Pakistan’s exploration and production (E&P) sector posted a strong performance in the first quarter of FY27, with consolidated profit after tax rising 43.1 percent year-on-year to Rs113.7 billion, driven by higher international oil prices, increased hydrocarbon production and improved margins, according to AL Habib Research.

The research house said sector revenues climbed 32 percent to Rs279.1 billion as average Arab Light crude prices surged 26 percent to $90 per barrel, while oil and gas production by major listed companies also posted double-digit growth.

AL Habib Research noted that gross profit increased 35 percent to Rs168.8 billion, lifting gross margins to 60.5 percent, while higher other income further supported earnings growth.

Among key companies, Oil & Gas Development Company (OGDC) reported the highest quarterly profit of Rs58.5 billion, up 53 percent year-on-year, followed by Pakistan Petroleum Limited (PPL) with earnings of Rs25.2 billion, up 25 percent. Mari Energies posted a 39 percent increase in profit to Rs21.8 billion, while Pakistan Oilfields Limited (POL) recorded earnings growth of 51 percent to Rs8.2 billion.

The research house said the sector’s outlook remains positive, supported by production growth, dollar-linked revenues, and healthy profitability, although global oil price volatility, circular debt, and taxation policies remain key risks.