The Oil & Gas Development Corporation Limited (OGDC) held its conference call today to discuss FY20 financial results and brief about the future outlook. The company reported earnings of PKR 100Bn (EPS: PKR 23.27) in FY20 compared to PKR 118Bn (EPS: PKR 27.53) in SPLY, down 15% YoY. The company also announced a final cash dividend of PKR 2.5/sh, taking total cash dividend for FY20 to PKR 6.75/sh. 

Total revenue for the quarter stood at PKR 46.4bn, down by 33%/29% on YoY/QoQ, taking cumulative revenue for FY20 to PKR 245Bn, down 6% YoY. The decline in revenues was mainly driven by a drop in international oil prices along with lower crude oil production due to lackluster economic activities during FY20.  

The management stated that the average net realized price of oil was USD 46.76/bbl  during FY20 as against USD 58.74/bbl during the corresponding period last year. Whereas the average net realized price for natural gas was PKR 393.32/Mcf as against PKR 337.66/Mcf in SPLY.

As per the management, total oil production during FY20 was 36,073 bbls/day, down 11.6% YoY vs 40,810 bbls/day in the previous year. Gas production during the same period remained at 893 MMCFD, down 11.9% YoY compared to 1,014 MMCFD in FY19.   

OGDC spud 25 wells during FY20 which yielded 5 new discoveries compared to 16 wells spudded in FY19 which yielded 3 new discoveries. 

Operating expenses for the quarter clocked-in at PKR 20.2Bn, up 10%/28% YoY/QoQ, taking cumulative cost during FY20 to PKR 66.6Bn, up 5% YoY. In addition to this, exploration cost during the year increased by 46% YoY to PKR 18.2Bn. 

The company has planned CAPEX of PKR 55Bn for 45 wells, inclusive of 21 exploratory wells. In addition, the management expects future projects to be valued at USD 45/bbl. The company recorded an expense of PKR 10bn on account of 8 dry wells witnessed during FY20.

After the resumption of economic activities, the company has been receiving 70% of its billing amount. Moreover, OGDC has also received a payment of PKR 6.5Bn from Uch Power Limited. (BMA Capital Management Ltd)