Muscat, Oman – OQ Exploration and Production SAOG (“OQ” or the “Company”) (Tick: OQEP.OM), the leading exploration and production company in the Sultanate of Oman, today announced its audited financial results for the first half period ended June 30, 2025.

Financial performance indicators

• Revenues reached OMR 428.1 million (USD 1.1 billion). Earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to OMR 317.4 million (USD 825.6 million).
• Adjusted cash flows from operations increased by 20% to OMR 289.2 million (USD 752.1 million).
• Return on operating capital for the first half of 2025 was 24.4%. 25.8% for the second quarter of 2025, an increase of 16.4% (first quarter of 2025: 22.1%).
• Cash balance rose significantly by 31% to OMR 210.2 million (USD 546.6 million) compared to OMR 160.1 million (USD 416.5 million) in the first half of 2024, with a low debt ratio of 0.27 times EBITDA.

• A basic quarterly dividend of OMR 57.7 million (USD 150 million) for the second quarter of 2025 will be paid in September 2025. In addition, the Board of Directors has proposed a basic quarterly dividend of OMR 57.7 million (USD 150 million) for the third quarter of 2025, which is scheduled to be paid in November 2025.

• The first performance-related dividend for the first half of 2025 proposed by the Board of Directors: amounting to OMR 44.2 million (USD 114.9 million), to be paid in equal installments in September and November 2025.

• Boosting returns to shareholders by launching a share buyback program aimed at purchasing 45 to 60 million shares.

Key operational achievements

• Total production is stable at 222.3 thousand barrels of oil equivalent per day of oil and condensates at about 120.1 thousand barrels of oil equivalent per day (first half of 2024: 126.1 thousand barrels of oil equivalent per day) and gas at 102.3 thousand barrels of oil equivalent per day (first half of 2024: 101.3 thousand barrels of oil equivalent per day).
• The company continues to achieve steady growth driven by asset optimization, including the early start-up of the Basat C field expansion in concession area 60, and the extension of the exploration and production sharing agreement in concession area 53 until 2050 with improved overall financial terms.
• Construction operations have commenced for the Marsa LNG project, which is expected to be completed by 2028.
• Signing agreements with a group of international partners in the field of exploration, including Genel Energy and the Turkish Petroleum Corporation.

Ahmed Al-Azkoui, CEO of OQ Exploration and Production, said:

OQ’s exploration and production strategy contributed to a strong performance in the first half of the year, despite the challenges posed by the global economy and its significant impact on the sector. Despite lower oil prices, the company successfully increased its sales volumes of crude oil and condensate during this period, resulting in revenues comparable to those recorded in the first half of 2024. The company generated strong cash flows across its various business segments, with adjusted cash flow from operations increasing by 20%, alongside a return on operating capital of 24% for the first half and approximately 26% for the second quarter. Furthermore, the company strengthened its financial position by increasing its cash balance by 31% to OMR 210.2 million, with a debt-to-EBITDA ratio of 0.27 times EBITDA.

On the other hand, OQ Exploration and Production continued to make significant progress on commercial initiatives and negotiations across its entire asset portfolio, aiming to maximize value from its core business segments. In June, the Basat C expansion project in Block 60 commenced operations ahead of schedule, and is expected to provide an additional 37,000 barrels per day of oil processing capacity. In May, OQ Exploration and Production, Occidental Petroleum (Oxy), and other partners announced the extension of the Exploration and Production Sharing Agreement (EPSA) for Block 53 until 2050, adding approximately 800 million barrels of oil to the company’s total production on improved financial terms. Furthermore, the second quarter saw the commencement of construction on the Marsa LNG plant, a $1.6 billion joint venture with Total Energies. The company is currently in discussions with its partners at BP to increase gas production from Block 61 by up to 2 trillion cubic feet per day to support future projects.

"In the same context, OQ Exploration and Production continues to attract new international partners, including Genel Energy and Turkish Petroleum Corporation (“TPAO”), through the signing of new exploration agreements.

In June, shareholders approved an amendment to OQ Exploration and Production’s Articles of Association to enable the company to repurchase its shares. In July, the company announced the launch of a share buyback program aimed at enhancing returns to shareholders. The Board of Directors also proposed to the Annual General Meeting a quarterly cash dividend of OMR 57.7 million for the second quarter, payable to eligible shareholders in September 2025. Additionally, the Board proposed a basic dividend of OMR 57.7 million for the third quarter, payable in November 2025. For the first performance-related dividend of OMR 44.2 million for the first half of 2025, the Board proposed that it be paid to shareholders in two equal installments in September and November 2025.

"OQ Exploration and Production is proud to be the leading national exploration, development and production company and to contribute to achieving the goals of Oman Vision 2040. We look forward to achieving more successes during the second half of the year. On this occasion, I am pleased to express my deep gratitude and appreciation to the employees, partners and the Government of the Sultanate of Oman."

OQ Exploration and Production achieved outstanding financial performance during the first half of 2025 despite lower oil prices compared to the first half of 2024. The company's production levels remained stable at 222.3 thousand barrels of oil equivalent per day, compared to 227.4 thousand barrels per day during the first half of 2024. The company also succeeded in increasing the volume of oil and condensate sales by 10.8% compared to the first half of 2024, which contributed to achieving revenues similar to those of the first half of 2024 when oil was priced at US$82.2 per barrel. Revenues for the first half of 2025 amounted to approximately OMR 428.1 million (US$1.1 billion) based on US$74.4 per barrel.

Gross profit remained relatively stable at OMR 164.4 million (USD 427.7 million), with the cost of sales holding steady at OMR 263.6 million (USD 685.7 million). EBITDA also remained unchanged at OMR 317.4 million (USD 825.6 million), with a sustainable EBITDA margin of 74%. Reported net profit decreased by 10.8% to OMR 166.6 million (USD 433.4 million). Excluding the OMR 10.7 million contribution to net profit from the divestment of Abraaj in 2024, the decline in net profit for the first half of 2025 would have been 5.4%, largely due to increased financing costs during this period.

Operating expenses remained stable at OMR 279 million (USD 725.5 million). Capital expenditures decreased by 21% compared to the first half of 2025, reaching OMR 120.2 million (USD 312.7 million). Free cash flow also improved significantly, increasing by over 114% to OMR 175 million (USD 455 million). Return on operating capital for the first half of 2025 was 24.4%, a performance within the top quarter for the energy sector.

The company's cash balance increased by 31% to OMR 210.2 million (USD 546.6 million), compared to OMR 160.1 million (USD 416.5 million) in the first half of 2024. Net debt stood at OMR 173 million (USD 450 million) for the same period, with a debt-to-EBITDA ratio of 0.27 times EBITDA.

On a quarterly basis, the company delivered strong financial performance in the first quarter of 2025 compared to the second quarter of 2025. Revenue increased by more than 8% to OMR 222.6 million (USD 578.9 million) in the second quarter of 2025, and EBITDA grew by approximately 8% to OMR 164.7 million (USD 428.5 million), with an EBITDA margin of 74%. Net profit increased by more than 22% to OMR 91.8 million (USD 238.7 million). Total operating expenses also increased by 2.7% to OMR 141.3 million (USD 367.5 million), and capital expenditures increased by 9% to OMR 62.8 million (USD 163.3 million). Return on operating capital improved by 16.4% to 25.8%, compared to a return on operating capital of 22.2% during the first quarter of 2025.

operational performance

OQ Exploration and Production has a high-quality portfolio of 14 oil and gas exploration and production assets in the Sultanate of Oman. These assets include those in development and production, those under commercial appraisal, and those undergoing exploration programs, nine of which are in production. OQ Exploration and Production either operates these assets or acts as a partner or non-operating partner alongside one or more partners in joint ventures.

During the first half of 2025, OQ Exploration and Production launched several initiatives and signed numerous agreements to develop and expand its asset portfolio. OQ achieved 98% completion on the Basat C Expansion Project by the end of June 2025. Basat C is part of Block 60, a key asset for the company. This onshore block primarily produces oil and contributed approximately 17% of the company's total production in the first half of 2025. The Basat C Expansion commenced operations in June 2025, ahead of schedule, and will provide additional processing capacity of 37,000 barrels of oil per day and 410,000 barrels of water per day. Previously drilled and shut-in wells are now being connected to the Basat C facilities, which are expected to support approximately 10% production growth from Block 60.

In addition, OQ Exploration and Production, Oxy, and the other partners in Block 53 entered into an agreement with the Ministry of Energy and Minerals to extend the Exploration and Production Sharing Agreement for fifteen years until 2050. Block 53 is one of the company's oil assets and contributed approximately 7% of the company's production from operating interests in the first half of 2025. The partners in the agreement expect to produce an additional 800 million barrels of oil, with the improved financial terms provided by the extension agreement.

On the other hand, OQ Exploration and Production, in collaboration with Pb and other partners, updated the development plan for Block 61, which contributed approximately 40% of the company's production during the first half of 2025. The plan aims to develop additional recoverable gas resources of up to 2 trillion cubic feet to support future growth projects. Block 61 is one of the largest tight gas fields and a major new source of gas in the Sultanate of Oman. The company produces 1.5 billion cubic feet of gas per day, which is distributed through Oman's national gas network for domestic consumption. This gas also serves as feedstock for Oman LNG.

During the first half of the year, the company celebrated the groundbreaking of the Marsa LNG terminal in Sohar Governorate, which is being developed in partnership with Total Energies (20% OQ Exploration and Production and 80% Total Energies). This state-of-the-art LNG supply facility will receive natural gas from Block 10 and will feature a fully electric liquefaction plant and a solar power plant, making it one of the world’s lowest-emission LNG terminals at 3 kg of CO2 per barrel of oil. The company accelerated the pace of initial construction work during the second quarter of 2025, and the project is expected to be completed by 2028. This project will help meet the growing demand for LNG as a marine fuel, contributing to the reduction of greenhouse gas emissions in the shipping sector while simultaneously enhancing the Sultanate’s position in the global energy sector. OQ Exploration and Production plans to sell liquefied natural gas directly in international markets through its Marsa LNG plant.

In terms of exploration, the company continued to develop its growing list of international partners to mitigate risks and enhance technical expertise. OQ Exploration and Production entered into an Exploration and Production Sharing Agreement (EPSA) for Block 54 with the Ministry of Energy and Minerals and Genel Energy in March 2025. OQ Exploration and Production also entered into a Joint Operating Agreement (“JOA”) with London Stock Exchange-listed Genel Energy, headquartered in the UK, whereby OQ Exploration and Production will operate the asset and hold a 60% stake in the project, while Genel Energy will hold a 40% stake as a non-operating partner. Block 54 represents Genel Energy’s first investment in the Sultanate of Oman, a decision driven by Oman’s stable regulatory environment and the government’s investments in developing the sector. Block 54 (“Karawan Concession”) is located onshore in the eastern part of the South Oman Salt Basin, adjacent to existing production sites. The block covers an area of 5,632 square meters and has seen limited exploration activity. In the first phase of exploration, over the next three years, the two parties expect to invest up to US$25 million in total costs to conduct tests on accessible wells, drilling, and obtaining 3D seismic survey analyses.

In April 2025, OQ Exploration and Production and its Block 47 partner, Eni, announced an agreement with the Ministry of Energy and Minerals to extend Phase 1 of Block 47 for six months, effective March 24, 2025, to allow for the drilling of the Najd-1 exploration well. Block 47 comprises five well penetrations drilled by previous operators, with some promising hydrocarbon indications previously disclosed. Drilling of the Najd-1 well commenced in February 2025. Eni and OQ Exploration and Production anticipate that the project will contribute to the discovery of potentially significant gas resources. Eni and OQ Exploration and Production will also consider launching a second phase of exploration activities in the block.

Block 11, part of the gas-rich Greater Barak area in central Oman, is being evaluated with our project partners, Shell. The asset exploration program has plans to drill new appraisal wells to support the gas exploration activities carried out last year, which could potentially provide a source of energy for new projects in Oman.

In ongoing collaboration with the Ministry of Energy and Minerals and financial advisor Scotiabank, OQ Exploration and Production has assisted in marketing Blocks 18, 36, 43A, and 66 to attract new investment in Oman’s exploration and production sector. These blocks are part of 15 blocks that the Ministry of Energy and Minerals plans to market during 2025 and 2026 with continued support from OQ Exploration and Production.

During this period, the company retained its exploration assets in concession area 48.

In addition, OQ Exploration and Production and Turkish Petroleum Corporation (TPAO) entered into a cooperation agreement to explore new opportunities, and the two parties also entered into an exclusive agreement with the Ministry of Energy and Minerals to evaluate some concession areas.

Dividend Distribution and Share Buyback Program

OQ Exploration and Production’s dividend policy aims to generate sustainable cash flows for shareholders. It is projected to include a base dividend of OMR 230.7 million (USD 600 million) for 2025 and 2026, and a performance-related dividend equivalent to 90% of free cash flow, in addition to net proceeds from any potential asset divestments, excluding the base dividend. The dividend is subject to approval by the Board of Directors and shareholders based on various considerations, including current market conditions, the operating environment, and the company’s future business outlook.

OQ Exploration and Production will distribute the basic dividend for the second quarter of 2025, amounting to OMR 57.7 million (USD 150 million), to eligible shareholders in September 2025. The Board of Directors also proposed distributing the basic dividend for the third quarter of 2025, amounting to OMR 57.7 million (USD 150 million), in November 2025.

With regard to the performance-related profits for the first half of 2025, the Board of Directors proposed that eligible shareholders receive the third quarter payment of OMR 22.1 million (USD 57.45 million) in September, and the fourth quarter payment of the same value in November 2025.

Following the end of the first half of the year, OQ Exploration and Production announced its intention to launch a share buyback program of 45 to 60 million ordinary shares starting from August 9, 2025 until February 9, 2026, or until the target number of shares is acquired, with the aim of enhancing returns provided to shareholders.

Predictions

OQ Exploration and Production expects production for the whole of 2025 to reach around 220,000-230,000 barrels of oil equivalent per day; operating expenses to be below US$10 per barrel of oil equivalent; and capital expenditures to range between US$0.7 billion and US$0.9 billion.

-I finish-

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