Oil&gas Regs Regulatory News (OGDC)

28 Apr 2008 08:16

Oil and Gas Development Company Ltd28 April 2008 Islamabad 28 April 2008 HIGHLIGHTS "OGDCL ONLY" UNAUDITED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 31 MARCH, 2008-------------------------------------------------------------------------------- Oil and Gas Development Company Limited (OGDCL), (Ticker: OGDC), today announcesits financial results for the Nine months ended 31 March, 2008. FinancialStatements have been prepared in accordance with International FinancialReporting Standards. Highlights of Nine Months FY2008 include: • OGDCL's net sales increased by 18.0% to Rs 88,512 million from Rs.75,018 million for the comparable period last year, • Net profit before tax increased by 18.3% to Rs 56,702 million from Rs.47,932 million for the comparable period last year • Net profit after tax stood at Rs 36,246 million resulting in earningsper share of Rs 8.43 as against Rs 34,627 million and earning per share of Rs8.05 respectively during the comparable period last year. • Operating profit margin and net profit margin for the period under reviewwas 62% and 41% respectively. • Payable third interim dividend of Rs. 2.25 per share. • The Company spudded 15 wells out of which 5 were exploratory and madetwo hydrocarbon discoveries i.e., Moolan -1 & Pasakhi East-1. • Net crude oil production of 43,642 barrels per day, net gas productionwas 967 MMcf per day, net LPG production 368 tons per day and net sulphurproduction was 71 tons per day. • Average net realized price for natural gas sold was Rs 139.23 / Mcf,compared to Rs 145.34 / Mcf during comparable period last year. • Average net realized price of crude oil sold was US$ 64.79 / bbl asagainst US$ 53.10 / bbl during comparable period last year. 1H FY2007 1H FY2008 Nine Months Nine Months % Change FY2007 FY2008 Pkr in Millions Pkr in Millions Pkr in Millions Pkr in MillionsNet sales 49,526 56,568 75,018 88,512 18.0Profit before tax 31,660 34,738 47,932 56,702 18.3Profit after tax 23,113 24,002 34,627 36,246 4.7Earnings per share 5.37 5.58 8.05 8.43 4.7Net cash from operating 12,777 23,225 20,825 41,835 100.9activities OGDCL CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 31 MARCH, 2008-------------------------------------------------------------------------------- Oil and Gas Development Company Limited (OGDCL), (Ticker: OGDC), today announcesits financial results for the Nine months ended 31 March, 2008. FinancialStatements have been prepared in accordance with International FinancialReporting Standards. Highlights of Nine Months FY2008 include: • OGDCL's net sales increased by 18.01% to Rs 88,878 million from Rs.75,312 million for the comparable period last year, • Net profit before tax increased by 18.7% to Rs 56,858 million from Rs.47,900 million for the comparable period last year • Net profit after tax stood at Rs 36,305 million resulting in earningsper share of Rs 8.44 as against Rs 34,497 million and earning per share of Rs8.02 respectively during the comparable period last year. • Operating profit margin and net profit margin for the period under reviewwas 61% and 41% respectively. • Payable third interim dividend of Rs. 2.25 per share. • The Company spudded 15 wells out of which 5 were exploratory and madetwo discoveries during Nine Months FY2008, Moolan -1 & Pasakhi East-1. • Net crude oil production of 43,642 barrels per day, net gas productionwas 986 MMcf per day, net LPG production 368 tons per day and net sulphurproduction was 71 tons per day. • Average net realized price for natural gas sold was Rs. 137.96 / Mcfcompared to Rs. 144.13 / Mcf during comparable period last year. • Average net realized price of crude oil sold was US$ 64.79 / bbl asagainst US$ 53.10 / bbl during comparable period last year. 1H FY2007 1H FY2008 Nine Months Nine Months % Change FY2007 FY2008 Pkr in Millions Pkr in Millions Pkr in Millions Pkr in MillionsNet sales 49,676 56,822 75,312 88,878 18.01Profit before tax 31,511 34,888 47,900 56,858 18.7Profit after tax 22,925 24,093 34,497 36,305 5.2Earnings per share 5.33 5.60 8.02 8.44 5.2Net cash from operating 12,923 23,181 21,200 41,671 97.0activities Chairman's statement Commenting on OGDCL's 3rd Quarter FY2008 Financial Results, Mr. Arshad Nasar,the Chairman and CEO of OGDCL said: "It gives me great pleasure to report on another prosperous period for theGroup. The period under review was characterized by a substantial 18% growth insales and a consistent growth in oil and gas production. To continue to be ableto add to our hydrocarbon reserves base, the Group is well set on its carefullychartered path of aggressive exploration program incurring higher explorationcosts along the way which are in line with the Management's expectations. During the period under review, the Group saw an increase of 7.5% in oilproduction and 5.6% in gas production and we are all set to achieve double digitproduction growth guidance of around 10-11% on a 3-year CAGR basis. The Group'sexploratory efforts for the year till date resulted in four new discoverieswhich will add a reasonable amount of production in the near future. We are fully aware of the prevailing and ever-increasing industry cost pressuresand are keeping a very close eye on our operating costs and general andadministrative expenses. We are fortunate to have a fleet of our own drillingrigs and a pool of allied drilling services to draw resources from, which hasaided us, to a large extent, in mitigating the negative effects of the globalhike in E&P costs. I take pride in informing you that the superior performance of the Group couldnot have been achieved without the hard and intelligent work, dedication andcommitment of the human resource pool that our Group is so fortunate to possess.I am positive that the mix of material and human resources that our Group enjoyswill lead us to even higher grounds in times to come and bodes well for all ourstakeholders." - Ends - For further information:Investor Relations ContactUsman M. Bajwa Investor Relations OfficerTelephone: +92 51 920 9888Fax: +92 51 920 9858Email: usman_bajwa@ogdcl.com Notes to Editors OGDCL is the largest petroleum Exploration and Production (E&P) Group in thePakistan oil and gas sector, with a primary focus on gas. It holds the largestportfolio of the recoverable hydrocarbon reserves of Pakistan, at 34% of gas and45% of oil, respectively, as at 30th June 2007. It contributed 25% of thecountry's total natural gas production and 61.5% of its oil production inDecember 2007 on net basis. With a portfolio of 44 exploration licences, the Group has the largestexploration acreage in Pakistan, covering 33.5% of the total awarded acreage asof December 2007. While its focus to date has been on onshore exploration, theGroup has also recently begun conducting offshore exploration activities; anarea which has significant untapped potential. OGDCL had a net profit after tax of Rs 45.25 billion for the year ended June30th, 2007 and Rs 24 billion for the six months ended December 31, 2007. Board of Directors During the period under review, Mr. Irshad Ahmed Kaleemi has been appointed asDirector on Company's Board with effect from February 28, 2008 to fill vacancycreated by the sad demise of Mr. Jalaluddin Qureshi who expired on August 23,2007. We extend a warm welcome to Mr. Irshad Ahmed Kaleemi on the Company'sBoard. Summary Results During the nine months period under review, OGDCL maintained its growth andrecorded further improvement in its operating results. Its Crude Oil and Gasproduction grew by 7.5% and 5.6% respectively over corresponding period of lastyear. Production growth along with continuing high realized prices of crude oil,LPG and other refined petroleum products contributed 18% increase in Company'ssales revenue resulting into 4.7% increase in profit after tax over same periodof 2006-07. Company's exploratory efforts continued during the period andyielded two (2) gas/condensate discoveries namely Moolan-1 and Pasakhi East-1during the reported period. Subsequently, in April 2008, two more oil and gas/condensate discoveries at Moolan North-1 and Pakhro-1 were made by the Company.These newly discovered wells are located in Hyderabad district of Sindh provinceand have been tested to produce 1,150 BPD of Crude Oil, 393 BPD of Condensateand 29 MMcfd of gas. Reserves assessment of these fields is in the process ofevaluation. Financial Results During the period under review, sales revenue of the Company grew by 18% to Rs88.512 billion due to combination of increased sales volume of crude oil and gasand higher realized prices of crude oil, LPG, Sulphur and Naphtha. Sales volumeof crude oil and gas increased by 11% and 5.7% respectively which contributedincrease of Rs 5.712 billion towards sales revenue. Increase in net realizedprices of crude oil, LPG, Sulphur and Naphtha contributed Rs 10.236 billion tothe sales revenue. During the period, net realized prices of crude oil and gasaveraged at US$ 64.79/BBL and Rs 139.23/Mcf respectively as compared with US$53.10/BBL and Rs 145.34/Mcf during the corresponding period last year. High sales revenue contributed towards higher profitability of the Company, asprofit before tax increased by 18% to Rs 56.702 billion as compared to Rs 47.932billion during first nine months of last year. Profit after tax was Rs 36.246billion against Rs 34.627 billion during the same period last year. Earnings perShare (EPS) rose to Rs 8.43 compared to Rs 8.05 per share. During the period under review, net cash from operating activities after workingcapital changes and payment of income tax of Rs 13.132 billion (First ninemonths 2006-07: Rs 19.373 billion) was Rs 41.835 billion, an increase of Rs21.010 billion over the same period last year. Net cash used in investingactivities increased by Rs 1.675 billion to Rs 8.435 billion against Rs 6.759billion during the same period last year mainly due to increase of Rs 304million in fixed capital expenditure and decrease of Rs 1.221 billion oninterest and dividend income. Net cash used in payment of dividend was Rs 24.653billion as against Rs 24.130 billion resulting in net increase of Rs 523 millionin cash used in financing activities. Increase in cash flow from operatingactivities and net cash utilized in investing and financing activities resultedin net cash increase of Rs 8.748 billion to ending cash balance of Rs 26.742billion. Dividend The Board of Directors is pleased to announce a third interim dividend of 22.5%(Rs. 2.25 per share). This is in addition to two interim dividends at 37.5% (Rs3.75 per share) already declared during the year totaling to 37.50 % (Rs.3.75per share) for the year ending June 30, 2008. Exploration and Development Activities During the period under review, OGDCL continued to pursue its strategy oforganic growth through extensive exploration activities with the objective ofsecuring ever more oil and gas reserves and enhance its production bydevelopment drilling, improving operational efficiencies and ensuring timelyhook up of the newly discovered fields to Company's production stream. During first nine months of the year, OGDCL enhanced its exploration portfolioby acquiring two more exploration licenses namely Eastern Offshore Indus-A(100%) and Shaan (Block No. 3069-4). OGDCL presently holds the largest acreageposition in Pakistan and as on March 31, 2008 was operating 44 explorationblocks covering an area of 85,536.28 Sq. Kms, 29 of these exploration blocks are100% OGDCL owned whereas the remaining 15 exploration blocks are operated byOGDCL as joint venture with other companies. OGDCL is also operating in fiveoffshore blocks, namely Indus Delta-A, Indus-G, Indus-S, Indus-R and EasternOffshore Indus-A. A cross assignment agreement was executed between OGDCL and BP on February 8th,2008 whereby OGDCL agreed to transfer 50% of its working interest along with theOperatorship to BP in Offshore Block-S and an entry right of 25% workinginterest to BP in OGDCL's Offshore Block-G. In consideration, BP agreed totransfer 27.5% of its working interests in Blocks U & V each along with a 20%working interest in Block-W to OGDCL. OGDCL seismic crews and contractor crews acquired 1,312 L. Kms of 2-D and 696Sq. Kms of 3-D seismic data in various blocks during the period July 2007 toMarch 2008. The geological party of the Company deployed in Kalchas concessionin Balochistan province has completed 200 L. Kms. structural traverse, collectedmore than 500 samples for reservoir/source study. The party has completed 206.8Sq. Kms geological mapping of the concession. Eight (8) exploratory/appraisal and development wells namely Moolan N-1, KunnarS-1, Reti-1, Kunnar Deep-6, Kunnar Deep-7, Kunnar-7, Tando Alam 16-A andQadirpur-31 were spudded during third quarter bringing cumulative figure tofifteen (15) wells for the first nine months of the year. One more developmentwell Qadirpur-32 was spudded in April 2008 making a total of sixteen (16) wellsduring the current financial year. Locations for another nineteen (19) wellshave also been marked on ground including four wells at Uch and Zin. OGDCL is regularly evaluating the opportunities for overseas exploration. Inthis regard after technical evaluation, OGDCL participated in the 4th biddinground of Libya and is also planning to participate in the forthcoming biddinground of countries in West Africa (Angola and Mozambique). The Company has alsocompleted technical evaluation and exploration potential review of various othertarget countries (Mauritania, Mali, Turkey and Algeria). Production OGDCL is pursuing its strategy of enhancing its production base and maintainingsustained growth in oil and gas production. In this regard, extensivedevelopment drilling, workovers, and improvements of field operationalefficiencies are in progress. Additionally, Company has promptly completedannual turn around at our plants including Qadirpur, Uch and Dhodak. Company'soverall net production of oil and gas is in line with the targets set in thebusiness plan. Despite decrease in share of oil and gas production fromnon-operated fields and disturbances due to unfortunate incident in the lastweek of December 2007 in the southern region, Company's overall net productionof crude oil and gas increased by 3,035 BPD and 52 MMcfd respectively overcorresponding period of last year. During the third quarter and nine months ended March 31, 2008, OGDCL's averagedaily production including its share in Operated and Non Operated Joint Ventureswas as follows: First Half Third Quarter Nine Months Products UOM July-Dec Jan-Mar July -07 to Mar-08 2007 2008Crude Oil BPD 44,085 42,748 43,642 (including white Products)Gas MMscfd 963 1,034 986LPG MTD 382 340 368Sulphur MTD 68 78 71 • Daily production has been worked out at 365 days per annum. • Gas production includes subsidiary company production (19MMcfd). During the nine months period under review, crude oil production from OGDCL'sown fields and its share in operated joint venture fields increased by 13%compared with corresponding period last year mainly due to start of productionfrom Mela-1, Chanda-2, Pasakhi North East-1 and Chak-66 North East-1 in additionto increase in production from Kunnar, Bobi and Tando Alam fields. Share ofproduction from non-operated joint venture fields decreased by 15% resulting innet increase in crude oil production by 7.5% over the same period last year. OGDCL's gas production from its own fields and share in operated JV fieldsincluding production from subsidiary company increased by 9.7%. This increase ismainly due to enhanced production from Dakhni, Uch, Bobi and Qadirpur fields andstart of gas production from Mela field. Share of gas production fromnon-operated JV fields decreased by 7% resulting in net increase in Company'sgas production by 5.6% over same period last year. During the third quarter, a new well Chak 66 North East-1 was brought onextended well testing which is producing around 1,000 BOPD. In April 2008, a newwell Moolan North-1 has been connected which is contributing 1,150 BOPD. Companyexpects further enhancement in oil and gas production during the 4th quarterupon completion of on-going development wells including Mela-2 and Chanda-3. Dhodak gas/condensate field has been producing since December, 1994. It isunderlain by an active water aquifer and the reservoir drive mechanism is "Strong Water Drive". The water encroachment in the producing reservoir over thelast one year has been abnormal which has resulted in accelerated naturaldecline. Efforts are being made to mitigate this decline by drilling a well totap the deeper sands of Lower Goru Formation. Existing producers are also beingchemically treated (Polymer treatment) to check water encroachment. Future Outlook First nine months of the current financial year represent a period of improvedfinancial results and sustained production growth. The Company benefited fromenhanced oil and gas production and higher realized prices of crude oilresulting in improved financial position. Based on the operational and financialachievements in the first nine months of the year, OGDCL expects to furtherstabilize its production activities through enhancement of operationalefficiencies at its producing fields/wells by undertaking new developmentdrilling and workover jobs which will surely contribute towards more favorableoperating results. These results translated into strong financial position willhelp the Company in achieving the operational and financial targets set in thebusiness and strategic plan for the benefit of all our stakeholders. This information is provided by RNS The company news service from the London Stock Exchange