Pakistan Oilfields allocates PKR 12 billion for new exploration and development in FY25

Pakistan Oilfields Limited (POL) has earmarked PKR 12 billion for exploration and development activities, planning to drill one exploratory and one development well in FY25.

The management of the company also indicated that these drilling plans may change based on seismic activity results.

POL is also considering participation in upcoming offshore bidding rounds for several blocks including Chahbali, Nareli, Saruna West, and Multanai, and may partner with another exploration and production (E&P) company.

In a corporate briefing, POL reported success in the Jhandial block, with Jhandial 3 producing about 700 barrels per day (BPD) of oil and 7 million standard cubic feet per day (MMSCFD) of gas. The company is currently in the Extended Well Testing (EWT) phase for reserve revaluation and plans to apply for a lease once this phase is completed.

POL expects production from the Razgir block to begin in April 2025 and is aiming for the best possible price for gas, currently selling Mamikhel South gas at PP-12 plus USD 0.6 to a third party.

The company noted an improved security situation in the TAL block, where a dispute over the windfall levy is being handled by the High Court. As of June 2024, POL has a liability of PKR 31 billion from enhanced gas revenue in the TAL block.

For the fiscal year 2025, POL's capital expenditures for development and exploration are projected to be between PKR 8-12 billion, depending largely on their joint venture partner. The company also mentioned it is not actively targeting tight gas reserves. Recovery from the Sui Northern Gas Pipelines Limited (SNGPL) has improved significantly, reaching nearly 100% in recent months.

The company posted a profit after tax (PAT) of approximately PKR 65.2 billion and PKR 39.2 billion (EPS: PKR 137.9) in FY24, marking a 7% year-on-year increase. However, in the first quarter of FY25, earnings fell to PKR 9.05 per share, a 74% year-on-year decrease, due to the dry well cost of PKR 7.7 billion from Balkassar Deep.