Pakistan Petroleum Ltd (PPL) held its analyst briefing earlier today to brief investors about FY25 results and future outlook: PPL reported standalone NPAT of PkR92bn (EPS: 33.8) in FY25, down 19%YoY, owing to production curtailments and the prior year’s one-off tax reversal. The company also announced a cash dividend of PKR 7.50/share during the year, according to a report by AKD Research.
· PPL operates nine fields and holds partner interest in 12 more. Furthermore, the company also manages 25 self-operated exploration blocks while participating in 21 partner-operated blocks.
· Indigenous gas supply declined to 2.9bcfd in FY25 (vs. 3.1bcfd in FY24) due to RLNG line-pack pressure on SNGPL’s network, with PPL facing curtailment of 50mmcfd.
· Company’s FY25 production clocked in at 632mmcfd. The revenue mix for gas by major fields was as follows: Sui 42%, Partner Operated 24%, Kandhkot 17%, Gambat South 15%, and Adhi 2%. Furthermore, the Sui D&PL lease was extended for 10 years up to May’25, with further renewal in progress. Management anticipates a positive impact if RLNG cargo deferment is effective, providing a positive production boost to the company.
· The company announced eight discoveries in FY25 (2 operated, six partner-operated), resulting in 129% reserve replacement. In comparison, 11 wells were drilled during the year (5 operated, six partner-operated).
· PCA with ADNOC was signed for three pre-existing discoveries; while the Reko Diq feasibility was completed during the year, with financial close underway.
· Trade debt collection stood at 91% in FY25, supported by recent gas price hikes. Furthermore, 1QFY26 collection stood at 86%.
· With regards to gas curtaManagementnagement continues to remain engaged with authorities in this regard. Further management is also pursuing gas sales to third parties.
· Company remains in pursuit of reallocation of Kandhkot gas from GENCO-II (due to low offtakes) towards a more suitable buyer.
· Production for FY26 is forecasted at 600-650mmcfd, contingent on gas curtailment levels. A total of 15 wells are planned for drilling, alongside 700 square meters. km of 2D and 600sq. km of 3D seismic activity. Furthermore, the company plans to participate in new exploration rounds for both onshore and offshore blocks, as well as in international rounds.
· Management remains optimistic on Dhok Sultan oil potential, and is planning the area’s further development. Notably, Dhok Sultan-03 is expected to produce up to 1.4 kbpd (currently producing 400 bpd). Notablye, the average production forthe the Dhok Sultan oil field stood at1,100kbarrels per day ( bp)d during FY25.
· BLZ project is the country’s largest Barite-Lead-Zinc initiative, expecting production initiation to align with the commissioning of the Reko Diq Mining Project.
· We have a ‘BUY’ call on PPL with a Dec’25 TP of PkR281/sh, alongside a FY26E DY of 5.5%.
https://research.akdsl.com/638984639138321111.pdf
AKD Research
