Oil&gas Regs Regulatory News (OGDC)

OIL AND GAS DEVELOPMENT COMPANY LIMITED

DRAFT MINUTES OF 19th ANNUAL GENERAL MEETING, BEING THE THIRTIETH MEETING OF THE MEMBERS OF THE COMPANY

HELD AT MARRIOTT HOTEL, ISLAMABAD

ON WEDNESDAY, OCTOBER 26, 2016 AT 10:00 HOURS

PRESENT

As per list attached.

COMMENCEMENT OF THE MEETING

With the permission of the Chairman Mr. Zahid Muzaffar, the Company Secretary welcomed the members to the 19th Annual General meeting of the Company and invited Hafiz Muhammad Ali for recitation from the Holy Quran.

DOCUMENTS TABLED

19.1 Following documents were tabled:

19.1.1 Minutes

Draft minutes of 18th Annual General Meeting held onOctober 15, 2015.

19.1.2 Draft minutes of 10th Extraordinary General Meeting held on August 23, 2016.

19.1.3 Annual Report

Auditors' and Directors' reports together with the audited accounts of the Company for the year ended June 30, 2016.

19.1.4 Proxies

19.2 QUORUM, NOTICE AND AGENDA OF THE MEETING

The Chairman requested the Company Secretary to confirm the quorum and read out notice and agenda of the meeting. The Secretary informed that the proxies received were in order and quorum was present for the meeting. The Secretary then read out the notice and agenda of the 19th Annual General Meeting, being the Thirtieth meeting of the members of the Company, held on Wednesday, October 26, 2016.

19.3 Chairman's Address

On behalf of the Board of Directors of Oil & Gas Development Company Limited, the Chairman welcomed the members to 19th Annual General Meeting of the Company.

The Chairman while presenting annual performance of the Company to the members expressed his pleasure to state that OGDCL on the back of vigorous exploratory endeavors, focus on completion of ongoing development projects and utilization of latest production techniques, recorded its highest ever crude oil production of 48,767 barrels per day on October 12, 2016. The credit for this record production goes to the Board and Management for developing an effective growth oriented strategy and to employees of the Company for making all out efforts to put this strategy into action.

The Chairman informed the members that fiscal year 2015-16 was marked as a year of both challenges and achievements in the Company's history. Despite the low oil price environment influencing the oil and gas sector across the globe, OGDCL being the national flagship of Pakistan's E&P sector remained steadfast in its resolve to carry on vigorous exploratory endeavors and continue playing a pivotal role in meeting the nation's oil and gas requirements. Pursuit to this ambition led the Company to report yet another industry leading performance in the Country while preserving its coveted status as a market leader in the E&P sector in terms of exploration acreage, seismic data acquisition, oil and gas reserves and production volumes.

On the operational front, the Chairman presented main highlights of the year as under:

§ Fast track seismic data acquisition of 5,336 Line km and 3,459 sq. km representing 68% and 53% of the total 2D and 3D seismic data acquired in the Country respectively;

§ Active drilling campaigns led to spud of 26 new wells including 12 exploratory/appraisal wells and 14 development wells;

§ Intensified exploratory efforts resulted in 6 oil and gas discoveries;

§ Production volumes contributed around 48% and 28% of the Country's total oil and natural gas production respectively;

§ Completion of phase-II of Sinjhoro development project leading to cumulative daily production from Sinjhoro field averaging 2,600 barrels of crude oil, 30 MMcf of gas and 140 Tons of LPG;

Chairman stated that OGDCL against the backdrop of slump in international oil prices, registered Sales Revenue of Rs 162.9 billion and Profit after Tax of Rs 60.0 billion during the year and total cumulative dividend declared for the year ended June 30, 2016 was Rs 5.20 per share;

Relating to contribution to national exchequer, the Chairman informed the members that OGDCL on account of corporate tax, dividend, royalty and government levies contributed a significant sum of Rs 81.6 billion to the national treasury during the year;

The Chairman also highlighted that OGDCL in response to ensuring top level commitment with respect to health, safety and environment achieved ISO 14001 and OHSAS 18001 certifications for its Dakhni and Chanda fields;

Social welfare activities also continued with greater focus on education, health and infrastructure development. OGDCL in collaboration with the Institute of Business Administration Karachi and Sukkur, launched its first National Talent Hunt Program offering free scholarships to the merit based students hailing from the underdeveloped areas. Moreover, the Company introduced National Internship Program under which 300 graduates for 1 year internship were selected from all four provinces of the Country.

Moving on the Chairman informed the members that OGDCL is determined to carry on its vigorous E&P activities thus paving the way for new oil and gas discoveries leading to reserves addition and production enhancement in the coming years.

The Chairman said that he was confident that under the current management, the Company will strive to achieve new milestones and deliver improved operational and financial performance in the future for the benefit of its shareholders. I am certain that together we will build a more competitive OGDCL that can outperform through all industry cycles.

At the end, the Chairman conveyed his sincere appreciation for continued support of all the stakeholders particularly Ministry of Petroleum & Natural Resources, Board of Directors and shareholders of the Company for their firm support and valuable counsel. He also acknowledged the relentless efforts put in by OGDCL employees working at all levels as we collectively strive to stay ahead by continuing to push boundaries in the industry's new realities and drive forward our business performance in a commercially, environmentally and socially responsible manner.

The Chairman then asked the Company Secretary to proceed with the agenda items.

19.4 CONFIRMATION OF MINUTES OF THE 18th ANNUAL GENERAL MEETING HELD ON OCTOBER 15, 2015

The Company Secretary informed that final draft of the minutes of 18th Annual General Meeting of the Company held on October 15, 2015 remained available for inspection at the registered office of the Company and were also provided to the members on request. It was also made available to the members before the commencement of the meeting and was also laid on the table. Company Secretary requested that the minutes be taken as read.

Company Secretary invited comments from the members; the members however did not have any comments on the draft minutes. On the proposal of Mr. Irfan Babar Khan (CDC ID/AC # 06916-7439), seconded by Mr. Naseem Ahmed Khan Sherwani (CDC ID/AC #00364-25930), the members unanimously resolved as follows:

RESOLVED that the minutes of the 18th Annual General Meeting of the members of the Company held on, October 15, 2015 be and are hereby approved and adopted.

Further resolved that the Chairman is authorized to sign the minutes on behalf of the members.

19.5 CONFIRMATION OF MINUTES OF THE 10th EXTRAORDINARY GENERAL MEETING HELD ON AUGUST 23, 2016

The Company Secretary informed that draft of the minutes of 10th Extraordinary General Meeting of members of the Company held on August 23, 2016 remained available for inspection at the registered office of the Company and were also provided to the members on request. It was also made available to the members before the commencement of the meeting and was also laid on the table. Company Secretary requested that the minutes be taken as read.

Company Secretary invited comments from the members; the members however did not have any comments on the draft minutes. On the proposal of Mr. Irfan Babar Khan (CDC ID/AC # 06916-7439), seconded by Syed Nayyar Ali Zaidi (Folio #40221), the members unanimously resolved as follows:

RESOLVED that the minutes of the 10th Extraordinary General Meeting of the members of the Company held on, August 23, 2016 be and are hereby approved and adopted.

Further resolved that the Chairman is authorized to sign the minutes on behalf of the members.

19.6 TO RECEIVE AND CONSIDER THE AUDITED ANNUAL ACCOUNTS OF THE COMPANY FOR THE YEAR 2015-16 TOGETHER WITH AUDITORS' AND DIRECTORS' REPORTS THEREON

The Secretary informed that the annual audited accounts of the Company for the year 2015-16 together with Auditors' and Directors' reports thereon duly recommended by the Board of Directors in its 185th meeting held on August 24, 2016 were circulated to all the members and also laid on the table. It was therefore requested by the Company Secretary that the Auditors' and Directors' reports together with the audited accounts be taken as read.

The members, on the proposal of Syed Irshad Hussain Bokhari  (Folio #42109), seconded by Mr. Muhammad Rasheed Ch. (Folio # 83583), agreed that the Auditors' and Directors' reports together with audited accounts having been circulated to the members be taken as read by the Company Secretary.

The Company Secretary then invited the members to discuss the audited accounts, Auditors' and Directors' review thereon. Mr. Asadullah Sajid, CDS ID/AC #00364-800 while discussing the annual accounts of the Company; raised the point that although decline in oil prices was witnessed internationally, but there was no decrease in gas prices and the Company was expected to sustain its growth rate. The Company was expected to declare dividend at higher rate than the one recommended by Board of Directors. He also quoted that other E&P companies operating in Pakistan were giving much better dividend to the shareholders compared to OGDCL. With regard to performance of the Company, MD/CEO informed that the Company has achieved record crude oil production and has embarked on an aggressive exploratory strategy. Decline in profitability was an industry wide international phenomenon; however OGDCL is among those E&P companies which have consistently sustained the challenges and recorded post tax profit which was a matter of satisfaction. Mr. Asadullah Sajid commented that new appointments in OGDCL at senior management level were not being reported to the shareholders. In response the Company Secretary informed that reporting requirements as prescribed in Listing Regulations and Companies Ordinance were being fulfilled and there was no deviation in this respect. Mr. Asadullah Sajid also inquired whether the professionals at senior management level hired during last two years met the laid down criteria. MD/CEO Mr. Zahid Mir confirmed that the appointments were made in accordance with the prescribed criteria. Mr. Asadullah Sajid also proposed that profiles of senior management officers indicating their qualifications and experience may be given in the annual accounts. He also suggested that HR policies, SOPs and recruitment procedures should also be disclosed. He also inquired about the current status of shares and dividends allocated to employees of the Company under Benazir Stock Option Scheme (BESOS). President Employees Empowerment Trust informed the shareholder that Privatisation Commission of Pakistan had deferred the payments to employees under BESOS as the Government was considering revamping of the scheme and effected parties had already approached the courts of law and the matter was subjudice. Chairman Board Mr. Zahid Muzaffar requested the shareholder to convey his proposals and suggestion in writing to Company Secretary for consideration of the Board of Directors and the management. Mr. Zafar Masood, Director appreciated the points raised by the shareholder and assured him that proposals received from the shareholders are given due consideration and are always welcome in the interest of improving the systems and procedures. Mr. Irfan Babar Khan (CDC ID/AC #06916-7439) congratulated the management for ably steering the Company during challenging time and achieving milestone of record crude oil production and maintaining profitability. Mr. Irfan Babar Khan mentioned that OGDCL is maintaining its status as the largest E&P Company which reflects performance and effective business strategy.

On the proposal of Syed Nayyar Ali Zaidi (Folio #40221), seconded by Mr. Irfan Babar Khan (CDC ID/AC #06916-7439) the annual accounts of the Company were approved.

RESOLVED that the Directors' and Auditors' Reports and Company's accounts for the year ended June 30, 2016 be and are hereby approved and adopted.

19.7 APPOINTMENT OF AUDITORS

The Company Secretary informed that the present auditors i.e. M/s KPMG Taseer Hadi & Co., Chartered Accountants and M/s A.F. Ferguson, Chartered Accountants would stand retired by the close of this Annual General Meeting. Both the auditors being eligible have offered themselves for re-appointment as joint statutory auditors for the year 2016-17.

On the proposal of the Audit Committee, the Board has recommended the re-appointment of the retiring auditors M/s KPMG Taseer Hadi & Co., Chartered Accountants and M/s A.F. Ferguson, Chartered Accountants on the following terms and conditions:-

On the proposal of Mr. Irfan Babar Khan (CDC ID/AC # 06916-7439), seconded by Mr. Naseem Ahmed Khan Sherwani (CDC ID/AC #00364-25930), it was unanimously resolved that M/s KPMG Taseer Hadi & Co., Chartered Accountants and M/s A.F. Ferguson, Chartered Accountants be and are hereby re-appointed as the Statutory Auditors of the Company for the year 2015-16 with following fee per audit firm:

19.8 APPROVAL OF FINAL CASH DIVIDEND

The Company Secretary informed that during the year, the Company had declared and paid three interim cash dividends totaling 32% i.e. Rs 3.20 per Ordinary share of Rs 10/- each. The Directors had further recommended a final cash dividend @ 20% of the par value of shares i.e. Rs 2/- per ordinary share of Rs 10 each for the year ended June 30, 2016.

On the proposal of Irfan Babar Khan (CDC ID/AC # 06916-7439)  seconded by Syed Nayyar Ali Zaidi (Folio #40221), it was unanimously resolved that a final cash dividend of 20% of the par value of the shares i.e. Rs 2/- per ordinary share of Rs 10 each recommended by the Board of Directors (in addition to the three interim dividends already paid during the year) be and is hereby approved for the year ended June 30, 2016 to the members on record as on October 18, 2016.

CLOSURE OF THE MEETING

There being no other business to transact the Chairman thanked the shareholders for sparing their valuable time to attend the AGM. The meeting ended with a vote of thanks to the Chair, the members of the Board and the Management.

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