity. The empirical study therefore concludes that petroleum accounting methods has the potency to make significant contribution to financial performance and recommends that companies that need more asset value should use full cost method while companies that already have large assets should use successful effort method. Companies with low standard deviation should adopt full cost effort method in order to beef up their capital base.