POL: Strong earnings, mixed production

Pakistan Oilfields Limited posted a 51 percent rise in profitability for the first quarter of FY27, according to Business Recorder. Net profit reached Rs8.19 billion, up from Rs5.43 billion a year earlier, as higher oil prices, stronger gas output, lower exploration spending and greater other income lifted the bottom line. Operating figures were less uniform, with crude output falling and costs climbing across the business.

Net sales rose nearly 26 percent to Rs16.5 billion, largely because of higher prices. Average Arab Light crude was about $90 per barrel, roughly 26 percent above last year, and wellhead gas rates also went up after periodic revisions. On the volume side, average daily crude production fell around 8 percent, while daily gas output climbed close to 28 percent on the back of joint venture fields and newer developments.

Operating costs rose around 30 percent, royalties and extra wellhead levies climbed close to 29 percent, and gross margin eased to 64.1 percent from 64.9 percent even though gross profit grew 24 percent. Exploration expenses fell 83 percent, landing at Rs193 million against Rs1.13 billion a year earlier, and this was a major factor behind the earnings gain. Other income jumped 58 percent, mostly from investments, while finance costs dropped 59 percent and profit before tax rose 49 percent. Business Recorder cautions that lower exploration spending may not help long-term production growth.