MARI 1HFY24 – of higher gas prices and volumes

Mari Petroleum Company Limited (PSX: MARI) witnessed an uptick in oil and gas production during the recently concluded 1HFY24. There was an overall 13 percent increase in production during the period, which along with the rise in gas prices boosted the company’s profitability.

Revenues of the company during 1HFY24 were up by 54 percent year-on-year led by a 29 percent year-on-year rise in the wellhead price of Mari Gas Field and growth of around 34 and 17 percent year-on-year in production volumes of oil and gas, respectively. Topline growth was also supported by PKR depreciation during the period. The recent quarter – 2QFY24 – also had a topline growth of 56 percent year-on-year led by a rise of around 20 and 25 percent year-on-year rise in oil and gas production, currency depreciation as well as gas price hike. Recall that in 1QFY24, the company incurred the highest-ever quarterly hydrocarbon sales of around 10 million barrels of oil equivalent, while the same was also around 9.8 million barrels in 2QFY24, aggregating to 19.8 million barrels for 1HFY24.

Besides the topline growth, MARI’s bottom line also benefitted from higher finance income that came in due to higher income on cash and investments. The earnings were supported by other income in 1HFY24 and 2QFY24 versus other expenses in 1HFY23, and 2QFY23.On the expense side too, the company witnessed 43 and 66 percent decline in exploration and prospecting expenditure during 1HFY24 and 2QFY24, respectively due to the absence of dry wells. The company’s earnings for 1HFY24 and 2QFY24 witnessed a growth of 57 and 65 percent year-on-year despite a higher share of loss from associates.

With a robust 1HFY24, the prospects for earnings during the rest of the year (FY24) are very optimistic. Besides the improved production flows due to Sachal Gas Processing Complex coming to full capacity and additional gas sales to SNGPL as highlighted in the Company’s announcement at the bourses, new production flows and better liquidity due to the higher gas price of Mari Gas Field will support bottom-line growth in the coming quarters.