OQEP’s New Share Buyback Plan: Boosting Shareholder Value and What It Means for Investors in Oman

• By CONRAD PRABHU
• July 24, 2025July 24, 2025
• oil and gas OQEP share buyback
• With 0 comments

MUSCAT: OQ Exploration & Production SAOG (OQEP), the majority state-owned upstream energy subsidiary of OQ Group, has announced a strategic plan to repurchase between 45 and 60 million of its shares listed on the Muscat Stock Exchange (MSX). This move highlights the company’s strong financial position and confidence in its long-term market value.

The announcement, made in a filing to the MSX on July 24, 2025, stated that the proposed buyback period will extend from August 9, 2025, to February 9, 2026, or until the targeted number of shares is acquired. The repurchase price will be determined based on prevailing market trends.

Jaber bin Rashid Al Naamani, Chief Financial Officer of OQEP, described the buyback as a strategic initiative aimed at reinforcing positive market momentum and boosting shareholder confidence in the company’s stock and operational performance. He added that the buyback is expected to positively influence the share price and market perception while providing greater flexibility in capital management and enhancing shareholder returns. According to him, this initiative empowers the company to bolster market confidence and deliver long-term value to shareholders.

Market analysts noted that although the buyback represents a modest 0.6–0.8% of the company’s total outstanding shares, it is expected to support key financial metrics such as Earnings Per Share (EPS), Return on Equity (ROE), and other valuation indicators. The programme also signals management’s belief that the current trading price, approximately RO 0.35 per share, is attractive relative to the company’s internal valuation.

The share repurchase announcement follows OQEP’s solid first-quarter 2025 earnings report. The company recorded revenues of RO 205.5 million, slightly down from RO 209.5 million during the same period last year. Gross profit stood at RO 75.5 million, compared to RO 78.8 million in Q1 2024. Despite these slight declines, EBITDA increased marginally to RO 152.7 million from RO 151.1 million a year earlier. Net profit for Q1 2025 was RO 74.9 million, down from RO 82.2 million in Q1 2024.

Excluding results from the discontinued operation, Abraj Energy Services SAOG, net profit remained steady at RO 74.9 million, despite increased financing costs due to refinancing a subordinated loan with two new credit facilities totaling USD 1 billion. Return on Capital Employed (ROCE) improved to 22%, while capital expenditures were reduced to RO 57.4 million compared to Q1 2024. Adjusted cash flow from operations, excluding working capital changes, was RO 141.8 million.

OQEP has reaffirmed its commitment to shareholder value, with planned dividend distributions totaling RO 230.7 million (USD 600 million) across 2025 and 2026, including both base and performance-linked dividends.

As Oman’s largest pure-play oil and gas exploration and production company, OQEP oversees a high-quality portfolio of 15 upstream oil and gas assets across the Sultanate. These assets include those in development, production, appraisal, and exploration phases, with nine currently producing. OQEP operates these assets either directly, as a joint venture partner, or as a non-operator. By the end of Q1 2025, the company’s oil and gas production averaged 221,200 barrels of oil equivalent per day (boepd).

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OQEP’s planned share buyback signals strong financial health and management confidence in its long-term value, presenting a potential upside for investors through enhanced share price stability and improved key financial metrics. For businesses and entrepreneurs, this move underscores a resilient energy sector with promising capital returns, suggesting opportunities in upstream oil and gas ventures amid steady production and strategic capital management. Smart investors should consider OQEP’s solid dividend plans and operational efficiency as indicators of reliable returns in a stable yet evolving market environment in Oman.