OGDC success ratio stood at 1:2.65, higher than the industry’s average

OGDC held its analyst briefing today to brief investors about FY23 results and future outlook:

  • Bettani was a significant milestone during the year, with the well yielding 880bpd/12.5mmcfd of oil/gas, respectively. Two additional wells, namely the appraisal of Bettani-1 and Bettani Deep, are currently in progress. Bettani field has a complex formation, the process is time consuming and incurs significant capex. Company aims to commence drilling the said wells by Dec’23, with production expected to start after 6-8 months.
  • With regards to 2D/3D seismic activities, company conducted 1.8k/0.76k sq. kms of surveys during the year, constituting total industry’s share of 55%/39%, respectively. Further, company drilled 10 wells during the outgoing period (vs. 13 wells in FY22). Company’s success ratio stood at 1:2.65, higher than industry’s average.
  • Company’s gas receipt collection ratio stood at 86% during 1QFY24. Company continues to work with Sui companies and relevant authorities in this regard. Recent gas price increase has been beneficial, and management expects improvements in cash receipts by 3QFY24.
  • Regarding low capex, the previous year’s spending remained low due to lesser drilling, primarily due to issues related to importing and letters of credit (LC). Company targets US$150mn capex for FY24, largely towards Uch and KPD-TAY projects. Company expects addition of 2k-10k bpd by next five years due to optimization efforts.
  • The recent decline in Nashpa’s production has been substantial. Company is actively pursuing additional wells, specifically Nashpa-11 and 12, along with implementing workover jobs and side-tracking activities to uphold production levels.
  • With regards to GSA of Mamikhel South’s gas towards third party, company states the pricing agreement is currently intended to remain confidential.
  • With regards to recently signed MoU of Greenfield refinery (300kbpd) with partners including PPL, PSO, GHPL and Aramco. Management stated that divulging project costs would be too early as feasibility study of the project has not been done yet. However, project financing is to be done through some mix of debt/equity.
  • Company outlined plans to advance the development of currently un-monetized assets, including Jhal Magsi and Zin block, in addition to the development of other fields.
  • Average Rig and allied equipment cost currently stands at US$35k-45k/day. 

 Courtesy – AKD Research

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