Oil & Gas Development Company Ltd. (OGDC) has announced a third formation discovery at the previously reported Baragzai X-01 well in the Nashpa Block, KPK. The newly tested Samana Suk and Shinawar formations flowed at 3.1 kbpd of oil and 8.15 mmcfd of gas through a 32/62″ choke. Based on wireline log evaluation, two cased-hole drill stem tests were earlier conducted in the Kingriali (Triassic) and Datta (Jurassic) formations. These discoveries bring cumulative production from the three formations to 9.5 kbpd of oil and 24.15 mmcfd of gas.

The incremental earnings impact from the Suk & Shinwari formation alone is estimated at PkR1.3/sh for OGDC (WI: 57.2%) and PkR1.0/sh for PPL (WI: 27.8%). On a combined basis, the cumulative impact from these formations rises to PkR3.9/sh for OGDC and PkR3.0/sh for PPL. Given successful Drill Stem Testing (DST) at these three formations at Baragzai-X1, we expect commingled production to be brought online after the installation of the 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.

Courtesy – AKD Research