{"id":10154,"date":"2025-07-22T10:13:31","date_gmt":"2025-07-22T05:13:31","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=10154"},"modified":"2025-07-23T19:11:56","modified_gmt":"2025-07-23T14:11:56","slug":"pakistans-oil-gas-sector-earnings-may-dip-but-dividends-stay-strong","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/pakistans-oil-gas-sector-earnings-may-dip-but-dividends-stay-strong\/","title":{"rendered":"Pakistan&#8217;s oil &amp; gas sector: earnings may dip, but dividends stay strong"},"content":{"rendered":"\n<p>Pakistan\u2019s Exploration and Production (E&amp;P) sector is expected to see a drop in profits for the fourth quarter of FY25. But don\u2019t worry, most companies are still likely to maintain healthy dividend payouts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Earnings set to fall, but why?<\/h2>\n\n\n\n<p>Experts expect a <strong>17% year-on-year (YoY) drop in profits<\/strong> during 4QFY25, mainly due to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lower production<\/strong> of oil and gas<\/li>\n\n\n\n<li><strong>Falling oil and gas prices<\/strong><\/li>\n\n\n\n<li><strong>Royalty charges<\/strong> on Mari Petroleum (MARI)<\/li>\n<\/ul>\n\n\n\n<p>For the full FY25, overall sector earnings are estimated to decline <strong>23% YoY<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Production volumes are down<\/h2>\n\n\n\n<p>During 4QFY25:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Oil production dropped by <strong>15%<\/strong><\/li>\n\n\n\n<li>Gas production dropped by <strong>9%<\/strong><\/li>\n<\/ul>\n\n\n\n<p>This fall was mainly due to gas pipeline pressure and reduced demand from industries, forcing companies to cut output.<\/p>\n\n\n\n<p>Company-wise performance:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/ksestocks.com\/blog\/tag\/ogdc\/\" data-type=\"post_tag\" data-id=\"67\" target=\"_blank\" rel=\"noreferrer noopener\">OGDC<\/a><\/strong>: Oil \u219310%, Gas \u21936%<\/li>\n\n\n\n<li><strong><a href=\"https:\/\/ksestocks.com\/blog\/tag\/ppl\/\" data-type=\"post_tag\" data-id=\"201\" target=\"_blank\" rel=\"noreferrer noopener\">PPL<\/a><\/strong>: Oil \u21938%, Gas \u219313%<\/li>\n\n\n\n<li><strong><a href=\"https:\/\/ksestocks.com\/blog\/tag\/mari\/\" data-type=\"post_tag\" data-id=\"182\" target=\"_blank\" rel=\"noreferrer noopener\">MARI<\/a><\/strong>: Oil \u219116%, Gas \u21932%<\/li>\n\n\n\n<li><strong><a href=\"https:\/\/ksestocks.com\/blog\/tag\/pol\/\" data-type=\"post_tag\" data-id=\"202\" target=\"_blank\" rel=\"noreferrer noopener\">POL<\/a><\/strong>: Oil \u21938%, Gas \u219318%<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Crude oil prices fell too<\/h2>\n\n\n\n<p>The average price for Arab Light crude was <strong>$69 per barrel<\/strong>, down 22% YoY. This was due to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Higher global supply (especially from the US and Brazil)<\/li>\n\n\n\n<li>Weak global demand due to high interest rates<\/li>\n\n\n\n<li>Ongoing geopolitical tensions that didn\u2019t escalate<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Dividends look promising<\/h2>\n\n\n\n<p>Even though earnings are lower, <strong>cash flows have improved<\/strong>, thanks to better gas price collections and reduced receivables. This means most companies, like <strong>OGDC<\/strong>, <strong>PPL<\/strong>, and <strong>MARI<\/strong>, are likely to maintain their dividend payouts. Only <strong>POL<\/strong> may cut slightly, given its higher dependency on oil.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">More exploration, better future<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>53 wells were drilled in FY25<\/li>\n\n\n\n<li>21 new discoveries were made (vs 15 last year)<\/li>\n\n\n\n<li>New policies now allow companies to <strong>sell gas directly to customers<\/strong>, which could further boost the sector<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Stock ratings &amp; targets<\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><thead><tr><th>Company<\/th><th>Dec\u201925 Target Price<\/th><th>P\/E (x)<\/th><th>Dividend Yield (FY26E)<\/th><\/tr><\/thead><tbody><tr><td>OGDC<\/td><td>PKR 371<\/td><td>4.8<\/td><td>9.4%<\/td><\/tr><tr><td>PPL<\/td><td>PKR 285<\/td><td>4.2<\/td><td>8.5%<\/td><\/tr><tr><td>MARI<\/td><td>PKR 670<\/td><td>8.7<\/td><td>6.1%<\/td><\/tr><tr><td>POL<\/td><td>PKR 800<\/td><td>5.8<\/td><td>14.9%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Even with lower profits, the E&amp;P sector still offers value through strong dividends, improving liquidity, and long-term growth from new discoveries and policy reforms.<\/p>\n\n\n\n<p><strong>Source: AKD Securities <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Pakistan\u2019s Exploration and Production (E&#038;P) sector is expected to see a drop in profits for the fourth quarter of FY25. But don\u2019t worry, most companies are still likely to maintain healthy dividend payouts.<\/p>\n","protected":false},"author":9252,"featured_media":9303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,153,48],"tags":[182,67,202,201],"class_list":["post-10154","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-economy","category-news","tag-mari","tag-ogdc","tag-pol","tag-ppl"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks5-1140x445.jpg",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks5-463x348.jpg",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks5-300x188.jpg",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks5.jpg",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/10154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=10154"}],"version-history":[{"count":1,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/10154\/revisions"}],"predecessor-version":[{"id":10155,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/10154\/revisions\/10155"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/9303"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=10154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=10154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=10154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}