Oil&gas Regs Regulatory News (OGDC)

26 Apr 2007 10:08

Oil & Gas Development Company Ltd26 April 2007 Islamabad 26 April 2007 FOR IMMEDIATE RELEASE OGDCL ANNOUNCES UNAUDITED CONSOLIDATED NINE MONTHS RESULTS TO 31 MARCH, 2007 Oil and Gas Development Company Limited (OGDCL), (Ticker: OGDC), today announcedits un-audited consolidated financial results for the nine months ended 31March, 2007. Financial Statements have been prepared in accordance withInternational Financial Reporting Standards. Summary financial results Q3 2006 Q3 2007 % Change Nine Months Nine Months % Rupees Rupees 2006 2007 Change '000 '000 Rupees Rupees '000 '000 Average BOE price 1.418 1.243 (12.3) 1.249 1.321 5.8Net sales 27,371,241 25,635,955 (6.3) 70,486,562 75,312,339 6.8Profit before tax 19,161,078 16,389,312 (14.5) 48,255,159 47,900,103 (0.7)Profit after tax 12,945,597 11,571,324 (10.6) 32,966,307 34,496,684 4.6Earnings per share 3.01 2.69 (10.6) 7.66 8.02 4.7 Summary production results First Half Third Quarter Nine Months Products UOM July-Dec Jan-Mar July -06 to Mar-07 2006 2007 Crude Oil Barrels/day 39,578 42,711 40,607(including white products)Gas MMcf/day 894 1,017 934LPG Tons/day 366 427 386Sulphur Tons/day 61 73 65 Daily production has been worked out at 365 days per annum. Gas production includes subsidiary company production. Q3 to 31 March, 2007 highlights: • Sales revenue of Rs 25.636 billion, decreased by 6.3% over the same period last year, mainly due to decline in oil and gas prices despite slight increase in oil and gas sales volume. • Net realized prices of crude oil and gas averaged US$ 49.22/bbl and Rs 139.64/Mcf respectively • Profit after tax stands at Rs. 11.571 billion compared with Rs 12.946 billion in the comparable period of last year • Earnings per share of Rs 2.69 verses Rs 3.01 in the previous year • Additional dividend of Rs 2.00 per share, giving total for the year so far of Rs 5.50 per share • Two more exploration licenses acquired: Indus Offshore-S and Guddu covering an area of 2,129.91 and 2,093.40 Sq. Kms respectively • 562 L.Kms of 2-D and 187 Sq. Kms of 3-D seismic acquired • Three exploratory / appraisal and one development well spudded • The Company is on course to achieve its target of 41 wells for the full year 2006-07 Nine Months to 31 March, 2007 highlights: • OGDCL's net sales increased by 6.8% to Rs 75.312 billion from Rs 70.487 billion for the same period last year. • Net profit before tax stands at Rs 47.900 billion compared with Rs 48.255 billion during same period last year. • Net profit after tax increased to Rs 34.497 billion, resulting in a 4.6% increase in earnings per share to Rs 8.02. • Operating and net profit margins stand at 59% and 46% respectively. • Total dividend declared to date of Rs 5.50 per share. • Net crude oil production increased 4.9% to 40,607 barrels per day, net gas production fell 1.6% to 934 MMcf per day, net LPG production increased 7.7% to 386 tons per day and net sulphur production was 65 tons per day. • Average net realized price of crude oil sold was US$ 53.10/bbl, 7.9% increase on the same period last year. • Average net realized price for natural gas sold was Rs 144.13/ Mcf, 0.6% decrease on the same period last year. • 2,513 km of 2D and 412 km of 3D seismic acquired. • 19 wells spudded. • Four discoveries made during the nine month period at Mela-1, Pasakhi North East-1, Nim West-1, Unar-1 , will increase daily production by 6,055 barrels of oil and 32 MMCF of gas. • Following the end of the period, in April 2007, further discoveries were made at Chak-66-North East-1, Dhachrapur-1, Dakhni Deep-1 and Kunnar West-1A, will increase daily production by 2,030 barrels of oil/condensate and 35 MMcf of gas. Chairman's statement Commenting on OGDCL's third quarter results, the Chairman and CEO of OGDCL, Mr.Arshad Nasar, said: "OGDCL's net sales for the period decreased by 6.3% to Rs 25.636 billion,mainly due to decline in oil and gas prices despite slight increase in oil andgas sales volume. "The company has continued to deliver a healthy operational performance in thethird quarter of the fiscal year 06/07, recording strong growth in productionacross all products and outstripping production levels achieved during the firsthalf of the current year. "On a comparative quarterly basis, we increased oil and gas production volumesby 7% and 1.6% respectively, reaffirming the positive progress being made towardthe achievement of our three year CAGR target. On the back of a strong financialperformance, the company expects to further enhance production activity byundertaking workover jobs and increasing our drilling rate over the comingquarter. "Pursuing our strategy of extensive exploration, OGDCL further expanded itsexploration acreage during the quarter through the acquisition of two additionalexploration licenses. The company remains focused on undertaking an aggressiveexploration and development program, that will deliver sustainable and enhancedproduction growth and a strong future for our company". - Ends - For further information: Investor Relations Contacts Usman BajwaInvestor 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, or E&P, company inthe Pakistan oil and gas sector, with a primary focus on gas. With a portfolio of 42 exploration licences, the Company has the largestexploration acreage (80,128.76 Sq. Kms) in Pakistan. This includes twoexploration licences namely Guddu and Indus offshore-S granted to the Company inFebruary and March 2007. While its focus to date has been on onshore exploration, the Company has alsorecently begun conducting offshore exploration activities; an area which theCompany believes has significant untapped potential. OGDCL had a net profit after tax of Rs 34.497 billion for the nine months ended31 March, 2007. Summary Results During the third quarter, Company's sales revenue and profit after tax decreasedby 6.3% and 10.6% respectively. Despite slight increase in sales volume of oiland gas, sales revenue decreased by Rs 1.735 billion mainly due to decline ingas prices which averaged Rs 139.64 / Mcf during the third quarter compared withRs 176.39/Mcf in the same period last year. Increase of 14.2% in operatingexpenses and higher exploration and prospecting write-offs contributed towardsdecrease in profit after tax by Rs 1.374 billion resulting EPS of Rs 2.69against Rs 3.01 during comparable period of last year. Nine months sales revenue increased by Rs 4.826 billion to Rs 75.312 billionrepresenting growth of 6.8% compared to the same period last year. This increasewas mainly driven by higher crude oil and LPG prices in addition to a slightincrease in sales volume of oil and LPG. Net realized prices of crude oil andgas averaged US$ 53.10/bbl and Rs 144.13/Mcf respectively over the nine monthperiod. Growth in sales revenue was partly off set by higher costs relating to anincrease in exploration and prospecting activity. This resulted in 4.6% growthin profit after tax to Rs 34.497 billion and earnings per share of Rs 8.02compared with Rs 7.66 in the corresponding nine month period last year. Operating expenses were 17.2% higher at Rs 12.580 billion compared with Rs10.734 billion during the corresponding period last year. This was mainly due toprovision of Rs 700 million made on account of charges related to minimumsupply of gas to Uch Power Linited. Exploration and prospecting expenditure increased by Rs 2.615 billion, due to ahigher exploration charge reflective of increased drilling activity andincreased seismic acquisition activity. The company expects its productiongrowth to improve further in the near and medium term as a result of theseactivities. Dividend The Board of Directors is delighted to announce a third interim dividend of Rs2.00 per share. This is in addition to two interim dividends of Rs 3.50 pershare already declared for the year totaling (Rs 5.50 per share) for the yearending June 30, 2007. Discoveries Four more crude oil/condensate and gas discoveries namely Chak-66 North East-1,Dhachrapur-1, Dakhni Deep-1 and Kunnar West-1A have been made by OGDCL in April2007. These are in addition to four oil, gas and gas/condensate discoveriesalready made at Mela-1, Pasakhi North East-1, Nim West-1 and Unar-1 during thefirst half of the current financial year. These eight discoveries have beentested to produce 8,085 barrels per day of oil / condensate and 67 MMcfd of gas.The company's oil and gas production will be enhanced accordingly uponcompletion of development work at these new fields. Production In pursuing its strategy of enhancing its production base, the Company is ontarget to achieve its CAGR targets of 13% for gas production and 14% for oilproduction for the three years ending June 2009. The period under review hasshown growth in production across all products compared with production duringfirst half of the year. This increase resulted due to improved operationalefficiencies at fields / wells, through prompt completion of annual turn aroundwork and work over jobs. The company expects sizeable enhancement in oil and gasproduction from Mela-1 after the completion of on going development work andinstallation of early production facilities by the end of current financialyear. OGDCL's daily production, including its share from operated and non-operatedjoint ventures, was as follows: Jan - Mar 2006 Jan - Mar 2007 Crude oil 39,899 Barrels / day 42,711 Barrels/day Gas 1,001 MMcf / day 1,017 MMcf/day LPG 389 Tons / day 427 Tons/day Sulphur 66 Tons / day 73 Tons/day Daily production has been worked out at 365 days / year. Gas production includessubsidiary company production The commencement of production at Chanda-2, Sono-8 and Pasakhi North East-1 inthe early part of the year has increased crude oil production compared with sameperiod last year. The Company remains determined to achieve further operational efficienciesacross fields / wells, through regular maintenance and repair. Three moreworkover jobs have been completed during the third quarter making cumulativefigures of eleven workover jobs during nine months ended March 31, 2007. Annualroutine maintenance of Uch, Qadirpur, Dakhni and Bobi fields was also completedduring nine months period. OGDCL accelerated production at Qadirpur, following a major workover at theplant. As a result, a further 100mmcfd of extra production is expected to comeon stream from this site in 2008 to meet demand from a new fertiliser plantbeing constructed by Engro, Pakistan's premier fertilizer manufacturer. Aresolution to the Qadirpur pricing question remains unresolved and furtherdiscussions with the Regulator are ongoing. Some delay is expected to the development of the Tando Allah Yar (TAY) andSinjhoro fields due to litigation. This will push back the expected date thatthese fields will enter production from 2008 to the 2009 financial year. Plannedcapex will therefore be lower for the 2006/7 financial year reflecting therevised development schedule. In the near-term, this delay will be offset by therecent new discoveries expected to be online before year-end. Exploration and Development Activities OGDCL is playing a leading role in developing oil and gas resources in Pakistan.The basic objective of the company is to accelerate its exploration and drillingactivities to meet its commitments of exploitation, development and productionof national oil and gas resources. Pursuing its strategy of extensive exploration, OGDCL has further enhanced itsexploration portfolio by acquiring two more exploration licenses, namely IndusOffshore-S and Guddu, covering an area of 2,129.91 and 2,093.40 Sq. kmsrespectively. Presently, OGDCL operates 42 exploration concessions covering anarea of 80,128.76 Sq. kms. During the third quarter, OGDCL has carried out 562 L.kms of 2-D and 187 Sq. kmsof 3-D seismic acquisition resulting in cumulative figures for the first ninemonths of 2,513 L. kms of 2-D and 412 Sq. kms of 3-D seismic survey. Three exploratory / appraisal and one development well were spudded during thethird quarter bringing cumulative figures to a total of 14 exploratory /appraisal wells and 5 development wells, for the first nine months of the year.These wells are currently being drilled and upon completion will contribute tothis year's production targets. OGDCL remains on course to achieve its target of41 wells for the full year 2006/07. We have contracted 6 new rigs and majorityof the rigs currently deployed will be available to spud the remaining wells toreach the target of 41 wells by end June 2007. Besides expanding its onshore activities, OGDCL continued to look at ways ofexploring and developing its offshore acreage to augment its oil and gasreserves. Progress in this respect has been achieved by making a joint venturebetween OGDCL and Petrobras to explore offshore Block-G. A production sharingagreement has also been executed with GHPL over offshore block Indus-S. Outlook The company remains on track to commence offshore drilling of Indus E Blockbefore the end of the financial year 06/07, in a joint venture operation withShell. Development of the Tando Allah Yar (TAY) and Sinjhoro fields haveincurred delays during the quarter, and planned capex will therefore be lowerfor the current financial year. The Company expects its production growth to improve further in the near andmedium term due to an acceleration of development and exploration activities.These activities are reflected in the company's exploration, drilling anddevelopment efforts. Based on operational and financial achievements for the nine month period, OGDCLexpects to further enhance production through operational efficiencies at itsproducing fields/wells, undertaking workover jobs and the drilling of newdevelopment wells. Production growth is expected to generate strong operatingcash flow which will contribute to the achievement of operational targets. OIL AND GAS DEVELOPMENT COMPANY LIMITEDCONSOLIDATED BALANCE SHEET (UN-AUDITED)AS AT MARCH 31, 2007 Un-audited Audited Un-audited Audited March 31 June 30, March 31 June 30, Note 2007 2006 Note 2007 2006 (Rupees '000) (Rupees '000) SHARE CAPITAL AND RESERVES NON CURRENT ASSETS Property, plant and 7 20,498,125 20,096,218 equipment Share capital 3 43,009,284 43,009,284 Development and 8 25,806,959 22,651,837 production assets Exploration and 9 3,554,763 2,551,149 evaluation assets-intangible Capital reserve 4 3,221,682 3,055,027 Stores held for capital 825,169 677,441 expenditure 50,685,016 45,976,645 Un-appropriated profit 58,548,841 55,400,544 Long term investments 10 2,504,537 2,373,330 104,779,807 101,464,855 Long term loans and 1,372,354 2,154,705 receivables Long term prepayments 38,653 58,022NON CURRENT LIABILITIES 54,600,560 50,562,702 CURRENT ASSETS Deferred liabilities Stores, spares and loose 17,968,113 13,214,614 tools Taxation 11,067,616 10,195,201 Stock in trade 73,864 65,608 Employee benefits 1,513,143 1,420,245 Trade debts 11 33,958,754 24,500,791 Provision for 5,703,581 5,036,478 Loans and advances 2,390,666 2,152,141 decommissioning cost 18,284,340 16,651,924 Deposits and prepayments 317,585 305,636CURRENT LIABILITIES Interest accrued 349,407 556,018 Trade and other payables 5 17,954,417 7,269,645 Other receivables 211,514 239,229 Provision for taxation - 3,824,189 Advance tax 3,060,306 - 17,954,417 11,093,834 Short term investments 21,506,443 36,209,932 Cash and bank balances 6,581,352 1,403,942CONTINGENCIES AND COMMITMENTS 6 - - 86,418,004 78,647,911 141,018,564 129,210,613 141,018,564 129,210,613 The annexed notes from 1 to 16 form an integral part of these financial statements. Chairman and Chief Executive Director OIL AND GAS DEVELOPMENT COMPANY LIMITEDCONSOLIDATED PROFIT AND LOSS ACCOUNT (UN-AUDITED)FOR NINE MONTHS ENDED MARCH 31, 2007 Quarter ended March 31, Nine months ended March 31, 2007 2006 2007 2006 Note (Rupees '000)Net sales 12 25,635,955 27,371,241 75,312,339 70,486,562Royalty 2,761,530 3,041,286 8,238,538 7,865,843 22,874,425 24,329,955 67,073,801 62,620,719Operating expenses 13 4,387,374 3,842,546 12,579,957 10,734,178Exploration and prospecting expenditure 1,337,555 746,087 5,202,339 2,587,115Transportation charges 301,075 288,803 813,035 751,055 6,026,004 4,877,436 18,595,331 14,072,348 16,848,421 19,452,519 48,478,470 48,548,371 General and administration expenses 314,693 320,462 775,979 798,235Finance cost 130,487 1,677 392,797 5,273Workers' Profit Participation Fund 862,878 1,008,834 2,533,713 2,559,377 1,308,058 1,330,973 3,702,489 3,362,885 15,540,363 18,121,546 44,775,981 45,185,486Other income 838,161 1,046,292 3,090,248 3,066,464Share of profit in associated company 10,788 (6,760) 33,874 3,209PROFIT BEFORE TAXATION 16,389,312 19,161,078 47,900,103 48,255,159Provision for taxation 4,817,988 6,215,481 13,403,419 15,288,852PROFIT AFTER TAXATION 11,571,324 12,945,597 34,496,684 32,966,307 Earnings per share - basic and diluted (Rupees) 14 2.69 3.01 8.02 7.66 The annexed notes from 1 to 16 form an integral part of these financial statements. Chairman and Chief Executive Director OIL AND GAS DEVELOPMENT COMPANY LIMITEDCONSOLIDATED CASH FLOW STATEMENT (UN-AUDITED)FOR NINE MONTHS ENDED MARCH 31, 2007 Nine months ended March 31, 2007 2006Cash flows from operating activities (Rupees '000)Profit before taxation 47,900,103 48,255,159Adjustments for: Depreciation 2,363,640 2,353,465 Amortization of development and production assets 2,833,298 2,401,776 Royalty 8,238,538 7,865,843 Workers' Profit Participation Fund 2,533,713 2,559,377 Provision for employees' benefits 339,276 330,789 Interest income (2,850,716) (2,614,078) Un-realized (gain)/loss on investments at fair value through profit or loss (2,270) (56,030) Un-winding of discount factor - provision for decommissioning cost 388,762 - Profit on disposal of property, plant and equipment (22,744) (13,006) Dividend received from NIT units (26,334) (22,770) Interest income on long term receivables (97,026) (82,534) Share of profit in associated company (33,874) (3,209) 61,564,366 60,974,782Working capital changes (Increase)/decrease in current assets Stock in trade and stores, spares and loose tools (4,761,755) (2,364,507) Trade debts (9,457,963) (9,737,064) Deposits and prepayments (11,949) 2,443 Loans, advances and other receivables 636,534 867,562Increase/(decrease) in current liabilities: Trade and other payables (218,614) 216,692Cash generated from operations 47,750,619 49,959,908 Royalty paid (6,920,613) (7,132,186) Employees' benefits paid (246,378) (1,249,123) Received from Workers' Profit Participation Fund 31,949 121,051 Taxes paid (19,415,498) (10,876,669) (26,550,540) (19,136,927) Net cash from operating activities 21,200,079 30,822,981 Cash flows from investing activities Fixed capital expenditure (9,629,125) (6,878,923) Interest received 3,145,409 2,228,538 Dividend received 49,854 22,770 Purchase of investments (250,000) (198,000) Proceeds from encashment of investments 41,065 (46,860) Proceeds from disposal of property, plant and equipment 24,901 13,882 Long term prepayments 19,369 (35,010) Net cash used in investing activities (6,598,527) (4,893,603) Cash flows from financing activities Dividend paid (24,129,901) (24,729,349) Net cash used in financing activities (24,129,901) (24,729,349) Increase/(decrease) in cash and cash equivalents (9,528,349) 1,200,029Cash and cash equivalents at beginning of the period 37,394,351 42,379,876Cash and cash equivalents at end of the period 27,866,002 43,579,905 The annexed notes from 1 to 16 form an integral part of these financial statements.Chairman and Chief Executive Director OIL AND GAS DEVELOPMENT COMPANY LIMITEDCONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR NINE MONTHS ENDED MARCH 31, 2007 Share Capital reserve Unappropriated capital Bonus shares Contingency profit Total (Rupees '000)Balance as at June 30, 2005, as previouslystated 43,009,284 836,000 1,995,996 44,475,756 90,317,036Effect of discounting long term receivable (248,151) (248,151)Balance as at June 30, 2005, as restated 43,009,284 836,000 1,995,996 44,227,605 90,068,885Profit for nine months ended March 31, 2006 - - - 32,966,307 32,966,307Transfer to contingency reserve - - 298,292 (298,292) -Final dividend 2005 (Rs 2.75 per share) - - - (11,827,553) (11,827,553)First interim dividend 2006 (Rs 1.25 pershare) - - - (5,376,161) (5,376,161)Second interim dividend 2006 (Rs 1.75 pershare) - - - (7,526,625) (7,526,625)Balance as at March 31, 2006 43,009,284 836,000 2,294,288 52,165,281 98,304,853Profit for the qurter ended June 30, 2006 - - - 12,837,091 12,837,091Transfer to contingency reserve - - (75,261) 75,261 -Third interim dividend 2006 (Rs 2.25 pershare) - - - (9,677,089) (9,677,089)Balance as at June 30, 2006 43,009,284 836,000 2,219,027 55,400,544 101,464,855 Balance as at June 30, 2006 43,009,284 836,000 2,219,027 55,400,544 101,464,855Profit for nine months ended March 31, 2007 - - - 34,496,684 34,496,684Transfer to contingency reserve - - 166,655 (166,655) -Final dividend 2006 (Rs 3.75 per share) - - - (16,128,482) (16,128,482)First interim dividend 2007 (Rs 1.75 pershare) - - - (7,526,625) (7,526,625)Second interim dividend 2007 (Rs 1.75 pershare) (7,526,625) (7,526,625)Balance as at March 31, 2007 43,009,284 836,000 2,385,682 58,548,841 104,779,807 The annexed notes from 1 to 16 form an integral part of these financialstatements. Chairman and Chief Executive Director OIL AND GAS DEVELOPMENT COMPANY LIMITEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UN-AUDITED)FOR NINE MONTHS ENDED MARCH 31, 2007 1 LEGAL STATUS AND OPERATIONS Oil and Gas Development Company Limited (OGDCL), "the Parent Company", was incorporated on October 23, 1997 under the Companies Ordinance, 1984. The Parent Company is deemed to own all the properties, rights, assets, obligations and liabilities of Oil and Gas Development Corporation (OGDC) as on that date. The Parent Company is engaged in the exploration and development of oil and gas resources, including production and sale of oil and gas and related activities. The Parent Company is listed on all the three stock exchanges of Pakistan. Government of Pakistan (GoP) divested 214,091,139 shares being 4.98% of its shareholding in October 2003 through an Initial Public Offering. In December 2006, GoP further divested 408,588,000 shares being 9.5% of its shareholding through secondary offering in the form of Global Depository Shares (1 GDS = 10 ordinary shares of the Parent Company) to international institutional investors including an offering of GDSs to certain qualified institutional buyers in the United States under Rule 144A of the Securities Act and secondary offering of shares to local institutional investors. GDSs are listed on the London Stock Exchange. In addition, GoP also divested 21,505,000 shares being 0.50% of its shareholding to the general public in February 2007. Accordingly, GoP owns 85.02% of the shares of the Parent Company as of March 31, 2007. The Parent Company has a wholly owned subsidiary namely Pirkoh Gas Company (Private) Limited ("the Subsidiary Company"). The Subsidiary Company was incorporated in 1982 as a private limited company under the Companies Ordinance,1984. It is engaged in the exploration and development of natural gas resources, including production and sale of natural gas and related activities. The Board of Directors of the Subsidiary Company in consultation with the Privatization Commission of Pakistan has, in principle, approved the merger of the Subsidiary with the Parent Company. The registered offices of both the Parent and the Subsidiary Companies, together constituting "the Group", are located at OGDCL House, Plot No. 3, F-6/G-6, Blue Area, Islamabad, Pakistan. 2 BASIS OF PREPARATION These financial statements are un-audited and are being submitted to shareholders as required under section 245 of the Companies Ordinance, 1984 and have been prepared in accordance with the requirements of International Accounting Standard 34 "Interim Financial Reporting". The accounting policies adopted for the preparation of these financial statements are the same as those applied in preparation of annual financial statements of the Group for the year ended June 30, 2006. 3 SHARE CAPITAL Issued, subscribed and paid up capital March 31 June 30, March 31 June 30, 2007 2006 2007 2006 Number Number (Rupees '000) 1,075,232,100 1,075,232,100 Ordinary shares of Rs 10 each issued as 10,752,321 10,752,321 fully paid for consideration other than cash (note 3.1). 3,225,696,300 3,225,696,300 Ordinary shares of Rs 10 each issued as 32,256,963 32,256,963 fully paid bonus shares. 4,300,928,400 4,300,928,400 43,009,284 43,009,284 3.1 In consideration for all the properties, rights, assets, obligations and liabilities of OGDC vested in the Parent Company, 1,075,232,100 fully paid ordinary shares of Rs 10 each were issued to GoP on October 23, 1997. Currently, the GoP holds 85.02% paid up capital of the Parent Company. Authorized share capital 5,000,000,000 (June 30, 2006: 5,000,000,000) ordinary shares of Rs 10 each. 4 CAPITAL RESERVE March 31 June 30, 2007 2006 (Rupees '000) Bonus shares reserve (4.1) 836,000 836,000 Contingency reserve (4.2) 2,385,682 2,219,027 3,221,682 3,055,027 4.1 This represents bonus shares issued by the Subsidiary Company. 4.2 The Group has set aside a specific capital reserve by the name of contingency reserve for self insurance of rigs, wells, plants, pipelines, workmen compensation and vehicle repair. Refer note 10.2 for investments against contingency reserve. The reserve is not available for distribution. 5 TRADE AND OTHER PAYABLES Creditors 191,781 172,665 Accrued liabilities 2,333,793 2,344,755 Royalty 2,606,839 1,288,914 Excise duty 114,023 97,996 General sales tax 1,324,668 1,329,134 Payable to joint venture partners 853,293 1,071,201 Retention money 295,292 305,035 Un-paid dividend 7,526,940 237 Un-claimed dividend 63,472 538,344 Workers' Profit Participation Fund 2,533,629 - Advances from customers 68,823 56,563 Other payables 41,864 64,801 17,954,417 7,269,645 6 CONTINGENCIES AND COMMITMENTS 6.1 Claims against the Parent Company as on March 31, 2007 not acknowledged as debts amounted to Rs 462.410 million (June 30, 2006: Rs 494.876 million). 6.2 Commitments outstanding against the Parent Company as on March 31, 2007 amounted to Rs 12,196.797 million (June 30, 2006: Rs 7,027.459 million). These include amounts aggregating Rs 2,550.918 million (June 30, 2006: Rs 2,527.456 million) representing Parent Company's share in the minimum work commitments related to operated/non-operated concessions. 6.3 Letters of credit issued by various banks outstanding against the Parent Company at end of the period amounted to Rs 3,697.474 million (June 30, 2006: Rs 6,589.035 million). 6.4 Certain banks have issued guarantees aggregating Rs 104.844 million (June 30, 2006: Rs 106.823 million) on behalf of the Parent Company in the ordinary course of business. 6.5 Status of contingencies relating to pending tax assessments/re-assessments is the same as disclosed in the audited financial statements for the year ended June 30, 2006. 7 PROPERTY, PLANT AND EQUIPMENT Nine months ended March 31, 2007 2006 Note (Rupees '000) Opening book value 19,005,374 19,215,608 Additions during the period 7.1 2,455,961 2,261,085 Book value of disposals 7.2 (2,158) (876) Depreciation charge for the period (2,525,255) (2,529,509) Closing book value 18,933,922 18,946,308 Capital works in progress 1,564,203 984,801 20,498,125 19,931,109 7.1 Additions during the period Freehold land 6,644 6,252 Leasehold land - 10,672 Buildings, offices and roads on freehold land 19,742 65,262 Buildings, offices and roads on leasehold land - 34,539 Plant and machinery 1,325,947 1,566,990 Rigs 123,319 93,591 Pipelines 330,035 88,360 Vehicles 381,190 292,961 Office and domestic equipment 28,920 61,119 Office and technical data computers 75,978 40,334 Furniture and fixture 5,709 1,005 Decommissioning cost 158,477 - 2,455,961 2,261,085 7.2 Details of fixed assets disposed off during the period Plant and machinery 267 463 Rigs 26 72 Office and domestic equipment 149 38 Office and technical data computers 124 - Vehicles 1,592 303 2,158 876 8 DEVELOPMENT AND PRODUCTION ASSETS Opening book value 21,427,653 22,316,732 Additions during the period 4,409,125 1,824,208 Amortization charge for the period (2,833,298) (2,401,776) Closing book value 23,003,480 21,739,164 Wells in progress 2,803,479 3,799,860 25,806,959 25,539,024 9 EXPLORATION AND EVALUATION ASSETS-INTANGIBLE Balance at beginning of the period 2,551,149 1,225,968 Addition in exploration and evaluation assets 5,561,712 2,412,769 8,112,861 3,638,737 Cost of dry and abandoned wells (2,613,215) (1,197,482) Cost of wells transferred to development and production assets (1,944,883) (568,410) (4,558,098) (1,765,892) 3,554,763 1,872,845 10 LONG TERM INVESTMENTS March 31 June 30, 2007 2006 (Rupees '000) Investment in related party 10.1 145,377 135,023 Investments held to maturity 10.2 2,359,160 2,238,307 2,504,537 2,373,330 10.1 Investment in related party Associated company - quoted Mari Gas Company Limited, Pakistan 135,023 123,155 Percentage holding 20% 7,350,000 fully paid ordinary shares of Rs 10 each Market value Rs 922.425 million (June 30, 2006: Rs 929.775 million) Share of profit for the period 33,874 34,638 Dividend received (23,520) (22,770) 10,354 11,868 145,377 135,023 10.2 Investments held to maturity Defence Saving Certificates (DSCs) 10.2.1 544,160 673,307 Term Deposit Receipts (TDRs) 10.2.2 1,815,000 1,565,000 2,359,160 2,238,307 10.2.1 Face value of investments in DSCs is Rs 117.184 million (June 30, 2006: Rs 158.249 million). These carry effective interest rates ranging between 16% to 18% (June 30, 2006: 16% to 18%) per annum and are due to mature in periods ranging between 2007 to 2009. 10.2.2 Face value of investments in TDRs is Rs 1,815 million (June 30, 2006: Rs 1,565 million). These carry effective interest rates of 11.1% to 11.4% (June 30, 2006: 11% to 11.1%) and are due to mature in 2007. Investments amounting to Rs 2,216.075 million (June 30, 2006: Rs 1,908.496 million) are due to mature within next 12 months, however these have not been classified as current assets based on the management's intention to reinvest them in the like investments upto the extent of capital reserve. These investments are identified against capital reserve (note 4). 11 TRADE DEBTS Trade debts - un-secured, considered good 33,958,754 24,500,791 Trade debts - un-secured, considered doubtful 177,737 177,737 34,136,491 24,678,528 Provision for doubtful amount (177,737) (177,737) 33,958,754 24,500,791 11.1 Uch Power Limited (UPL) has withheld Rs 4.339 billion (June 30, 2006: Rs 4.265 billion) against claims for damages related to minimum supply of gas. 11.2 These include receivables of Rs 6.147 billion (June 30, 2006: Rs 1.7 billion) which have been withheld by the refineries under the directive of Ministry of Petroleum and Natural Resources. These represent revenue on crude oil in excess of USD 50 per barrel for which discount table is yet to be finalized. 11.3 These include receivables of Rs 4.136 billion (June 30, 2006: Rs 2.580 billion) withheld by the refineries under the directive of Directorate General Petroleum Concessions pending finalization of Crude Oil Sale Agreements. The Director General (Oil) vide letter No. PL-NPA(4)/06 (Cr & Cond. Pr) dated 20th December 2006 has advised the refineries to release 50% of the withheld amount and deposit the balance 50% in 90 days interest bearing accounts which shall be released along with interest to the Parent Company upon finalization of Crude Oil Sale Agreements (COSAs). 12 NET SALES Quarter ended March 31, Nine months ended March 31, 2007 2006 2007 2006 (Rupees '000) Gross sales Crude oil 12,261,149 11,542,396 37,821,522 32,761,027 Gas 15,181,451 18,563,552 43,319,597 44,352,844 Kerosene oil 125,538 122,676 402,437 407,484 High speed diesel oil 90,225 91,806 338,800 300,692 Solvent oil 4,486 36,825 38,758 220,608 Naphtha 739,830 742,458 2,289,775 2,050,087 Liquefied petroleum gas 1,380,642 687,304 3,272,710 1,929,183 Sulphur 32,654 60,268 59,783 147,308 Other operating revenue 11,983 - 41,834 2,393 29,827,958 31,847,285 87,585,216 82,171,626 Government levies Excise duty (381,765) (386,362) (1,082,928) (1,168,514) Development surcharge (10,921) (10,592) (38,724) (41,994) General sales tax (3,799,317) (4,079,090) (11,151,225) (10,474,556) (4,192,003) (4,476,044) (12,272,877) (11,685,064) Net sales 25,635,955 27,371,241 75,312,339 70,486,562 13 OPERATING EXPENSES Salaries, wages and benefits 606,821 687,911 1,879,341 1,736,509 Travelling and transportation 83,251 82,002 233,318 223,371 Repairs and maintenance 115,774 207,309 522,229 396,068 Stores and supplies consumed 199,536 302,771 631,229 553,524 Rent, fee and taxes 59,997 36,055 198,488 117,535 Insurance 60,176 63,307 176,191 174,873 Communication 7,940 7,248 22,361 24,976 Utilities 5,958 2,952 17,159 13,223 Land and crop compensation 36,696 30,319 78,303 104,182 Contract services 42,492 118,597 457,744 359,689 Joint venture expenses 329,163 370,535 1,456,302 1,165,235 Desalting, decanting and naphtha storage charges 34,516 58,263 128,177 147,883 Charges related to minimum supply of gas - liquidated damages 700,000 - 700,000 - Welfare of locals at fields 39,554 18,912 103,900 187,895 Write back of provision for benevolent fund - (19,119) - (19,119) Workover charges 105,881 128,799 381,411 347,270 Other expenses 378 1,226 1,237 3,432 Depreciation 880,966 782,648 2,295,926 2,293,247 Amortization of development and production assets 929,229 793,350 2,833,298 2,401,776 Transfer from general and administration expenses 149,744 175,123 471,599 505,603 4,388,072 3,848,208 12,588,213 10,737,172 Stock of crude oil and other products: Balance at beginning of the period 73,166 29,736 65,608 32,404 Balance at end of the period (73,864) (35,398) (73,864) (35,398) 4,387,374 3,842,546 12,579,957 10,734,178 14 EARNINGS PER SHARE - BASIC AND DILUTED Quarter ended March 31, Nine months ended March 31, 2007 2006 2007 2006 Net profit (Rupees) 11,571,323,800 12,945,597,000 34,496,683,800 32,966,307,000 Average number of shares outstanding 4,300,928,400 4,300,928,400 4,300,928,400 4,300,928,400 Earnings per share - basic and diluted (Rupees) 2.69 3.01 8.02 7.66 There is no dilutive effect on the earnings per share of the Group. 15 TRANSACTIONS WITH RELATED PARTIES Related parties comprise associated companies, major shareholders, directors, companies with common directorship, key management staff and staff retirement benefit plans. Transactions with related parties, including other profit oriented state-controlled entities, and balance outstanding at end of the period are disclosed below: Nine months ended March 31, 2007 2006 (Rupees '000) Associated company- Mari Gas Company Limited Dividend income received 23,520 22,770 Related parties by virtue of common directorship and GoP holdings Pakistan Oilfields Limited Crude transmission charges paid 4,301 9,417 Sale of liquefied petroleum gas 235,217 164,262 Receivable as at March 31, 31,657 22,153 Attock Refinery Limited Sale of crude oil 24,141,832 19,436,420 Desalting/decanting charges paid 23,580 35,781 Receivable as at March 31, 8,646,499 6,135,426 National Refinery Limited Sale of crude oil 7,018,818 5,125,873 Sale of naphtha 2,289,775 1,782,685 Naphtha handling and storage charges 97,923 95,663 Receivable as at March 31, 2,487,122 2,555,023 Pakistan Refinery Limited Sale of crude oil 2,669,658 1,483,295 Receivable as at March 31, 1,523,587 735,178 Pak Arab Refinery Company Limited Sale of crude oil 2,839,006 1,476,537 Receivable as at March 31, 1,198,998 601,669 Pakistan State Oil Company Limited Sale of refined petroleum products 481,438 337,412 Sale of liquefied petroleum gas 17,869 5,573 Purchase of petroleum, oil and lubricants 1,156,560 825,976 Receivable as at March 31, 129,327 195,767 Sui Northern Gas Pipelines Limited Sale of natural gas 24,686,406 23,548,315 Purchase of high BTU value gas 1,570,793 877,424 Receivable as at March 31, 5,081,019 8,467,348 Sui Southern Gas Company Limited Sale of natural gas 13,528,003 10,037,499 Pipeline rental charges 30,159 30,735 Receivable as at March 31, 6,236,495 4,116,528 Enar Petrotech Services Limited Consultancy services 25,302 39,109 Sale of crude oil 1,465,400 1,071,580 Receivable as at March 31, 143,084 257,732 Water and Power Development Authority Sale of natural gas 70,379 46,013 Receipts against long term loan 661,600 661,600 Receivable as at March 31, 7,867 9,935 Karachi Electric Supply Company Limited Receipts against long term receivables 140,063 46,688 National Insurance Company Limited Insurance premium paid 340,708 235,399 National Investment Trust Investment made - 200,000 Dividend received 26,334 - National Logistic Cell Crude transportation charges paid 566,278 500,840 Heavy Mechanical Complex Purchase of stores and spares 59,179 19,259 Pak Datacom Limited V-sat charges - 1,529 Other related parties Contribution to staff benefit funds 339,276 330,789 Remuneration including benefits and perquisites of Chief Executive 7,603 2,525 Remuneration including benefits and perquisites of executives 480,213 220,305 Transactions involving related parties arising in the normal course of business are conducted at arm's length at normal commercial rates on the same terms and conditions as third party transactions using valuations modes as admissible, except in rare circumstances for some of the transactions with the wholly owned subsidiary, where, subject to the approval of the Board of Directors, it is in the interest of the Company to do so. Sale of crude oil to related parties is at a price determined in accordance with the agreed pricing formula as approved by GoP under respective agreement. Sale of natural gas to related parties is at price notified by the GoP whereas sale of Liquefied Petroleum Gas and Refined Petroleum Products is made at prices notified by Oil Companies Advisory Committee/Oil and Gas Regulatory Authority. 16 GENERAL 16.1 Figures have been rounded to the nearest thousand of rupees, unless otherwise stated. The comparative figures have been rearranged, wherever necessary, for the purpose of comparison in the financial statements. 16.2 The Board of Directors of the Parent Company approved interim dividend at the rate of Rs 2.00 per share in their meeting held on April 26, 2007. 16.3 These financial statements were authorized for issue by the Board of Directors of the Parent Company in their meeting held on April 26, 2007. Chairman and Chief Executive Director This information is provided by RNS The company news service from the London Stock Exchange