Oman’s leading exploration and production company, OQ Exploration and Production (OQEP), has announced its financial results for the fiscal nine months ended September 30, 2025.
The company reported
significant financial highlights, including revenue of OMR 633.8 million
(approximately $1,648.3 million) and an EBITDA of OMR 471.2 million (around
$1,225.6 million).
Additionally, the
adjusted cash flow from operations increased by 10 per cent to OMR 424.8
million ($1,104.8 million), with a solid return on capital employed (ROCE) of
23.3 per cent.
Operationally, OQEP
maintained stable production levels at 224.4 kboepd, comprising oil and
condensate production of 121.2 kbblpd (compared to 125.3 kbblpd in 9M 2024) and
gas production of 103.2 kboepd (slightly down from 103.5 kboepd in 9 million
2024).
This growth has been
supported by key asset enhancements, including the Bisat C Expansion at Block
60, which is now producing over 70 kboepd (gross), and the extension of the
Block 53 EPSA to 2050, offering improved fiscal terms.
Future revenue
prospects are bolstered by new commercial agreements, such as the Natural Gas
Sales Agreement to supply Marsa LNG from Block 10 and the Gas Sales Agreement
with the Integrated Gas Company.
Moreover, OQEP has
formed new partnerships, signing exploration agreements with Genel Energy for
Block 54 and MOUs with Turkish Petroleum Corporation and Petronas.
Regarding shareholder
returns, OQEP has declared a total base dividend of OMR 173.1 million at 7.21
baizas per share.
Additionally, a
Performance Linked Dividend (PLD) for H1 2025, amounting to OMR 44.2 million or
5.52 baizas per share, will be paid in two equal instalments.
The second instalment of the H1 2025 PLD, set
at 2.76 baizas per share, is scheduled for payment on 25 November 2025 to
shareholders registered before 13 November 2025.
The current share
buyback program targets 45-60 million shares, with approximately 50 per cent of
this target already achieved.
Mahmoud Al Hashmi,
Acting Chief Executive Officer, OQEP, commented: “OQEP’s strategy
supported its performance over the past nine months despite market challenges.
The Company increased its sales volume of oil and condensates by nearly 12 per
cent during this period, which offset lower oil prices and resulted in revenue
and EBITDA similar to last year’s results. OQEP also reported a 10 per cent
rise in its adjusted cash flow to OMR 424.8 million and a return on capital
employed of 23.3 per cent.
“The Bisat C Expansion
at Block 60 is now fully operational which directly enhances the production
from Block 60. Several new commercial agreements were signed, including the
extension of the Block 53 EPSA to 2050 with new fiscal terms. Marsa LNG entered
into a Natural Gas Sales Agreement for 150 mmscfd from Block 10; the Marsa LNG
project is currently over 25 per cent complete. OQEP and its partner Oxy signed
the Block 65 Gas Sales Agreement with Integrated Gas Company (IGC), allowing
the monetisation of produced equity entitlement.”
“OQEP also entered
partnership and exploration agreements with international operator Genel Energy
in Block 54 and signed MOUs with Turkish Petroleum Corporation (TPAO) and
Petronas.”
“OQEP delivered
significant value to its shareholders during the past nine months. OQEP paid
out more than OMR 173 million in base dividend, the quarterly dividend of 7.21
baizas per share. OQEP also paid its first Performance Linked Dividend
for the first half of the year. This totalled more than OMR 44 million or
5.52 baizas per share which were paid in two equal instalments at 2.76 baizas
per share whilst the second instalment is due for payment on 25 November
2025. The share buyback programme has made good progress with around 50 per
cent of the target 45-60 million shares have been acquired reflecting our
commitment to enhance the shareholders’ value.”
“OQEP continues to
operate as the National Upstream Champion in support of Oman Vision 2040 and
aims to close out the financial year in collaboration with employees, partners,
and the Government of Oman.”
On a year-over-year
basis, OQEP delivered financial results that were broadly consistent with the
previous period, despite a nearly 13 per cent decline in the average realised
sales price of Oil and Condensates.
The Company increased
its sales volumes of Oil and Condensates by 11.8 per cent compared to the nine
months of 2024, which contributed to achieving revenue performance comparable
to that of 2024.
The average realised
sales price for Oil and Condensates was $72.0 per barrel, compared to $82.6 per
barrel for the same period in 2024.
EBITDA remained steady
at OMR 471.2 million ($1,225.6 million), with a margin of 74 per cent.
Net profit, excluding Abraj, fell 9 per cent to OMR 236.9 million ($616.0
million), primarily driven by higher finance costs and lower oil
prices.
Capital Expenditure rose 7 per cent to OMR 198.7 million ($516.7 million), mainly due to completing the Bisat C Expansion at Block 60 and investing in Block 53.
Free Cash Flow reached OMR 198 million, while Return on Capital Employed for the nine months of 2025 was 23.3 per cent, a top quartile return performance for the energy sector.
OQEP’s cash balance of
OMR 161.2 million ($419.3 million) reduced Net Debt to OMR 222.1 million ($577.6
million), resulting in a leverage ratio of 0.35x EBITDA.
OPERATIONAL REVIEW
OQEP manages a diverse
portfolio of fourteen upstream oil and gas assets in Oman, with nine currently
producing.
The Company either operates these concessions
or partners as a non-operating participant with joint venture partners. Assets
range from development and production to appraisal and exploration
stages.
Throughout the first
nine months of 2025, OQEP undertook several initiatives and entered into
agreements to develop and expand its asset portfolio.
The Bisat C Expansion at Block 60 became fully
operational, resulting in increasing production.
OQEP, together with
Oxy and its other Block 53 partners, signed an agreement with the Ministry of
Energy and Minerals to extend the Block 53 EPSA to 2050.
Block 53 EPSA is an
oil asset which accounted for approximately 7 per cent of the Company’s working
interest production.
The Block 53 EPSA
partners envisage a potential additional 800 million gross oil barrels for
future development, with the Block 53 EPSA extension providing improved fiscal
terms.
OQEP continues to collaborate with BP and the other Block 61 partners to revise the asset development plan for Block 61.
The updated plan anticipates the development of up to 2 TCF of additional recoverable gas resources to support future growth initiatives.
Block 61 accounts for
approximately 41 per cent of the Company’s working interest production and is
recognised as one of the largest tight gas reservoirs, representing a
significant new source of natural gas for Oman.
Block 61 produces 1.5
billion cubic feet of gross gas per day, which is distributed through Oman’s
national gas grid.
Marsa LNG has signed a
Natural Gas Sales Agreement with IGC for its 150 mmscfd equity from Block 10.
The Marsa LNG project
is over 25 per cent complete and will feature a fully electric liquefaction
plant powered by a dedicated solar facility, aiming to be among the lowest GHG
emission LNG plants globally.
The plant will help meet rising marine LNG
demand.
Additionally, OQEP on
2 November 2025, together with its partner, Oxy, signed a Gas Sales Agreement
with the IGC to supply gas from Block 65. This long-term agreement, effective
though 2037, supports the monetisation of OQEP’s equity gas entitlement and
strengthens the Company’s long-term cash-flow profile.
In terms of
exploration, OQEP continued to develop its growing roster of international
partners to mitigate risk and develop technical knowledge.
OQEP entered into an
Block 54 EPSA with Ministry of Energy and Minerals and Genel Energy on 10 March
2025. Extensive evaluation of previous exploration data is well under way.
Following promising
exploration results, OQEP, together with its Block 47 partner, ENI Oman B.V.
(“ENI”), has been granted a six-month extension to the Block 47 EPSA.
This extension allows the completion of
post-well technical studies and the development of a firm strategy for Block
47.
OQEP, as part of its
co-operation with the Ministry of Energy and Minerals, together with the
financial advisor, Scotiabank, continued to assist in the marketing of Blocks
18, 36, 43A and 66, to bring further new investment into Oman’s exploration and
production sector.
These blocks form part
of the 15 blocks that the Ministry of Energy and Minerals intends to market
during the course of 2025 and 2026.
Post-period, OQEP and
Petronas, Malaysia’s national energy company, entered into a Memorandum of
Understanding establishing a framework for strategy collaboration in
international upstream oil and gas ventures.
DIVIDEND AND SHARE
BUYBACK PROGRAMME
OQEP’s dividend policy
prioritises sustainable returns and disciplined capital allocation. The Company
plans to deliver a base dividend of OMR 230.7 million ($600 million) in both
2025 and 2026, with an
additional Performance-Linked Dividend (“PLD”) equal to 90 per cent of the
Company’s expected free cash flow minus the base dividend.
The dividend payment
remains subject to Board and shareholder approvals, the prevailing market
conditions and the long-term value considerations for the Company.
OQEP also initiated
its first share buyback programme to further enhance shareholder value. The
programme is targeting the repurchase of 45-60 million shares by February 2026.
OUTLOOK
OQEP expects production for the full year 2025 to be within the range of 220-230 kboepd net working interest; Operating Expenditure to be less than $10/boe; and Capital Expenditure to be within the range of $0.8 – 0.9 billion. -TradeArabia News Service
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