A review on OGDC

Oil and Gas Development Company (OGDC) held its Corporate Briefing Session today to discuss financial results and future outlook. The company’s oil production during FY25 was around 30,919 bpd, while gas production stood at 652 mmcfd, according to a report of Topline Pakistan Research.

Approximately 1,790 bpd of oil and 91 mmcfd of gas volumes were lost due to forced curtailment by SNGPL and UPL. Management expects these volumes to recover as progress is made on the RLNG cargo deferment and anticipates a reduction in curtailment by April-May 2026.

Management stated that Bettani’s current production potential is approximately 33 mmcfd of gas and 2,600 bpd of oil from the three completed wells. However, due to security constraints and line pressure issues, the field has not been able to produce at full capacity. They added that the long-term potential of Bettani is estimated at 70- 100 mmcfd, and that only 30-35% of the area has been developed so far.

Management noted a substantial improvement in receivables collection, now exceeding 109% of billing. On the gas sector circular debt front, management indicated that discussions with the government are ongoing, and they expect the dues to be settled within 1-2 years.

According to management, OGDC expects average annual cash flows of approximately US$150-200mn from the Reko Diq mining project, based on its 8% stake. To highlight, the initial cashflow from this project will fund its second phase of expansion.

Regarding Barrick’s corporate split, management stated that these are media speculations and Barrick has assured them that Reko Diq remains a priority asset. Additionally, given the stakeholders involved, any corporate restructuring is not expected to impact the project.

The company’s oil and gas reserves currently stand at 118 MMBBL (49% of total oil production) and 5,790 BCF (34% of total gas production), respectively.

During FY25, the company carried 1,051 sq kms of 3D seismic activity and 750 line kms of 2D seismic activity, representing 74% and 34% of total industry activity, respectively.

Management remains positive on the offshore exploration potential, although they acknowledge that any materialization will likely take time. Management expects to use the current fiscal year for seismic activity, after which they will proceed with drilling the first well.

The company’s estimated production share from the Abu Dhabi offshore block is 2,500 bpd, scheduled to go live by 2028.

We maintain our BUY stance on OGDC. The company is currently trading at an FY26E/FY27F PE of 7.3/6.6x