Friday, 25 November 2022

OGDC: Takeaways from FY22 Analyst Briefing

Pakistan’s largest exploration and production company; Oil & Gas Development Company Limited (OGDCL), held its analyst briefing earlier, wherein the following was discussed:

The Company has posted the highest quarterly profit after tax of PKR53.3 billion (EPS: PKR12.4) for 1QFY23, higher by 145%QoQ and 58.5%YoY basis.

Major projects during the year were: Discovery in Wali block with cumulative potential of 219bcf gas and 13 million bbl oil and exploration and appraisal activities at Abu-Dhabi offshore block 5.

Other developments during the year included: company entering into a framework agreement with the Government of Pakistan, provincial government of Baluchistan, GHPL, PPL and Barrick Gold Corporation for extraction of gold and copper reserves from Reko Diq.

As per company presentation, OGDCL holds 87,300 square km of exploration coverage with total of 57/111 exploration/development licenses, respectively.

Province wise concession shares are: KPK 19%, Sindh 21%, Punjab 21% and 39% Baluchistan.

Seismic survey acquisition during the last six fiscal years was 15,380 Line km of 2D and 3,766 sq. km of 3D portraying.

OGDCL’s share in total industry stood at 80% 2D and 31%3D surveys. Finally, OGDCL’s share in gross production works out at 23%, with industry’s total production at 73,400 bpd as on June 2022.

According to management, average natural decline rate of major oil fields stands at 16% (5-year average). Although, the said decline rate has been arrested to 6-8% more recently with the help of workovers and development wells etc.

Industry’s net gas production stood at 3,390mmcfd (OGDCL share 29%) during FY22. Natural depletion rate stands at 8% for major fields (Mela, Nashpa, Kunnar Pasakhi Deep etc.), but has been arrested at 5% by the company through workovers and development wells etc.

Management stated that Reko Diq project is a stepping stone for the diversification strategy company is trying to achieve. Company is also trying to move into power and other energy projects as well.

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