MARI joins $1 billion club as gas exploration pays off

KARACHI: Mari Petroleum Company Limited (MARI), one of the country's largest natural gas producers, became the seventh listed company to cross $1 billion in market capitalisation on Monday, as its share price soared on the back of successful exploration activities.

MARI, which operates gas reservoir at Mari Gas Field in Daharki, Sindh, saw its market value rise to Rs288.95 billion ($1.02 billion) at the close of trading at the Pakistan Stock Exchange (PSX), according to PSX data.

The company's share price has surged 43 percent since the end of June and analysts said this comes on the back of increased exploration activity by the company in recent months. Earlier on Monday, MARI announced that it had successfully drilled and tested a third horizontal development well in Habib Rahi Limestone reservoir of Mari Gas Field, which will be put on regular production immediately.

“We are pleased to inform that MARI has successfully drilled and tested a third horizontal development well Mari-124H in Habib Rahi Limestone (HRL) Reservoir of Mari Gas Field in Daharki, Sindh Province,” the comapny said in a filing to the PSX.

“The well is part of the Mari Field Revitalization Project aimed at better managing the delivery pressure, sustaining the gas production, and optimal reserves recovery, all leading to the arrest of the depletion in production.”

The company said well was drilled to a total measured depth of 1,740 meters with a horizontal section length of around 750 meters. “After completion, the well was tested at a rate of around 17 million standard cubic feet per day (mmscfd) of gas at a flowing wellhead pressure of 470 pounds per square inch gauge (psig).”

The company said the well will be put on regular production immediately after releasing the drilling rig. “The company is evaluating opportunities to drill additional horizontal wells in due course.”

Last month, MARI commenced gas production from its appraisal well in Sindh, which was also part of its Mari Field Revitalization Project aimed at sustaining gas production and optimal reserves recovery.

MARI has a 70 percent exploration success rate, which is much higher than the industry averages of around 33 percent national and 14 percent international, according to its website. The company's key customers include fertiliser manufacturers, power generation companies, gas distribution companies and refineries.

Apart from increased exploration, Analysts said MARI also benefits from having a low circular debt component, as compared to other exploration and production (E&P) companies such as Oil and Gas Development Company Limited and Pakistan Petroleum Limited, which are owed billions of rupees by state-owned gas utilities.

The reason is that MARI's biggest buyer is the fertiliser sector, which accounts for nearly 90 percent of the revenue. These companies, unlike teh state-owned unitlities, ensure timely payments, thus there are not many cash flow issues as compared to others, they added.

Analayts said that the recent increase in gas tariff by the government would also bode well for energy companies including MARI, as it would improve their profitability and cash flows. MARI is the seventh listed company in Pakistan to cross the $1 billion market cap milestone, joining OGDC, Colgate-Palmolive Pakistan Limited, Nestle Pakistan Limited, Meezan Bank Limited, PPL and Pakistan Tobacco Company.

"Interestingly, five months back, there were only two listed companies (OGDC and Nestle) with a market capitalisation of more than $1 billion," Mohammed Sohail, CEO of Topline Securities, said in a post on social media platform X.