Pakistan oil/gas production update of 9MFY24

9MFY24: Oil production up by 1% YoY; Gas production down by 3% YoY

The oil production of Pakistan witnessed an uptick of 1% YoY during 9MFY24. The production growth is contributed by Chak 2, Lashari Centre, Bolan East, and Bettani. Meanwhile, gas production depicted a 3% YoY decrease. The reduction in gas production is attributable to a decline in production from fields such as Qadirpur, Sui, Kandhkot, and Uch (due to ATA at Uch Power Limited). Every quarter, oil production of Pakistan showcased 3% YoY growth in 3QFY24, while gas production of Pakistan witnessed a decline in 2% YoY.

Drilling Activity

During 9MFY24, 11 exploratory wells and 30 appraisal/development wells were spud against a target of 21 exploratory wells and 35 appraisal/development wells.

Result Previews:

OGDC: Earnings of PKR 39.94/share expected during 9MFY24

Oil & Gas Development Company Limited (OGDC) is expected to disclose its financial result for the period of 9MFY24 on 29th Apr’24, where we project earnings to arrive at PKR 171,774mn (EPS: PKR 39.94), showcasing a growth of by 8% YoY. The growth in earnings is expected on account of i) 2% YoY increase in oil production, and ii) PKR depreciation against USD by 17% YoY, and iii) reversal of tax provisions worth PKR 28bn on the back of favourable judgement from the court, related to depletion allowance in 2QFY24. On a quarterly basis, the bottom line is projected to clock in at PKR 48,478mn (EPS: PKR 11.27) in 3QFY24 vis-à-vis PKR 64,627mn (EPS: PKR 15.03) in 3QFY23, depicting a decline of 25% YoY. The reduction in the profitability is primarily owed i) absence of exchange gain during the quarter and ii) 5% YoY fall in gas production. Whereas, oil production witnessed a jump of 5% YoY while oil prices witnessed an uptick of 1% YoY. The exploration cost is anticipated to plummet by 34% YoY, settling at PKR 2,806mn in 3QFY24 on account of absence of dry well during the quarter compared to one dry well (Bhamabra-2) report in SPLY. Additionally, we expect the company to announce a cash dividend of PKR 2.10/share (PKR 6.20/share in 9MFY24).

PPL: Bottom line to clock in at PKR 35.39/share during 9MFY24

Pakistan Petroleum Limited (PPL) is scheduled to announce financial result for 9MFY24 on 29th Apr’24. We expect the company to post net profit of PKR 96,305mn (EPS: PKR 35.39) in 9MFY24 compared to PKR 81,835mn (EPS: PKR 30.08) in 9MFY23, up by 18% YoY. The jump in earnings comes on the back of i) Pak Rupee depreciation against greenback, and ii) a hefty tax reversal in 2QFY24. On the other hand, during 3QFY24, profitability is expected to register a decline of 16% YoY, clocking in at PKR 27,528mn (EPS: PKR 10.12). The decrease in earnings is attributable to i) 6% and 5% YoY fall in oil and gas production and ii) a dip in Sui wellhead price by 7% YoY. The exploration expense is anticipated to climb up by 6% YoY in 3QFY24 amid the dry well (Maraab X-1) report during the quarter.

MARI: Profitability to arrive at PKR 430.17/share in 9MFY24

Mari Petroleum Company Limited (MARI) is expected to unveil financial result for 9MFY24 on 26th Apr’24. We project the earnings to clock in at PKR 57,386mn (EPS: PKR 430.17) in 9MFY24 against PKR 40,291mn (EPS: PKR 302.03) in 9MFY23, up by 42% YoY. The growth in profitability comes on the back of i) 16% and 18% YoY jump in gas and oil production, respectively, ii) 19% YoY hike in the wellhead price of Mari Gas Field, and iii) 17% YoY devaluation of PKR against USD. On a quarterly basis, net profit during 3QFY24 is expected to ascend by 21% YoY, to arrive at PKR 19,881mn (EPS: PKR 149.03) given i) 11% YoY higher wellhead gas price of Mari Gas Field and ii) 26% YoY growth in gas production. The exploration cost is anticipated to decline by 13% YoY, to arrive at PKR 4,294mn in 3QFY24 amid dry well (Maraab X-1) incurred during the quarter.

POL: Net profit to settle at PKR 91.60/share in 9MFY24

Pakistan Oilfields Limited (POL) is expected to announce its financial result for the period of 9MFY24 on 25th Apr’24, whereby we estimate the company to post earnings of PKR 26,002mn (EPS: PKR 91.60) in 9MFY24, down by 15% YoY. The decline in bottom-line comes amid i) 5% and 6% YoY decrease in oil and gas production, and ii) 5% YoY decline in realized average oil prices. During 3QFY24, the profitability is expected to arrive at PKR 8,423mn (EPS: PKR 29.67), plunging by 48% YoY. The reduction in earnings comes i) hefty exchange gains booked in SPLY, and ii) 2% YoY decrease in oil production. Whereas, realized oil price witnessed an uptick of 8% YoY. Moreover, we anticipate exploration costs to contract by 77% YoY due to a lower in geological and geophysical costs during the period.

 
 

Exhibit: Financial Highlights

  

9MFY24e

9MFY23a

YoY

3QFY24e

3QFY23a

YoY

QoQ

OGDC

             39.94

             37.12

8%

             11.27

             15.03

-25%

-35%

PPL

             35.39

             30.08

18%

             10.12

             12.09

-16%

-30%

MARI

           430.17

           302.03

42%

           149.03

           123.16

21%

8%

POL

             91.60

           107.76

-15%

             29.67

             57.19

-48%

7%

Source (s): Company Financials, AHL Research

 
 

Courtesy – AHL Research

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