• We expect E&P sector earnings to decline by 14%YoY during 3QFY25, on the back of i) lower hydrocarbon production due to supply curtailments, ii) lower oil and wellhead gas prices, and iii) one dry well during the quarter.
• Arab Light prices contracted by 7% year-over-year (Yoy), averaging US$78.3/bbl during the quarter, driven by weakening global demand.
• Improving gas collection ratios, in light of sharp tariff hikes over the past 24 months, with average consumer tariffs up 3 times since June ’22, are anticipated to drive a resurgence in E&P capex activity moving forward.
• We have a ‘BUY’ call on OGDC, PPL, and POL with a Dec ’25 TP of PKR 372/281/800 per share, respectively.

Courtesy – AKD  Research