According to a PSX notice by Pakistan Oilfields Ltd (POL), MOL has made another discovery in Tal block, Mamikhel South-01, which is the first successful exploratory well in Tal since Makori Deep in June 2016.

Oil & Gas Development Co. (OGDC) and Pakistan Petroleum Ltd (PPL) both have c.28% stake in the block, while POL has c.21% stake. MOL is the operator with c.8% stake.

This is the 10th discovery in Tal block, in which the first discovery was made in December 2002 (Manzalai).

Initial flows from the well are reported to be 3,240bpd of crude oil and 16.12mmcfd of gas at a choke size of 32/64″ (optimal level). This is about 15% and 5% of Tal block’s present total oil and gas production respectively (c.22,000bpd oil and c.330mmcfd gas from eight fields as of July 2020).

Actual flows from the well can be materially different from the above levels. The gas is wet, meaning it can be processed into LPG.

The last discovery in Tal block – Makori Deep – was found in June 2016 and was added to production by July 2017 (a year later). Based on management guidance, Mamikhel South will likely be added to production in a shorter time period. Given the discovery’s proximity to another field, Mamikhel, it will likely be connected to the Makori Gas Processing Facility (MGPF).

This discovery is material, and it comes at a time when overall hydrocarbon production in Pakistan is on a decline, and reserve replacement has been paltry of late. The find is especially crucial to POL, for which it can increment up to 10% of its present oil production (6,500bpd as of July 2020). Therefore, the EPS impact for POL is more material than in case of OGDC and PPL. (Intermarket Securities Limited.)