3 Worst Performing Oil & Gas Stocks Of 2026
Introduction
Pakistan’s energy sector is entering 2026 with improving liquidity conditions, stronger exploration activity, and ongoing reforms aimed at reducing circular debt pressure across the system. Companies with diversified energy exposure, strong operational execution, lower leverage, and strategic expansion into mining, offshore exploration, and infrastructure are increasingly attracting investor attention. Based on the latest corporate briefings, quarterly results, and FY26 projections, three companies stand out within the sector: Pakistan Petroleum Limited, Mari Energies Limited, and Pakistan State Oil Company Limited .
3. Pakistan Petroleum Limited (PPL)
Pakistan Petroleum Limited remains one of the sector’s key exploration and mineral diversification stories heading into 2026.
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FY2026 Financial Outlook
| Key Financial Metric | FY2026 Estimate |
|---|---|
| Net Sales | PKR 238.3 Billion |
| Profit After Tax | PKR 82.67 Billion |
| Earnings Per Share (EPS) | PKR 27.3 |
| Dividend Per Share (DPS) | PKR 7.5 |
| Payout Ratio | 28% |
Management expectations for FY26 remain supported by stronger exploration activity and improving liquidity trends.
Liquidity Position Strengthened During 2QFY26
The company achieved a collection rate of 93% during 2QFY26, supporting improved cash flow visibility. PPL also maintained a strong cash balance of PKR 89 billion during early 2026. Despite these improvements, circular debt exposure within the gas sector remained substantial at PKR 599 billion. Management continues to view circular debt resolution as one of the largest liquidity catalysts for the company.
Major Discovery Added Earnings Potential
A major operational development occurred during January 2026 with the Baragzai X-01 discovery in the Nashpa Block, where PPL holds a 30% stake. The well produced approximately 13,470 barrels of oil per day and 36.46 million standard cubic feet per day of gas. Management expects the discovery to contribute nearly PKR 5.04 per share toward earnings.
Exploration Activity Increased Sharply
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The company plans to spud more than 8 exploratory wells during FY26, representing a fourfold increase compared to the previous year. Management expects production recovery as LNG cargo diversions reduce domestic pipeline congestion and improve offtake from fields such as Sui and Kandhkot.
Mining And International Expansion Continued
PPL maintains an effective 8.33% stake in the Reko Diq copper-gold project, which remains one of the company’s most significant long-term strategic assets. The company also maintains investment exposure in the Baryte-Lead-Zinc project in Balochistan. Internationally, PPL continues to hold a 25% stake in Abu Dhabi’s Offshore Block 5, where production activities are expected to support future earnings growth starting in 2028. Management also reduced its working interest in the Eastern Offshore Indus C Block to 35% in order to lower technical and capital risks while preserving exploration upside.
⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →
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