Topline Pakistan Research has released a report on the recent corporate briefing held by Pakistan Oilfields (POL). During this session, the management discussed the company’s financial results and future outlook. Production from the Razgir field has commenced, with current output ranging between 20 and 25 million cubic feet per day (mmcfd).
Following planned plant enhancements, the production capacity is expected to increase to 30 mmcfd, with completion targeted by the end of 2025.
– Management noted that the third-party allocation of Razgir gas allows the company to achieve a 16% premium over the PP2012 pricing for the field.
– Regarding offshore ventures, management highlighted that the company avoids high-risk investments; therefore, they are not currently pursuing offshore blocks unless the prospects are exceptionally strong.
– In fiscal year 2025 (FY25), the company’s oil and gas production stood at 1.6 million barrels and 19,362 million cubic feet (mmcf), representing decreases of 6% and 14%, respectively.
– According to management, the Tal block experienced a curtailment impact of approximately 90-95 mmcfd of gas and 5-7% of oil, while POL-operated fields remained unaffected.
– Management also highlighted that SNGPL has been settling all recent invoices, and discussions are ongoing to clear the outstanding backlog. POL’s overdue receivables from SNGPL currently stand at PKR 18 billion.
– The 3D seismic acquisition in the Hisal and Taung blocks has been completed, while drilling at the Gurgalot block is ongoing. Additionally, the Jhandial-2 sidetrack is nearing completion, and drilling at Jhandial-4 has commenced, with the well expected to spud in the second quarter of FY26.
– In the latest bidding round, the company secured the Jherruk block (100%) and the Chah Bali exploration license (30%) with OGDC as the operator. Agreements for the Multanai and Saruna West blocks, with 100% and 40% shares respectively, have also been signed with the government.
– Regarding the windfall levy case, management noted that the case is still being pursued in court, and no revenues have been booked as of now.
– To recap, POL reported a net profit of PKR 5.4 billion (EPS: 19.13), representing a year-over-year increase of 2.1 times.
We maintain our “BUY” stance on POL. The company is currently trading at fiscal year 2026 estimated/fiscal year 2027 forecasted price-to-earnings multiples of 6.9x and 5.6x, respectively.
