Mari Energies (PSX: MARI) delivered a respectable 9MFY26. Net sales rose by 5 percent year-on-year, while profit after tax increased 7 percent to Rs49.6 billion. On the face of it, that is a solid result. But the story underneath the headline is a little more nuanced. Profit before tax actually declined 4 percent, which suggests that the bottom-line improvement was helped in part by a lower tax charge rather than a broad-based jump in profitability alone.
MARI’s operational performance remained solid. The company continued to move ahead on exploration, appraisal, and development, which is critical in an E&P sector where replacing reserves is a constant challenge. During the period, it drilled nine exploration wells, completed six as producers, made three new discoveries, and completed three appraisal wells in its operated areas. It also advanced production additions and strengthened its long-term growth pipeline through fresh block acquisitions, taking its portfolio to 72 licenses and 15 D&P leases.
The latest quarter itself reflected both the strengths and the pressures in the business. In 3QFY26, net sales rose 6 percent year-on-year, supported by higher production, including a 13 percent rise in oil output and a 4 percent increase in gas production. But upstream growth rarely comes without friction. Exploration expense rose sharply because of one dry well, and finance income fell as lower interest rates reduced returns on cash balances. So, while MARI kept the top line moving in the right direction, it also had to absorb the usual knocks that come with being an active exploration-led company.
The company’s cash position slipped in 3QFY26, while trade receivables climbed. That is a reminder that in Pakistan’s oil and gas sector, profitability on paper and cash generation in reality are not always the same thing. Companies can report healthy earnings and still find a large portion of their cash tied up in the circular debt chain. MARI’s own management has flagged circular debt as a major challenge, with potential implications for exploration, development, and production activity.
This is what makes the country’s E&P sector more complicated. Company performance is shaped not just by crude prices, but also by gas allocation, demand, payment recoveries, regulatory decisions, and the overall health of the energy chain. In MARI’s case, better supply conditions and improved volumes supported sales.
Higher oil prices are generally good for E&P companies. They help improve selling prices, support cash flows, and make exploration and development more attractive. For a company like MARI, which is still expanding and adding new production, this should provide some support.
However, high oil prices can also raise the import bill, fuel inflation, and put more stress on the energy system. So even if E&P companies benefit from better prices, the sector can still face pressure from payment delays, policy bottlenecks, and a weaker macro environment.
9MFY26 show that company is executing well, but sector constraints are still shaping the outcome. Operationally, it continues to expand activity and sustain profitability, which sets it apart in Pakistan’s upstream space. Higher crude prices may support earnings in the near term, but receivables, circular debt, and wider sector inefficiencies continue to limit how fully that operational strength translates into cash generation and long-term value.