Mari Energies Sees Record Production Amid Challenges and Future Developments

Karachi: Mari Energies Limited (MARI) outlined both achievements and challenges during its corporate briefing, highlighting a record production level despite financial constraints and unveiling plans for future growth. The company achieved its highest production of 39.13 million barrels of oil equivalent (MMBOE) in FY25, although earnings were impacted by gas curtailments and an additional 15% royalty charge.

The company has diversified its operations, reducing its reliance on the Mari field to 80%, thanks to new discoveries in the Waziristan and Sujawal blocks. A significant development was the approval of a production plan in collaboration with ADNOC for the Abu Dhabi block, aiming for a production target of 25,000 barrels per day from three discoveries.

MARI faces potential production declines of 10-15% in FY26 if its RLNG cargo deferment plan is not approved by Qatar. The company is exploring third-party allocations to mitigate this risk but acknowledges it may not fully offset the impact.

The expansion of the Shewa and Spinwam fields is underway, with an expected combined production capacity of 300 million cubic feet per day (mmcfd) within 2-3 years. The estimated capital expenditure for this expansion ranges from $400 to $500 million, though MARI is considering cost-reducing alternatives. Meanwhile, the Ghazij and Shawal fields, currently in testing, could see a production increase of 180 mmcfd once allocation is granted.

MARI aims to maintain a production level of 595-600 mmcfd from its HRL reservoir through Production Enhancement Facilities, with no plans for increased output. The company also shared updates on its Sky47 project, anticipating the completion of a data center soon and another in Karachi by the end of next year, utilizing a hybrid energy mix.

The management plans to maintain a drilling pace of 15-20 wells annually over the next five years. Despite the challenges, MARI remains committed to sustaining and growing its operations, with JS Global maintaining a hold stance on the company’s stock, trading at a FY26/27 price-to-earnings ratio of 15.0/12.3x.