Karachi: The Oil and Gas Development Company (OGDC) announced a substantial increase in its earnings for the fourth quarter of fiscal year 2026, with earnings per share rising threefold year-over-year to Rs29.55. This surge contributed to an overall 43% increase in the company's annual earnings, reaching Rs56.35 per share. The significant rise in earnings was largely attributed to a reversal of super tax.

According to JS Global, OGDC's net sales for the quarter amounted to Rs149.1 billion, marking a 65% increase from the previous year and a 39% rise from the previous quarter. This growth was driven by the start of production at the Baragzai field and an increase in crude oil prices. The company's annual revenues for fiscal year 2026 rose by 12% year-over-year, totaling Rs449.2 billion.

The company's royalty expense for the quarter increased by 69% year-over-year to Rs17.2 billion, maintaining a 12% share of net sales, consistent with OGDC's historical trends. Exploration costs also rose, reaching Rs10.9 billion due to two dry wells, Chak203 and Saidpur. Operating expenditures were reported at Rs50.9 billion, a 45% increase from the previous year, with operating expenditures per barrel of oil equivalent climbing to US$11.6.

A key factor in OGDC's financial performance was a Rs44 billion tax reversal following the Federal Court Commission's decision regarding super tax, reducing the company's effective tax rate to 6% from 39% in the previous fiscal year. The company's receivables recovery ratio improved to 103%, aided by stronger recoveries from Sui companies, leading to higher dividend payouts for the second consecutive year.

OGDC declared a final cash dividend of Rs6 per share for the fourth quarter, raising the full-year payout to a record Rs17 per share, equating to a 30% payout ratio. Despite a decrease from the previous year's 38% payout ratio, the company maintains a strong financial outlook, with a continued "BUY" stance on its stock, trading at an estimated price-to-earnings ratio of 6.1 for fiscal year 2027 and 5.2 for fiscal year 2028.