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OGDC: Exploration Upside Will Support Stronger Future Cash Returns

Digitalization And Basin Expansion Will Secure Energy Demand

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OGDC
AnalystHighTarget
Not Invested
Published 07 Jul 2025

Update shared on 12 Dec 2025

Fair value Increased 6.25%
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AnalystHighTarget's Fair Value
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1Y
23.8%
7D
1.2%

Analysts have raised their price target on the company from 400 dollars to 425 dollars, citing slightly higher long term revenue growth expectations that more than offset modestly lower projected profit margins and a richer future earnings multiple.

What's in the News

  • Government of Pakistan executed three exploration agreements covering one offshore and two onshore blocks, expanding OGDCL's portfolio in Eastern Offshore Indus C and key onshore areas, and reinforcing its long term growth prospects (Key Developments)
  • OGDCL commenced 1,100 BPD oil production from its new Pasakhi 14 development well in District Hyderabad, using advanced drilling technologies to optimize output and reservoir integrity (Key Developments)
  • OGDCL announced a gas and condensate discovery at Bitrism East 1 in Sindh, with combined test potential of 22.5 MMSCFD gas and 690 BPD condensate, supporting indigenous energy supply (Key Developments)
  • Soghri North Well 1 was brought into production with 14 MMSCFD gas and 430 BPD condensate capacity, connected via a new 14 km flow line to Dakhni Plant for early monetization (Key Developments)
  • The company proposed and then secured shareholder approval for a final cash dividend of PKR 5 per share for FY 2025, in addition to three interim dividends already paid (Key Developments)

Valuation Changes

  • Fair Value: raised slightly from 400 dollars to 425 dollars, reflecting a modest upward revision to intrinsic valuation.
  • Discount Rate: increased marginally from 26.59 percent to 26.71 percent, implying a slightly higher required return on equity.
  • Revenue Growth: projected long term revenue growth has risen slightly from about 6.63 percent to about 6.93 percent, supporting higher forward earnings expectations.
  • Net Profit Margin: forecast margin has been reduced modestly from about 41.5 percent to about 40.2 percent, incorporating somewhat higher cost and tax assumptions.
  • Future P/E: the target future valuation multiple increased meaningfully from about 16.3 times to about 19.3 times earnings, indicating a richer expected market premium.

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