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OGDCL posts profit in sales, PAT in Q1 of this fiscal year

To improve the oil & gas reserves in Pakistan, the present government is trying to attract firms to undertake new exploration and production activities. Thus, it is predicted that the local production of oil will enhance through new wells and also with exploration of unconventional oil and gas resource in Pakistan.

Being a state-owned enterprise in the country, Oil and Gas Development Company Limited (OGDCL) is cognizant of the growing energy demands in Pakistan and in this regard is making all out attempts to optimize oil and gas production from its own and operated JV fields. In this pursuit, OGDCL during the period under review injected five new operated wells; Pakhro-1, Dachrapur-3, Chanda-4 and Qadirpur-58 & HRL-12 in the production gathering system, which cumulatively yielded gross crude oil and gas production of 4,133 barrels and 891mmcf respectively.

In the quarterly statement ended 30 September 2017, the financial managers of the company mentioned that rise in crude oil and LPG production accompanied with moderate recovery in global oil prices led OGDCL to record improvement in its top and bottom line financial consequences for the period under review. Furthermore, slight rise in the exchange rate to Rs105.58 per US$ from Rs104.87 per US$ in the same period positively influenced the financials thereby enabling the Company to register improved sales revenue of Rs43.962 billion (1Q FY 2016-17: Rs 39.566 billion).

During the period under review, overall, the company recorded profit-after-tax (PAT) of Rs17.010 billion (1Q FY 2016-17: Rs14.632 billion) translating into EPS of Rs3.95 (1Q FY 2016-17: Rs3.40). The financial managers also mentioned that the total revenue impact for OGDCL is almost Rs3.62 billion net of sales tax, which will be accounted for in the financial statements for the half year closing December 31, 2017. The experts of the company mentioned that the production testing has been carried at TAY South West-1, Bhambara-1 and Rajian-10. OGDCL’s production contributed almost 50 percent and 29 percent of the Pakistan’s total oil and natural gas production respectively during July-August 2017. OGDCL during the reporting period carried out successful work over jobs with rig at wells; Kunnar-10 and Pasakhi-7.

Furthermore to induce improvement in the present well flow parameters, pressure build-up survey jobs were completed at many wells of Kunnar, Soghri, Jakhro, Sinjhoro, Qadirpur and Dakhni fields. As part of preventive maintenance plan, Annual Turn Around (ATA) of plants were carried out at Sinjhoro, Jakhro, Chanda, Kunnar/KPD and Dakhni fields. Against the backdrop of natural decline in some of the mature producing fields, OGDCL’s average net crude oil production clocked at 42,529 barrels per day exhibiting an increase of 6percent in comparison to the corresponding period last year. Higher crude oil production is mainly observed from KPD, Sono and Nashpa fields coupled with startup of production from TAY field and increase in production share from non-operated JV fields. Regarding LPG, 73 percent production surge is witnessed owing to production commencement from KPD and TAY fields in conjunction with production increase from Sinjhoro and non-operated JV fields.

 

OGDCL’s average net saleable gas production stood at 987MMCF per day which has been affected primarily owing to natural depletion in addition to high water cut at certain wells of Qadirpur field, ATA, pressure survey jobs and delay in plant start-up activities at KPD field and less gas intake from Uch-II field – shut-in of turbines of UPL-II with effect from August 31, 2017 to September 13, 2017. Moreover, decline in production share from non operated JV fields mainly Bhit, Badhra and Miano influenced gas production. The company’s exploration acreage being the largest exploration area held by any E&P company in Pakistan covers around 32 percent of the country’s total area under exploration.

Presently, OGDCL’s exploration portfolio constitutes fifty six owned and operated joint venture exploration licenses in addition to holding working interest in five blocks operated by other E&P companies. OGDCL in an effort to explore new oil and gas reserves continued with its seismic data activities acquiring 181 sq. km of 3D and 49 Line km of 2D seismic data during the period under review. Whilst, the Company’s 3D seismic data acquisition represents 60 percent of total 3D seismic data gathered in Pakistan, overall seismic data acquisition is from exploratory blocks viz. Lakhi Rud, Pezu, Soghri and Wali. Moreover, processing/reprocessing of 699 Line km of 2D and 266 sq. km of 3D seismic data has been carried out using in-house resources.

In addition to the above, the company during the reporting period was spud two new development wells such as Mela-6 and Qadirpur HRL-14. During July-September 2017, drilling carried out at aforesaid wells aggregated to 20,360 meters. OGDCL’s exploratory endeavors to locate new hydrocarbon reserves during the period under review resulted in two new oil and gas discoveries possessing predicted cumulative daily production potential of 16mmcf of gas and 72 barrels of oil. These discoveries were witnessed at Bhambara-1 in district Sukkur and Tando Allah Yar South West-1 in district Hyderabad, Sindh province. Preliminary reserves predict attributable to discoveries is 49.16 billion cubic feet of gas and 0.22 million barrels of oil, combined 8.70 million barrels of oil equivalent. Furthermore, under Nashpa project, design phase and delivery of major equipment at site has been completed while installation and erection works are in final stage. Incremental daily production envisaged upon completion of the project in November 2017 is 1,100 barrels of oil/NGL, 10mmcf of gas and 340 tons of LPG. Soghri development project scope involves installation of gas sweetening unit and allied utilities at Dakhni site to process Soghri gas. It is also said that Soghri project upon completion in June 2018 is anticipated to render daily incremental production of 20 MMCF of gas.

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