Pakistan Oilfields’s performance and future outlook

The management of Pakistan Oilfields Limited (POL) held a Corporate Briefing session on 29th Sep’21 to discuss the company’s performance and future outlook.

Brief Takeaways

· To recall, the company posted a profit after tax (PAT) of PKR 13,382mn (EPS: PKR 47.14) in FY21 against PKR 16,376mn (EPS: PKR 57.69) in FY20, down by 18% YoY. The fall in earnings came on the back of drop in oil and gas production by 1% and 3% YoY, respectively.

· The company plans to spud four wells in FY22 which includes two exploratory wells (DGK-1 at DG Khan and Bandhak-1 at Kirthar South) two development wells (Adhi South-5 and 6 at Adhi).

· The company informed that production from Mamikhel South is on hold since Govt. is yet to determine prices, which the company expects will happen soon. The company is projects the well to be connected to the production line during FY22. Furthermore, the company forecasts oil and gas production of 4,000 bopd and 20 mmcfd, respectively, from the well.

· According to the company Joyamair’s oil reserves were same as last year but due to very low production status, the company reduced the reserves estimates.

· Regarding Jhandial the company said that the reserve estimates remain intact. The company is planning to drill another well in 6-12 months after which the company expects production from Jhandial to increase.

· The company told that it is open to all exploration possibilities in all the provinces and is currently waiting for the government to announce new leases, after which it will take decisions.

· New well Razgir in TAL Block is planned for drilling but there are certain issues, especially related to pricing, due to which drilling may not take place this year. Once the issues get resolve the company will be decide when to spud the well.

· The company told that the windfall levy is case has delayed due to the pandemic. The company expects next hearing of the case to be announced in a week or two.

· Regarding operating costs, the company explained that when it is in drilling phase 60%-70% of the costs are US Dollar denominated. If the company is not in exploration and drilling phase then most of the expenditures are in Pak Rupees.

Courtesy – AHL Research

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