Monday 23 September 2024

Pakistan: OGDC performance in FY24

Pakistan’s leading exploration player, Oil & Gas Development Company (OGDC) held its analyst briefing where in the management discussed the recently announced FY24 financial results with equity analysts.

Net sales of the company for the year under review rose to PKR463.7 billion, up 12%YoY, mainly due to higher wellhead prices. The average realized prices for crude oil slipped to US$68.7/bbl, down 4.3%YoY, while realized gas prices rose to PKR712.9/mmbtu, up 17%YoY.

Production activity during the year was reported at 33,100 bpd of crude oil (up 2%YoY), 717mmcfd of gas (down 6.1%YoY) and 717tpd of LPG (down 0.4%YoY), respectively.

Forced curtailments by SNGP and reduced intake by power companies led to fall in oil and gas output during the year.

Production was notably impacted in aging fields including Nashpa, Chanda, Dhok Hussain, and Uch, with output declining by 138,500 barrels of oil and 19,600 mmcf of gas, respectively.

Company operated in 54 Exploration Blocks (22 blocks with full ownership and 32 blocks as operated JVs), covering an area of 99.3k sq. km as at June end 2024.

On the drilling front, company spud 13 wells, with seven being exploratory and six developmental. This resulted in five discoveries during the year: Chak 214-1, Dars West-2, Kharo-01, Togh-2 and Nur West-1 (tight gas well), with combined daily production of 481 bpd of oil and 28mmcfd of gas, respectively.

With regards to 2D/3D seismic activities, company conducted 1,236/1,201 sq. kms of surveys during FY24.

Jhal Magsi development project has received approval for marginal gas pricing by the ECC. Significant construction milestones have been achieved, with commissioning expected during the current month.

Uch (requirement under GSA with UPL) and KPD-TAY (+100mmcfd) compression projects are presently in the detailed engineering phase, with completion expected by March 2026.

Opex were up 32%YoY during the year, with the primary reason being the lease expiry of three major fields. This led to additional payments to the GoP in form of an incremental charge of 15% of wellhead value.

Company's contract expenses were notably higher during the period, driven by various production optimization studies conducted across multiple fields.

Additionally, operations in sensitive areas resulted in increased security expenses as well.

Company also recognized PKR23 billion in impairment charges related to interest receivables from GoP’s TFCs.

Regarding the expected production profile and reserve size of the Abu Dhabi Block, management noted that the block is still in the appraisal stages. Regarding company's share in production, management stated that discussions with ‘ADNOC' are ongoing.

AKD Securities maintains its 'BUY' stance on the stock with a June 2025 target price of PKR180/ share, alongside a DY of 10% for FY25.

  

 

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