Pakistan Petroleum Limited (PPL) has declared its highest annual dividend in a decade and is targeting higher hydrocarbon production in FY27 through new field developments and gas processing projects, according to a research briefing AHL Research released after the company’s analyst briefing.
The brokerage house reported that PPL’s net sales rose 9 per cent year-on-year to Rs264 billion in FY26, supported by increased production volumes and higher average crude oil prices. Profit after tax grew to Rs99 billion from Rs92 billion a year earlier, aided by stronger revenues and the reversal of a super-tax provision. The company announced a cash dividend of Rs12 per share, representing a payout ratio of 33pc.
According to AHL Research, PPL’s net production increased to 649 million cubic feet of oil equivalent per day (mmcfde) in FY26 from 632 mmcfde in the previous year. Management has guided FY27 production at 680 mmcfde, comprising around 480 mmcfd of gas, 12,000 barrels of oil per day and 290 tonnes of LPG per day.
The company expects to add around 33 mmcfde of incremental production during FY27 from discoveries and development activities at Baragzai, Latif-25, Makori East, Tolanj West and Rehman-9 in the Kirthar Block.
AHL noted that the Zafir gas processing plant is scheduled to commence operations in December 2026 with an initial contribution of about 20 mmcfd of sales gas, rising to 40 mmcfd in a second phase. Meanwhile, the Pateji gas processing facility in Sujawal is expected to start operations by June 2027, adding around 16 mmcfd of sales gas and generating an estimated Rs8 billion in annual revenue.
The research house said PPL plans capital expenditure of approximately Rs40 billion in FY27, including exploration, seismic surveys and field development activities aimed at offsetting natural depletion, which management estimates at 8-9pc annually across mature fields.
On receivables, AHL highlighted that collections averaged 91pc of billings during FY26, while SSGCL and SNGPL remained the largest contributors to outstanding dues, accounting for Rs328 billion and Rs267 billion, respectively. Discussions on circular debt settlement with the government remain ongoing.
The brokerage also noted that PPL made 11 hydrocarbon discoveries during FY26 and achieved a reserve replacement ratio of 102pc. The company expanded its exploration footprint by acquiring stakes in eight new offshore blocks, including two operated by Turkish Petroleum.
PPL currently operates a diversified portfolio comprising 21 producing fields and 57 exploration blocks and contributes around 20pc of Pakistan’s natural gas production and 18pc of domestic oil output, according to the analyst briefing.