Business & Finance Print edition: 2026-09-16

4QFY26: E&P sector’s earnings surge 2.5 times YoY

Published September 16, 2026 Updated September 16, 2026 05:59am

3 min

By Muhammad Saqib

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KARACHI: Earnings of Pakistan’s listed exploration and production (E&P) sector surged 2.5 times year-on-year (YoY) and 2.3 times quarter-on-quarter (QoQ) to Rs214 billion in 4QFY26, primarily driven by reversals of super tax provisions following a Federal Constitutional Court (FCC) decision, according to Topline Research.

The strong quarterly performance took the sector’s full-year FY26 earnings to Rs459.8 billion, up 31 percent YoY.

The research report said the sector booked a tax reversal of Rs54.9 billion during 4QFY26, compared with an effective tax rate (ETR) of 26 percent in 4QFY25 and 28 percent in 3QFY26. The reversal followed an FCC decision concerning super tax levies and their linkage with the allowable limit under Petroleum Concession Agreements (PCAs).

The sector’s net sales increased 54 percent YoY to Rs307.4 billion in 4QFY26. Topline Research attributed the increase primarily to a 52 percent rise in oil prices during the quarter, with Arab Light crude averaging USD 103.96 per barrel compared with USD 68.61 per barrel in 4QFY25.

Exploration costs, meanwhile, increased substantially during the quarter, rising 77 percent YoY and 82 percent QoQ to Rs26.2 billion. For FY26, exploration costs stood at Rs61.8 billion, up 2 percent YoY.

The research noted that five dry wells were reported across listed E&P companies during FY26, including Jakhro North-1, Khatian-1, Saidpur-1 and Chak203-01 by Oil and Gas Development Company Limited (OGDC), and Pario-01 by Mari Energies Limited (MARI).

The sector’s cumulative dividend disbursement increased 26 percent YoY to Rs166.5 billion in FY26. OGDC, Pakistan Petroleum Limited (PPL) and Pakistan Oilfields Limited (POL) reported their highest-ever dividend disbursements, contributing 44 percent, 20 percent and 17 percent, respectively, while MARI accounted for 19 percent.

OGDC recorded a three-fold increase in earnings on both a YoY and QoQ basis in 4QFY26, mainly due to higher sales and the impact of the super tax reversal. Its exploration costs increased 2.6 times YoY and 81 percent QoQ during the quarter. The company announced a cash dividend of Rs6 per share for 4QFY26, taking its total FY26 payout to Rs17 per share.

PPL’s earnings increased 93 percent YoY and 80 percent QoQ despite higher exploration costs, with the growth attributed to higher sales and the impact of the super tax reversal. The company announced a cash dividend of Rs6 per share, taking its FY26 payout to a record Rs12 per share.

MARI posted earnings growth of 99 percent YoY and 77 percent QoQ in 4QFY26. According to the research, the increase was primarily driven by an Rs18.3 billion tax reversal during the quarter, compared with a full-year tax rate of 26 percent in FY25. MARI announced a cash dividend of Rs18.7 per share, taking its FY26 payout to Rs27 per share.

POL’s earnings rose 62 percent YoY and 59 percent QoQ in 4QFY26, while sales increased 64 percent YoY and 32 percent QoQ. The research attributed the earnings increase partly to a lower ETR of 19 percent in 4QFY26 compared with 23 percent in 4QFY25. The company’s full-year tax rate consequently declined to 23 percent from 31 percent in FY25.

POL announced a cash dividend of Rs72.5 per share for 4QFY26, taking its total FY26 payout to Rs100 per share.

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