Muscat: OQ Exploration and Production (OQEP), the foremost exploration and production company in Oman, which made its debut on the Muscat Stock Exchange in October 2024, has released its financial results for the fiscal year 2024, reporting an EBITDA of OMR614 million. These results underscore OQEP’s consistent capability to generate robust and reliable cash flows from its premium asset portfolio.
Ahmed Al Azkawi, Chief Executive Officer of OQEP, stated: “OQEP has achieved impressive results this year, leveraging our status as a low-cost operator with high-quality assets that yield industry-leading returns. This year also marked the listing of our shares on the Muscat Stock Exchange.”
“The offering attracted significant investor interest, raising OMR780 million. In line with our commitment to enhancing shareholder value, we have announced a planned capital return through dividends, targeting a base dividend of OMR230 million for 2025 and 2026, contingent on company performance and Board approval. This capital return may also be supplemented with a performance dividend.”
“We remain the preferred partner for the Omani Government and numerous international oil companies (IOCs) that collaborate with us to develop Oman’s energy resources. Our strategic location and diverse product mix position OQEP favorably to satisfy the global demand for oil and, increasingly, gas.”
“We are actively advancing our asset development in accordance with our strategic objectives. Notably, we have successfully increased the reserves of our key asset, Block 60, through enhanced recovery methods, including infill drilling and new discoveries. We are also in discussions with our partners to explore additional growth opportunities across our portfolio, as well as pursuing new licensing ventures,” he added.
Our decarbonization strategy is being effectively executed, with the emission intensity of Block 60 already falling below the Oil and Gas Climate Initiative's target of 17 kg CO2/boe, currently standing at 14.33 kg CO2/boe for 2024. Safety remains a fundamental component of our approach; our investment in OQEP’s Health and Safety accountability program is yielding a consistent decline in the Lost Time Incident Rate.
OQEP’s strategy is poised to continue creating value for its shareholders while contributing to a sustainable and secure energy future for Oman.
In 2024, OQEP maintained robust cash generation from its assets. Revenue was bolstered by stable production levels throughout the year, with gas revenue rising by 20% due to heightened market demand. However, the financial results for 2024 were adversely impacted by the sale of 40% of Block 60 in 2023. The financials for 2023 reflect 100% production from Block 60, resulting in a gain of OMR 274.6 million from the divestment. Excluding the effects of the Block 60 sale, the net profit for 2024 would have been 2.4% lower than in 2023. Additionally, a slight decline in oil prices of $3.2/bbl in 2024 compared to 2023 further influenced the results for 2024.
OQEP's dividend strategy is closely tied to the generation of sustainable cash flow for its shareholders. It is anticipated to include a base dividend of OMR230.7 million ($600 million) along with a performance-based dividend that will amount to 90% of the Company's projected free cash flow, in addition to net proceeds from any asset sales, after deducting the base dividend. This policy will be influenced by various factors, including current market conditions and the outlook for the Company's operational environment.
In 2024, OQEP has already disbursed a total dividend of OMR173 million, and the Board of Directors has recommended an extra cash dividend of OMR57.68 million. Shareholders are set to receive a cash dividend of 7.21 baisas per ordinary share. This proposed cash dividend awaits formal approval at the Annual General Meeting of shareholders, which is scheduled for 12 March 2025.
Operationally, OQEP boasts a robust portfolio of fourteen upstream oil and gas assets located in Oman. These assets vary from those in development and production phases to others that are being evaluated for commercial viability or are in exploration stages. OQEP either manages these assets directly or collaborates as a participant or non-operator with various joint venture partners.
Among its 14 assets, six are significant production sites. Block 60 stands out as OQEP’s flagship asset, an onshore contract area primarily focused on oil production, contributing nearly 16% of OQEP’s total working interest production in 2024. Throughout the year, production strategies were meticulously crafted to optimize recovery while ensuring the long-term viability of Block 60’s resources. Operating expenses were effectively controlled, resulting in a cost per barrel of $5.94. Anticipated new discoveries at North Gharif are expected to enhance throughput for Block 60 in 2025.
Significant assets for the Company include Block 61, a non-associated gas and condensate asset, which accounted for approximately 40% of the Company’s working interest production in 2024. An updated Field Development Plan is currently being prepared to assess the block’s full potential recoverable gas resources for future expansion initiatives.
Block 10, another non-associated gas and condensate asset that began production in 2023, achieved its production targets by July 2024. Meanwhile, Block 9, which encompasses both oil and gas, contributed around 20% to the Company’s working interest production. Seismic reinterpretation efforts were conducted on Block 53, recognized as the largest thermal Enhanced Oil Recovery (EOR) project in the Middle East, setting the stage for upcoming exploration endeavors. Additionally, Block 65, an oil and gas asset operational since late 2022, has shown promising production growth potential.
During this period, OQEP maintained its exploration assets in Blocks 48, 11, and 47. The Company also continued its operations under the offshore production contract in Block 8, which includes the MGP oil and gas processing facility. This facility processes output from Block 8 and is strategically positioned to support new oil and gas discoveries in the Musandam region, along with two service agreements for producing areas in Block 6.
Construction of the Marsa LNG Bunkering Project has commenced in Sohar and is progressing according to the established budget and timeline.
