OIL & GAS DEVELOPMENT COMPANY LIMITED
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
July 25 - 31, 2011
FINANCIAL PERFORMANCE (RUPEES Ë000)
|INDICATORS||NINE MONTHS ENDED 31ST MARCH|
|Sales - net||122,266,109||108,592,888|
|Profit before taxation||77,262,538||69,391,440|
|Profit for the period||49,184,826||42,609,379|
|Earnings per share (Rs)||11.44||9.91|
OGDCL is the national oil and gas company of Pakistan and the flagship of the country's exploration and production (E&P) sector. The company is all set to ride the wave of E&P activity, equipped with its vision and mission, business and strategic plan, a debt-free and robust balance sheet and healthy cash reserves. The company is ready to take on the challenges of a volatile E&P sector.
Presently, the company has been able to deliver stable operating performance and completed the nine months period (July 2010- March 2011) with improved financial results.
The company witnessed 12.6 per cent growth in sales revenue to Rs122.266 billion over the corresponding period of preceding year. It was because of higher realized prices of crude oil, gas, LPG and sulphur, higher sales volume of gas and favorable financial impact of Rs2.786 billion (01 January 2007 to 30 June 2010) on account of gas price revision in respect of bobi field. However, the company's sales revenue was negatively impacted due to decline in production of crude oil, LPG and white petroleum products.
During the period, net realized prices of crude oil, gas and LPG averaged at US$ 67.47/BBL, Rs215.22/mcf and Rs63,510.40/m.ton compared to US$ 60.87/BBL, Rs181.81/mcf and Rs53,295.85/m.ton respectively.
Profit before taxation for the period was Rs77.263 billion compared to Rs69.391 billion during the same period of previous year reflecting 11.3 per cent increase in the company's earning performance.
OGDC recorded profit after taxation of Rs49.185 billion compared to Rs42.609 billion resulting in increase of earnings per share (EPS) by 15.4 per cent to Rs11.44 (9M2009-10: Rs 9.91).
Cash flow from operations for the period after working capital changes and payment of income tax of Rs16.963 billion and royalty of Rs13.985 billion was Rs30.397 billion, showing a decrease of Rs17.237 billion over the same period last year.
After investment and financing activities of Rs27.234 billion (cash outflow) and Rs1.590 billion (cash inflow), the company's cash and cash equivalent increased by Rs4.754 billion with the ending balance of Rs23.591 billion as on 31 March 2011.
The company continues to pursue best practices to maintain and enhance production and keep natural decline to minimum with the application of rig-less techniques and by undertaking rig-workover jobs regularly.
During the period, annual turnaround (ATA) of plants was carried out at Chanda, Qadirpur, Dakhni and Uch fields. The company also witnessed increase in crude oil and gas production at Nashpa well after conducting choke performance test. Moreover, the company has also started producing 16 mmcf per day gas from Bahu field with effect from January 2011.
OGDC is actively working on the development of Sinjhoro and Reti/Maru wells using indigenous resources to substantially augment the production levels, leading to improvement in financial results.
The company is presently operating a total of forty five development and production leases including both owned and operated JVs.
Crude oil production during the period has been marginally lower compared with the corresponding period. Crude oil production from the company's own and operated JV fields decreased 4.9 per cent mainly due to the decline in production from Kunnar, Pasakhi, Bobi, Tando Alam and Sono on account of natural depletion of reserves and from Chanda and Mela on account of short lifting of crude oil after floods damaged road network.
The production decline was partially offset by the increase in production from Kal, Rajian and commencement of production from Naspha. Share of crude oil production from non-operated JV fields increased 5.1 per cent resulting in net decrease in crude oil production by 3.4 per cent.
PRODUCTS UOM 9M 2010-11 9M 2009-10 Crude oil Barrels/day 37,302 38,610 Gas MMcf/day 1,001 974 LPG M.Tons/day 197 206 Sulphur M.Tons/day 71 68
The electricity sector remained plagued with inter-corporate circular debt which constricted growth in the power sector as a whole and impacted oil and gas sector to some extent. Various organizations in the energy sector had Rs258.5 billion stuck up in inter-corporate circular debt till April-2011 compared to Rs103.9 billion in April 2009 indicating an increase of almost 147 per cent. Receivables amounted to Rs775.2 billion and payables stood at Rs516.7 billion. Out of Rs258.5 billion, net receivables of PSO stood at Rs51.0 billion, SSGCL Rs7.1 billion, PEPCO Rs2.7 billion, OGDCL Rs115.5 billion, PARCO Rs37.5 billion, KESC Rs27.5 billion, GHPL Rs9.6 billion and PPL Rs22.2 billion. On the other hand, SNGPL and KW&SB had net payables of Rs13.4 billion and Rs1.2 billion, respectively.
The operational achievements of the company are driven by its strategies of adding oil and gas reserves through accelerating exploration, early development of newly discovered fields and strengthening of oil and gas production base. OGDC's strategies to enhance production and reserves concentrate on to increase workovers for enhanced production from existing fields, early and expeditious production from discovered oil/gas fields, employing different secondary recovery techniques to optimize production from existing fields, and applying improved oil recovery techniques to improve recovery from the existing fields.