Oil and Gas Development Company Ltd (OGDC) has announced the successful completion and commissioning of the Jhal Magsi Development Project, located in Balochistan, according to the company’s notification to PSX and a report of a research house.  Jhal Magsi comprises two wells and is a Joint Venture with OGDC as the operator with 56% working interest, Pakistan Oil Field (POL) and Government Holdings Private Limited (GHPL) with 24% and 20% working interest, respectively.

·         The project is currently delivering 14mmcfd of gas and 45bpd of condensate. The gas has been injected into the Sui Southern Gas Company Limited (SSGC) network, following the construction of a 98km pipeline.

·         To highlight, Jhal Magsi was discovered in 2003, three wells were drilled out of which two are producers. Development activities commenced in February ’24, following the Government of Pakistan’s approval of incentives for the Project, including conversion from the 1997 Petroleum Policy to the Marginal Field Gas Pricing Policy.

·         We project the aforementioned discovery to contribute an annualized EPS impact of ~PkR0.37/sh and PkR2.43/sh for OGDC and POL, respectively.

·         We reiterate our ‘BUY’ stance on OGDC with a Dec’25 target price of PkR371/sh, alongside FY26 DY of 7.6%. Our outlook is strengthened due to the following aspects: i) strong production profile, ii) higher future exploration prospects on back of improving liquidity situation, iii) 8.33% stake in highly prospective Reko Diq Mining Project, iv) offshore working interest in Abu Dhabi Offshore Block-5, along with consortium partners, v) improvement in cash payouts, and vi) potential JV with U.S. firms to explore one of the world’s most significant unexploited shale reserves.

·         Moreover, we reiterate our ‘BUY’ stance for POL, with Dec’25 TP of PkR800/sh and DY of 12.4% during FY26.

Courtesy – AKD Research