External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Pakistan’s listed E&P sector reported earnings of Rs74bn, down 15% YoY and 7% QoQ.</li><li>Net sales for the sector remained flat on a YoY basis and grew by 3% QoQ to Rs217bn in 2QFY26. This QoQ growth is primarily attributable to a slight increase in oil production during the quarter.</li><li>The country’s total oil production averaged 64,773 bpd in 2QFY26, reflecting a 2% YoY increase, while gas production fell 4% YoY to around 2,736mmcfd. In addition, crude oil prices fell 13% YoY to US$65.37/bbl from US$75.30/bbl in 2QFY25.</li></ul>

Pakistan’s listed E&P sector reported earnings of Rs74bn, down 15% YoY and 7% QoQ.Net sales for the sector remained flat on a YoY basis and grew by 3% QoQ to Rs217bn in 2QFY26. This QoQ growth is primarily attributable to a slight increase in oil production during the quarter.The country’s total oil production averaged 64,773 bpd in 2QFY26, reflecting a 2% YoY increase, while gas production fell 4% YoY to around 2,736mmcfd. In addition, crude oil prices fell 13% YoY to US$65.37/bbl from US$75.30/bbl in 2QFY25.

Pakistan Oil & Gas and Exploration – E&P Sector Earnings Remain Under Pressure in 2QFY26; Earnings Down 15% YoY and 7% QoQ

<ul><li>According to news reports, Pakistan is considering deferring 2-3 RLNG cargoes per month (29 in a year) from Qatar under its existing take-or-pay contracts for 9 cargoes per month to address the current gas surplus issues in the country.</li><li>Previously, OGRA in its reports had projected Pakistan gas demand (including RLNG) to surpass 6000mmcfd by 2026. However, due to various foreseeable and inevitable factors, demand/supply have contracted substantially to less than 4,000mmcfd.</li><li>We believe, if 2 cargoes of Qatar are sold in the international market or deferred beyond 2031, this will increase domestic E&Ps volumes to around 3000 mmcfd, suggesting around 70% of the volumes will be recovered.</li></ul>

According to news reports, Pakistan is considering deferring 2-3 RLNG cargoes per month (29 in a year) from Qatar under its existing take-or-pay contracts for 9 cargoes per month to address the current gas surplus issues in the country.Previously, OGRA in its reports had projected Pakistan gas demand (including RLNG) to surpass 6000mmcfd by 2026. However, due to various foreseeable and inevitable factors, demand/supply have contracted substantially to less than 4,000mmcfd.We believe, if 2 cargoes of Qatar are sold in the international market or deferred beyond 2031, this will increase domestic E&Ps volumes to around 3000 mmcfd, suggesting around 70% of the volumes will be recovered.

(Corrected) Pakistan Oil & Gas Exploration: Qatar Cargo Diversion to Help Lift Volumes

<ul><li>According to news reports, Pakistan is considering deferring 2-3 RLNG cargoes per month (29 in a year) from Qatar under its existing take-or-pay contracts for 9 cargoes per month to address the current gas surplus issues in the country.</li><li>Currently Pakistan’s indigenous gas supply stands at 2,770 mmcfd, based on the last six months avg, while RLNG imports average 936 mmcfd, taking the total supply to an average of 3,707 mmcfd.</li><li>We believe, if 2 cargoes of Qatar are sold in the international market or deferred beyond 2031, this will increase domestic E&amp;Ps volumes to around 3000 mmcfd, suggesting around 70% of the volumes will be recovered.</li></ul>

According to news reports, Pakistan is considering deferring 2-3 RLNG cargoes per month (29 in a year) from Qatar under its existing take-or-pay contracts for 9 cargoes per month to address the current gas surplus issues in the country.Currently Pakistan’s indigenous gas supply stands at 2,770 mmcfd, based on the last six months avg, while RLNG imports average 936 mmcfd, taking the total supply to an average of 3,707 mmcfd.We believe, if 2 cargoes of Qatar are sold in the international market or deferred beyond 2031, this will increase domestic E&amp;Ps volumes to around 3000 mmcfd, suggesting around 70% of the volumes will be recovered.

Pakistan Oil & Gas Exploration: Qatar Cargo Diversion To Help Lift Volumes

<ul><li>We expect Topline E&P universe to post an 8% YoY decline in earnings in 1QFY26, primarily due to a decline in hydrocarbon production and oil prices.</li><li>Oil production during the quarter averaged 62.2k bpd, down 5% YoY, while gas production fell 7% to around 2,807 mmcfd.</li><li>The expected fall in earnings is primarily attributable to a higher Effective Tax Rate (ETR), which is expected to normalize to around 35% in 1QFY26 vs. 26% in the previous quarter.</li></ul>

We expect Topline E&P universe to post an 8% YoY decline in earnings in 1QFY26, primarily due to a decline in hydrocarbon production and oil prices.Oil production during the quarter averaged 62.2k bpd, down 5% YoY, while gas production fell 7% to around 2,807 mmcfd.The expected fall in earnings is primarily attributable to a higher Effective Tax Rate (ETR), which is expected to normalize to around 35% in 1QFY26 vs. 26% in the previous quarter.

Pakistan Oil & Gas Exploration - E&Ps Profitability Likely To Decline By 8% YoY In 1QFY26; Market Weight Maintained

Equity Bottom-Up

Sui Northern Gas Pipelines Limited / Equity Bottom-Up

Sui Northern Gas Pipelines Limited (SNGP PA)

<ul><li>As per news reports, Federal Cabinet has lifted ban on new gas connection, however, these new connections will be provided at RLNG rate, which is around US$12-13/mmbtu, or Rs3,300-3,700/mmbtu.</li><li>We believe, the lifting of ban on gas connections will bode well for E&P companies as alone SNGP has curtailed over 300 mmcfd of gas from domestic gas exploration companies namely PPL, OGDC, MARI, and POL.</li><li>With news reports suggesting pending gas connection request of 3.2mn (for SNGP) and assuming 3.5mn country wide gas connection requests, this has potential to consume additional 250mmcfd of gas (equivalent to 2.5 cargoes additional).</li></ul>

As per news reports, Federal Cabinet has lifted ban on new gas connection, however, these new connections will be provided at RLNG rate, which is around US$12-13/mmbtu, or Rs3,300-3,700/mmbtu.We believe, the lifting of ban on gas connections will bode well for E&P companies as alone SNGP has curtailed over 300 mmcfd of gas from domestic gas exploration companies namely PPL, OGDC, MARI, and POL.With news reports suggesting pending gas connection request of 3.2mn (for SNGP) and assuming 3.5mn country wide gas connection requests, this has potential to consume additional 250mmcfd of gas (equivalent to 2.5 cargoes additional).

Topline Flash Note: Pakistan E&Ps and Sui Cos: Lifting of Ban on Gas Connection; Some Respite for Domestic E&Ps Production

Singapore

Polaris Ltd. is a Singapore-based investment holding company. It engages in the import and export of pre-owned luxury goods and lifestyle products, as well as the corporate sale of telecommunication, IT, educational robotics, and consumer electronics products. The company also provides after-market services for equipment repairs and refurbishments. Polaris Ltd. was incorporated in 1984 and is headquartered in Singapore.

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Polaris (POL SP)

Pakistan Oil & Gas and Exploration – E&P Sector Earnings Remain Under Pressure in 2QFY26; Earnings Down 15% YoY and 7% QoQ

Pakistan’s listed E&P sector reported earnings of Rs74bn, down 15% YoY and 7% QoQ. Net sales for the sector remained flat on a YoY basis and...

Topline Securities

(Corrected) Pakistan Oil & Gas Exploration: Qatar Cargo Diversion to Help Lift Volumes

According to news reports, Pakistan is considering deferring 2-3 RLNG cargoes per month (29 in a year) from Qatar under its existing take-or-pay...

Topline Securities

Pakistan Oil & Gas Exploration: Qatar Cargo Diversion To Help Lift Volumes

According to news reports, Pakistan is considering deferring 2-3 RLNG cargoes per month (29 in a year) from Qatar under its existing take-or-pay...

Topline Securities

Pakistan Oil & Gas Exploration - E&Ps Profitability Likely To Decline By 8% YoY In 1QFY26; Market Weight Maintained

We expect Topline E&P universe to post an 8% YoY decline in earnings in 1QFY26, primarily due to a decline in hydrocarbon production and oil...

Topline Securities

Topline Flash Note: Pakistan E&Ps and Sui Cos: Lifting of Ban on Gas Connection; Some Respite for Domestic E&Ps Production

As per news reports, Federal Cabinet has lifted ban on new gas connection, however, these new connections will be provided at RLNG rate, which is...

Topline Securities

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