Oil & Gas Development Company Ltd (OGDC) has announced a second formation discovery at the previously reported Baragzai X-01 well in the Nashpa Block, KPK. The newly tested Datta (Jurassic) formation has flowed at 4.1k bpd of oil and 10.5 mmcfd of gas over an interval exceeding 187m, in addition to the Kingriali (Triassic) formation, discovered on Dec 10th, which was tested over a ~90m interval. Cumulatively, the two formations have a combined potential of 6.4k bpd of oil and 16.0mmcfd of gas, according to a report by AKD Research.

The incremental earnings impact from the Datta formation alone is estimated at PkR1.61/sh for OGDC (WI: 57.2%) and PkR1.23/sh for PPL (WI: 27.8%). On a combined basis, the cumulative impact from both Kingriali and Datta formations rises to PkR2.50/sh for OGDC and PkR1.91/sh for PPL. Given successful Drill Stem Testing (DST) in both Datta and Kingriali formations at Baragzai-X1, we expect commingled production to be brought online post installation of requisite wellhead and surface facilities.

We have a ‘BUY’ stance on OGDC and PPL with Dec’26 TP of PkR522/sh and PkR412/sh, due to i) growing production profile, alongside strong reserve replacement, ii) higher exploration prospects on back of improving liquidity situation, iii) 8.33% stake in highly prospective Reko Diq Mining Project, iv) offshore working interests in Abu Dhabi Offshore Block-5, along with consortium partners and v) improvement in cash payouts.

https://research.akdsl.com/639028694655348755.pdf

AKD Research