Pakistan's oil and gas production declined by 4% and 7% YoY, during 1QFY26 respectively

AHL Research has highlighted Pakistan’s oil and gas production and provided an updated preview of the results for 1QFY26. Oil and gas production declined by 4% and 7% YoY, respectively.

Oil and gas production in Pakistan witnessed a decline of 4% and 7% YoY, respectively, during 1QFY26. Total oil and gas production of listed companies declined in the same ratio as the industry. The contraction in hydrocarbon output comes amid forced curtailments at major production blocks due to lower gas demand. Major oil fields such as Mardenkhel, Maramzai, Pasakhi, Makori East, and Adhi experienced a drop in production during 1QFY26. In terms of gas production, key fields including Mari, Qadirpur, Sui, Sharf, and Naimat West registered a decline.

Discoveries and Production Activity

During 1QFY26, production potential was enhanced from Rajian-05 (OGDC 100%) with an increase to 3,100 BOPD Oil and 1.0 MMCFD Gas, and production commenced from Soghri North Well (OGDC 100%) and Jhal Magsi (OGDC 56%, POL 24%). Soghri has a potential of 430 BOPD Oil and 14.0 MMCFD Gas and Jhal Magsi of 45 BOPD Oil and 14 MMCFD Gas. In 1QFY26, discoveries were recorded at Chakar-1 (OGDC 95%) and Dhok Sultan (PPL 75%). Chakar-1 has a potential of 275 BOPD Oil and Dhok Sultan of 2,113 BOPD Oil and 4.13 MMCFD of Gas.

Result Previews:

POL: Net profit to settle at PKR 23.83/share in 1QFY26

Pakistan Oilfields Limited is expected to post a profit after tax of PKR 6,765mn (EPS: PKR 23.83), reflecting a massive increase of 163% YoY. The increase in the bottom line comes amid hefty exploration costs booked in 1QFY25 due to the high cost of the dry well Balkassar Deep 1A. We expect POL’s exploration costs to decline by 86% YoY in 1QFY26 for this reason. Operating costs are also expected to decline by 28% YoY. Net Sales are expected to decline by 12% YoY due to i) 6% YoY and 19% YoY decline in oil and gas production, respectively, and iii) a decline in average realized oil prices by 10% YoY. In addition to this, we do not expect the company to announce any cash dividend in 1QFY26.

OGDC: Earnings of PKR 8.84/share expected in 1QFY26

Oil & Gas Development Company Limited (OGDC) is expected to post earnings of PKR 38,006mn (EPS: PKR 8.84) in 1QFY26, depicting a decline of 7% YoY. The decrease in revenues is anticipated due to: i) 1% and 11% YoY reduction in oil and gas production, respectively, ii) 11% and 5% YoY decline in realized oil and gas prices, respectively. Net Sales of the company are expected to decline by 7% YoY due to the reasons mentioned above. Operating expenses are expected to be up by 13% YoY. Exploration expenses are expected to be down by 5% YoY. To recall, TAY NE-1 dry well was recorded in 1QFY25. Other Income is expected to be down by 56% YoY in 1QFY26, mainly due to higher recorded income on TFCs in 1QFY25 and lower expected finance income in 1QFY26 due to lower interest rates. Alongside the results, we expect the company to announce a cash dividend of PKR 3.00/share in 1QFY26.

MARI: Profitability to arrive at PKR 14.89/share in 1QFY26

Mari Energies Limited (MARI) is expected to post earnings of PKR 17,879mn (EPS: PKR 14.89) in 1QFY26, compared to PKR 19,228mn (EPS: PKR 16.01) in 1QFY25, depicting a decline of 7% YoY. This reduction in profitability is mainly attributable to i) the imposition of an incremental royalty on the wellhead revenue from the Mari D&P Lease. Due to incremental royalty, costs are expected to increase by 118% YoY in 1QFY26. Meanwhile, oil production declined by 4% YoY for 1QFY26, and gas production is flat on a YoY basis. Operating costs are expected to be up by 18% and Exploration costs are expected to be down by 13% on YoY basis. Alongside the result, the company is not likely to announce any dividend in the first quarter of FY26.

PPL: Bottom line to clock in at PKR 7.83/share in 1QFY26

In the financial results 1QFY26, Pakistan Petroleum Limited (PPL) is expected to report a net profit of PKR 21,295mn (EPS: PKR 7.83), compared to PKR 23,577mn (EPS: PKR 8.67) in 1QFY25, reflecting a 10% YoY decline. The drop in earnings comes on the back of i) a fall in oil and gas production in by 13% and 12% YoY each, ii) lower realized oil prices, down by 13% YoY, and iii) lower finance income due to a decline in interest rate. Lower production and a decline in realized prices is expected to decrease Net Sales by 13% YoY. Other Income is expected to decline by 57% YoY in 1QFY26 due to decline in interest rates and short term investments. In addition to the results, we expect the company to announce an interim cash dividend of PKR 2.00/share, for 1QFY26.