ENP Newswire - 27 February 2014
Release date- 26022014 - Oil and Gas Development Company Limited, (Ticker: OGDC), today announced its financial results for the Half Year ended 31 December 2013.
Financial Statements were prepared in accordance with International Financial Reporting Standards.
Highlights of the Half Year include:
OGDCL's net sales increased to Rs 126.17 billion compared to Rs 110.63 billion in the corresponding period last year
Net Profit before Taxation increased to Rs 90.50 billion compared to Rs 74.33 billion in the corresponding period last year
Net Profit after Taxation increased to Rs 67.23 billion compared to Rs 49.31 billion in the corresponding period of preceding year translating into an Earnings per Share of Rs 15.63
Payable second interim cash dividend of Rs 2.00 per share
Operating profit margin and net profit margin were 62% and 53% respectively
Average net realized price of crude oil sold was US$ 87.45/bbl as against US$ 82.78/bbl during corresponding period last year
Average net realized price for natural gas sold was Rs 278.62/Mcf as against Rs 263.83/Mcf during corresponding period last year
962 L. Kms of 2D and 433 Sq. Kms of 3D seismic acquisition completed
Seven new wells, including two exploratory/appraisal wells namely Jakhro West-1 & Zin SML-3 and five development wells namely Qadirpur-50, 52, Kunnar Deep-9, Rajian-8 & Chak 5 Dim-2, were spudded during the period under review
Company's exploratory efforts to locate new hydrocarbon reserves yielded one (1) new oil and gas discovery at Saand-1 well in Nim concession, located in Sindh.
Net crude production of 40,215 barrels per day, net gas production of 1,136 MMcf per day, net LPG production of 148 M. Tons per day and net Sulphur production of 90 M. Tons per day was witnessed during the period under review.
MD and CEO's Statement
MD and CEO of OGDCL, Mr. Muhammad Riaz Khan, stating on the Company's half-year financial results FY 2013-14 said: 'It gives me great pleasure to inform you on our Company's continuous improved performance both operationally and financially during the period under review. OGDCL's Sales Revenue and Profit after Taxation increased to Rs 126.17 billion and Rs 67.23 billion, depicting a significant growth of 14.1% and 36.3% respectively, resulting into an increase of EPS to Rs 15.63 from Rs 11.46 over the corresponding period of last year.
OGDCL's improved financial performance is a direct result of increase in production complemented by favourable impact of the exchange rate and increase in realized prices of crude oil, gas and LPG.
In line with our robust exploration strategy of sustained volume additions from new discoveries, I am pleased to report that OGDCL made yet another discovery from our Saand-1 exploratory well located in Sindh province. In pursuit of our aggressive exploration program for the current fiscal year, the Company successfully acquired 962 line kms of 2D and 433 square kms of 3D seismic data. On the production front, OGDCL's focused efforts aimed at augmenting its hydrocarbon production from its existing and under developed fields resulted in addition of 5,200 barrels per day of oil and 100 MMcf per day of gas during the period under review.
Let me also take this opportunity to extend my sincere acknowledgement and appreciation to all employees of the Company for their continued hard work and dedication towards their job without which the above excellent performance by the Company could not have been possible. Let me assure you all, that we are fully committed to continue this trend of improved performance for the benefit of all our shareholders.'
Usman M. Bajwa
Tel: +92 51 920 9888
Fax: +92 51 920 9858
Notes to Editors
OGDCL, the largest petroleum Exploration and Production (E&P) Company in Pakistan, was listed on all three stock exchanges of the country in November 2003 and its Global Depository Shares (GDS) were issued on London Stock Exchange in December 2006. It holds the largest portfolio of recoverable hydrocarbon reserves of Pakistan, at 42% of gas and 58% of oil, respectively, as at 30 June 2013. It contributed 28% of the country's total natural gas production and 52% of its total oil production as at 31 December 2013.
With a portfolio of 40 operated exploration licences and 6 non-operated exploration licences, the Company has the largest exploration acreage in Pakistan. Currently all production volumes are being realized from onshore areas of Pakistan, however, the Company also has working interests in Pakistan's offshore exploration blocks. OGDCL had a net profit after tax of Rs 90.78 billion for the year ended 30 June 2013.
OGDCL generated strong financial results for the period July-December 2013 due to stable performance of its producing assets combined with favourable oil and gas price environment. This can be witnessed by the fact that Company's Sales Revenue and Profit after Taxation surged to Rs 126.170 billion (1H 2012-13: Rs 110.626 billion) and Rs 67.227 billion (1H 2012-13: Rs 49.308 billion), depicting a growth of 14.1% and 36.3% respectively. These improved financials translated into Earnings per Share of Rs 15.63 per share (1H 2012-13: Rs 11.46) indicating business sustainable growth and sound financial position.
OGDCL's significant improvement in first half financial performance is primarily attributable to increase in production complemented by favourable impact of the exchange rate and increase in realized prices of crude oil, gas and LPG averaging US$ 87.45/barrel, Rs 278.62/Mcf and Rs 84,927/ton respectively when compared with US$ 82.78/barrel, Rs 263.83/Mcf and Rs 78,665/ton respectively during the corresponding period of last year. Furthermore, higher other income, on account of mark-up on Privately Placed Term Finance Certificates (PPTFCs) & Pakistan Investment Bonds (PIBs), is another factor contributing towards Company's improved profitability.
However, during the reporting period, amendments to IAS 19 'Employee Benefits' became applicable resulting in the recognition of cumulative unrecognized actuarial losses on account of pension amounting to Rs 11.393 billion (net of tax) as at 30 June 2013. Effect of this change in the accounting policy has been incorporated in the Company's accounts from July 2011 by adjusting the impact of change against un-appropriated profit.
The Board has announced second interim cash dividend of Rs 2.00 per share (20 %) for the year ending 30 June 2014. This is in addition to the first interim cash dividend of Rs 2.00 per share (20%) already declared during the year.
Exploration and Development Activities
As of 31 December 2013, OGDCL held the largest exploration acreage in the Country covering an area of 51,307 square kms spreading over Company's thirty three (33) owned and operated joint venture (JV) exploration concessions. In addition, the Company holds working interest in six (6) blocks operated by other Exploration & Production companies. During the month of February 2014, the Company was granted seven more exploration licences.
OGDCL with an aim to bring potential developments into its portfolio through exploration, during the period under review, acquired 962 line kms of 2D and 433 square kms of 3D seismic data in blocks namely Mianwali, Dakhni, Nashpa, Pali, Nur-Bagla, Bitrism, Chanda, Mela and Channi Pull. In addition, the Company carried out 94 line kms of regional geological field work in Central Salt Range and also processed 1,874 line kms of 2D seismic data of various blocks using in-house resources.
During the reporting period, seven (7) wells were spud out of the twenty two (22) marked well locations. These spud wells included two (2) exploratory/appraisal wells namely Jakhro West-1 & Zin SML-3 and five (5) development wells namely Qadirpur-50, 52, Kunnar Deep-9, Rajian-8 & Chak 5 Dim-2. Subsequently, the Company spud an exploratory well Maru East-1 and development well Qadirpur-51 during the month of January 2014. Moreover, drilling and testing of seven (7) wells out of eleven (11) ongoing wells from the previous fiscal year was also carried out during the current half year.
Regarding OGDCL's strategy to boost production, efforts are being made for completion of Company's ongoing development projects including Kunnar Pasahki Deep-Tando Alah Yar, Uch-II, Sinjhoro, Jhal Magsi, Nashpa-Mela and Sara West which upon completion will lead to substantial enhancement in oil, gas & LPG production.
The first half of the year 2013-14 witnessed success across the Company's acreage with a discovery of Saand-1 exploratory well in Nim concession, Sindh province; in-house preliminary reserves estimates accredited to this discovery are 45.23 billion cubic feet of gas and 0.34 million barrels of condensate, equating to a combined 6.6 million barrels of oil equivalent (MMBOE). OGDCL's total remaining recoverable reserves as of 31 December 2013 stood at 208 million barrels of oil and 10,063.62 billion cubic feet of gas.
On the production front, OGDCL is pursuing an aggressive production enhancement strategy aimed at augmenting oil & gas production from its existing and under developed fields. In this regard, the Company, during the period under review, added 5,200 barrels per day of oil and 100 MMcf per day of gas through addition of new wells namely Nashpa-4, Qadirpur-47, 49, 50 & Qadirpur HRL-7 coupled with work-over jobs and tie-in of Uch-21, 25, 28 & 31. Moreover, development/appraisal wells; Zin SML-2, Zin SML-3, Sara West-4 & Rajian-7 have also been successfully completed.
During July-December 2013, OGDCL carried out perforation/re-perforation and Bottom Hole Pressure (BHP) survey jobs for revival of production at a number of wells in Tando-Alam, Thora, Moolan North, Nim West, Kunnar and Pasahki fields. In addition, the Company with an aim to update reservoir study and induce improvement in current well flow parameters carried out pressure survey campaigns at number of wells at Qadirpur, Nashpa, Chanda, Mela, Dakhni, Tando-Alam & Sinjhoro fields and via OGDCL slick line unit at Uch-II.
Furthermore, Annual Turn Around (ATA) at Chanda plant was also undertaken to improve the operational efficiency while a new technology, Duracaps Scale Inhibitors, were injected in Pasahki-1, 5 & 6, Tando Alam-3, 16-A, 19 & 20 and Thora-1 & 4 wells to help uninterrupted oil production.
Apart from the above, OGDCL commissioned Jakhro Gas Condensate field in the month of October 2013 resulting in additional production of 238 barrels per day of oil and 6 MMcf per day of gas. Also, development activities have been completed at Reti-Maru gas field and the Company is currently supplying around 12 MMcf per day of gas to M/s Engro Fertilizer Limited from this field.
It is pertinent to mention here that OGDCL witnessed overall improved production despite the curtailment of production from Mela field due to Mela-1 well, frequent problems at Qadirpur & Dakhni plants and less gas intake by M/s Liberty Power (LPL) & Engro Energy Limited (EEL). Company's net gas production augmented by 5.9% primarily on account of increase in production from Uch, Nandpur/Punjpir, Nashpa, & Kunnar fields in conjunction with start-up of production from Sinjhoro & Jakhro fields while net crude oil production increased by 2.5% owing to commencement of production from Nashpa-4 and Sinjhoro & Jakhro fields accompanied by increase in share of crude oil production from non-operated JV fields.
In view of OGDCL's stable production profile and financial strength to undertake new development activities and projects, the Company is well placed to realize numerous growth opportunities in the years to come.