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The Pakistan Oilfields Limited (POL) has reported a staggering 73.5% decline in profit after tax in the first quarter of the ongoing Fiscal Year 2025, primarily due to the unsuccessful results from Balkassar Deep-1A well drilling, reports WealthPK.

The company’s profit plummeted to Rs2.57 billion from Rs9.71 billion during the same period the previous year, translating to earnings per share of Rs9.05 compared to Rs34.20 in the same quarter the previous year. The POL is a publicly listed Pakistani company focused on exploration, drilling, and production of crude oil and natural gas. It also markets POLGAS liquefied petroleum gas and facilitates petroleum transmission.

According to the financial results on the Pakistan Stock Exchange (PSX), the primary factor contributing to this downturn is a hefty exploration cost of Rs7.66 billion  associated with the failed drilling operation at Balkassar Deep-1A, which did not yield any productive results during the review period.

This setback significantly impacted the company’s overall profitability. Its sales revenue decreased 7.4%, attributed mainly to reduced production levels and negative currency fluctuations during the review period. The production statistics reveal that the company’s crude oil output fell by 6.3%, while gas production decreased by 3.7%, resulting in an average daily production rate of 4,583 barrels per day (bpd) for crude oil and 60.88 million standard cubic feet per day (mmscfd) for gas during this quarter.

 During the three-month period, the company produced 12,510 and 170 metric tons of LPG and Sulphur, respectively. However, 5,640 US barrels of solvent oil were produced compared to 5,908 US barrels in the same period last year. Despite these challenges, the POL is currently engaged in exploration and production activities across multiple fields, demonstrating its commitment to enhancing its operational capabilities and assessing new opportunities.

The company is evaluating the feasibility of drilling Jhandial-04 well in the Ikhlas block, while 3D seismic data processing is being conducted at the Pindori Lease to assess the Chorgali formation's potential. Furthermore, preparations for the Makori Deep-3 well are underway in the Tal block. The Adhi South-9 well has reached its target depth, producing 530 barrels of oil and 0.6 million cubic feet of gas daily. The current financial environment presents considerable difficulties for the POL. However, the management remains optimistic that strategic measures will drive better performance in the upcoming quarters as they focus on overcoming this setback and regaining profitability in their operations.

Credit: INP-WealthPk