The high crude oil price environment benefits the oil and gas exploration and production sector. The fiscal year FY22 witnessed spiking oil prices, which is expected to boost revenues and earnings of the E&P sector. Mari Petroleum Company Limited (PSX: MARI) that announced its financial performance for FY22 yesterday also benefitted from higher oil prices.

MARI’s revenues were seen growing by 32 percent year-on-year as a result of higher prices as well as higher hydrocarbon production. Improvement in Mari’s production volumes have been seen during FY21 that seems to have continued in FY22. The company’s gas production in FY22 was up by five percent year-on-year, while crude oil production remained steady. This translated into highest ever production by the E&P company. This was also accompanied by depreciating currency.

The rise in topline trickled down, and the company posted growth of around 19 percent year-on-year in profits before tax for FY22. This was despite 140 percent growth in exploration and prospecting expenditure, and higher share of loss in associates. However, the ultimate bottom-line grew only by five percent year-on-year, which was due to the imposition of Super Tax on the companies in the latest budget.

Revenues in 4QFY22 grew by 56 percent year-on-year due to higher gas production (six percent year-on-year), higher gas wellhead price of Mari Gas Field and currency depreciation that was around 20 percent year-on-year. However, the supertax imposition resulted in 31 percent decline in earnings for the quarter, which increased the effective tax for 4QFY22 as well as FY22. The company announced an interim cash dividend of Rs62 per share in addition to Rs62 already announced.