Islamabad: Oil and Gas Development Company (OGDC) announced its third-quarter financial results for fiscal year 2025, showing a slight decrease in net profit after tax, attributed to reduced hydrocarbon production and lower average oil prices. The company reported a net profit after tax of PKR 47.1 billion, marking a 1% year-on-year decline, aligning with market expectations.

Net sales for the quarter amounted to PKR 104.5 billion, reflecting a 7% decrease compared to the previous year. The decline in sales was primarily due to a reduction in hydrocarbon production and a drop in average oil prices, with Arab Light Crude averaging $78.3 per barrel, down 7% from the previous year.

Hydrocarbon production saw a noticeable decline, with oil, gas, and LPG outputs falling by 6%, 6%, and 7% year-on-year, respectively. Specifically, OGDC's output reached 32,000 barrels per day for oil, 684 million cubic feet per day for gas, and 683 tons per day for LPG.

Operating expenses increased significantly during the quarter, totaling PKR 32.4 billion—an 18% rise from the previous year. Exploration expenses also surged, reaching PKR 6.8 billion, a 93% increase due to the plugging of a dry well in the Mari East Block.

Despite these challenges, finance income saw a modest rise of 5%, reaching PKR 18.1 billion. This increase was attributed to the company's substantial cash and investment balances, which grew by 45% year-on-year to PKR 203 billion. The reversal of provisioning for accrued interest on Term Finance Certificates also contributed to the rise in finance income.

The effective tax rate for the quarter was 30%, a decrease from 41% in the third quarter of fiscal year 2024 and 43% in the second quarter of fiscal year 2025.

In light of these results, AKD Securities Limited reiterated a 'BUY' stance on OGDC, setting a target price of PKR 372 per share for December 2025. The outlook remains positive due to a strong production profile, improved liquidity, and strategic stakes in projects such as the Reko Diq Mining Project and offshore interests in Abu Dhabi.